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Tiger Woods?

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  1. Been there, tried that. Also suggested we'd stay whilst they tried to sell on a periodic AST at reduced rent for the hassle, so they would have cash flow and they could get rid of us with 2 months notice. No go. The two options I have presented are basically our only 2 options. I hate to stereotype, but I do get the feeling my landlords are the "dun well in property, my house is my pension, off to MEW it up in on the Costa types." Now the HPC is on the way, they really don't know what to do...Given that they should have at the bare minimum 40% equity in this property at current "market prices", I cannot see how they can be in financial difficulty without having extracted equity from this house somehow. If they had put 20k down on this house, then there mortgage 7 years ago would have been for 135k. Our rent (850 pcm) should be covering the interest on a mortgage that size - even one that has reset to variable.
  2. Our AST is just coming to an end (late-mid July) so we've been in discussion with our Portugal living landlords through their agents. Well, always assumed they were amateur BTLers, and it sounds as if they are rabbits caught in the headlights of an oncoming HPC. They bought the property for 155k in late 2001 and the current EA prices for similar houses is 260k. Apparently, they need to sell for financial reasons, but are hoping the market will improve ( !) in six months time. (Mewed to the hilt? Having said that, our rent would not cover the current interest on 155k.) Hence they have offered us the option to move out now, or to have a new AST for 6 months. Of course, neither of these options suit us. From talking to the EA who deals with rentals in our area, it sounds like a lot of people who "own" rental properties are caught in the same indecision. There are for sale signs popping up everywhere in Abingdon at present, So, we started looking at new houses to rent (Abingdon, Oxford, Didcot area). So far, every house that has appeared to be suitable has one or more of the following problems: (1) It is also for sale and the owners want tenancies of 6 months or less. (quite a few of these) (2) The owners are thinking about selling the property, so do not want rental agreements of longer than 6 months. (a couple of these) (3) The owners are in the process of pulling down the house next door and removing most of the garden to build a block of 25 flats, and don't want a rental agreement of longer than 6 months and we would have to put up with builders and a demolition team next door (2 of these, yet they still want market rent!!!!!) You get the picture. Given that every house we've looked at appears to have a BTLer in charge, should we take up the offer of extending our AST for 6 months, leaving us in the position of having to move home immediately post Christmas, or do we continue to try to find a reasonable place now? The advantage of the former option, as far as I can see, is that some sellers may start to resign themselves to not being able to sell, and will be looking for decent tenants. Moreover, we might be able to get a better deal, as houses are notoriously difficult to rent out over winter, though I also presume there will be less choice too. The cons are obvious. Any observations concerning vendor behaviour from those of you who lived in the UK during the last crash? How long before the rental market stabilised? What about experiences of finding properties to rent in early January?
  3. I can't exactly see how someone heading towards their 30s with huge negative equity is going to be marriageable.
  4. They are taking the mick at 1.3 million, let alone 1.8...
  5. This isn't what he said. He was talking about those who were buying second and third homes for rent or flipping, not the poor mug in the street who wanted a house.
  6. Because this "it is all priced in perfect market hypothesis" is a load of bunkum. Also, until an event ACTUALLY happens, there is always the chance that it won't, so a percentage of the effect of a bad piece of news is priced in, but not all of its effect.
  7. The ADP data and the unemployment claims from the preceding 2 days suggested lower unemployment...from my observations over the past 6 months, the ADP measure seems to be a very poor predictor of the NFP data.
  8. Sorry to hear it. It's always difficult to call the top of these things, and after houses going up for so long, it must take quite a lot of faith to sell one's house until one gets good evidence that the party is well and truly is over. Unfortunately, by the time it is very clear, no one wants to do the housing conga again. Good luck with selling - hope someone comes along. Sad to see someone who could see the problems ahead (i.e. long term HPC member) getting stung.
  9. You have no interests other than work? I've never understood this. I would have no problem filling the next 50 years productively without going to work.
  10. This type of living can be rather pleasant, if the building is designed and maintained properly (which I have NEVER seen in the UK). I lived in a wonderful block of apartments in Brisbane 15 years ago. Great views, huge rooms (3 bedrooms), HUGE balcony, maintained swimming pool, sauna, tennis court, underground parking for 2 cars plus storage... all for the princely sum of £360 pcm, split between 3 people (i.e. £30 a week each or there abouts). Within walking distance to the university and shops, together with beautiful green views and a bus stop right outside the front of the building. Never heard anything from those above, or to the sides of us as the walls were very thick. I would go back to living there in a shot if I could. Apartments can be great, but they have to be designed properly, not as the slave boxes that they are in the UK. UK apartments are just Big Yellow storage for people.
  11. Not bad...so the P/E on your company is 5. Given that a P/E should be more like 13, I suggest you sell your share to me for £2.60...a 130% profit. If not, I will launch a hostile takeover bid with money borrowed from my mates in the city and I'm sure I can get the other shares for no more than a 200% markup. Of course, I'm not really interested in improving your company, but plan to asset strip it. Better gets some big stumps for your house cause I would leave a very deep hole.
  12. Well, yes, because I am talking to myself in my head whilst typing I suppose. Certainly when I type it is a process more akin to translating spoken language rather than what happens when I read. Anyhow, my point is (and boy are we off topic) that I presume many others make the same grammatical mistakes in unproofread work because they compose on the fly using an internal voice, which is passed directly to the fingers without going through the grammar checker. I can't immediately think of any other reason why I can type "are" instead of "our" ... they are very basic words that I'm pretty sure I understand the distinction between. Using a Java analogy, it seems like my typing uses a sort of a hashtable for looking up sets of key strokes based on a word's sound without having a proper equals method being defined to distinguish between words with the same "hashcode".
  13. But at what price can you, or a future buyer, purchase the other half of the property? Is it the maximum of the current value or 112500, or it it just 50% of the valuation at the time? (Serious question, not trying to bait you.)
  14. Interestingly, although I am well aware of the which of you're and your I should be using at any given point in time and they stand out like sore thumbs at proof reading time, when I am typing quickly I often find myself typing the incorrect one or even a word that sounds similar but isn't the word that I meant (. e.g. typing "are" instead of "our"). I figure it gives some insight into how language is stored and accessed in the brain, but have never sat down and thought long and hard enough about it...or found out what the experts think.
  15. True to an extent, but we are talking about the lack of the ability to calculate the interest payments on a loan under various scenarios or two add 2 fractions together. This sort of basic rational deduction and process is basic to being a functioning human. I used to teach at Oxbridge and the innumeracy of many of the science students terrified me. The one example that I usually roll out is teaching a student who came in the top 2 in biology finals how to add fractions! I, and I hope most of my classmates, had mastered that at the age of about 9. What it is like at the bottom end of the tertiary education spectrum doesn't bear thinking about. It also seems to be quite pervasive. I was speaking to an acquaintance who is an electrician, who occasionally teaches at the guildhall(?). He reckons the new electricians are seriously mathematically illiterate relative to his generation...they lack the ability to think in a straight line. He is teaching a practical subject, but the standards of mathematical education are so low that many of the new apprentices struggle.
  16. This is certainly a valid point...however, other countries do not solely rely upon financial services for their economy...how do they earn a crust? Might this country not be more productive if we didn't go through such huge credit binges and purges, had more of our best and brightest working in engineering, ip creation etc. rather than being parasites on financial transactions? What about all the social and economic costs due to the huge wage disparity between London and the rest of the country, caused in largely by the remuneration given in financial services and their support services? By relying solely on the bankers, we are held to ransom by them...this is a case of the tail wagging the dog. In summary, yes, it would have been difficult to go against the US, but I suspect that in the long run it would be for the better.
  17. You are confusing education with intelligence. If he can't see what is coming he is as thick as porcine poo.
  18. They still have further to drop. Wait for a few to go bust...then wait a little more.
  19. Just don't do it. As the other posters have said here, it is likely that in a couple of years you will be able to buy the whole thing for that price. Read the last few years worth of messages on this site and I'm sure you will be convinced that buying now will be a mistake that you will regret for a long time. There are plenty of anecdotes on here from people who bought flats at the peak of the last market. They were in negative equity for a decade or more. New build flats lose a lot of value (and the workmanship tends to be rubbish...) However, should you still wish to go ahead with this purchase, you should look into the fine, fine detail of the scheme. I can't imagine that if some institution owns 66% of your property that they will be happy with you selling it at a 50% loss, or would the person buying it from you be expected to owe the remaining 66% of the original value? I just cannot see how one of these schemes can be set up so that they will be fair to you.
  20. Yes. I suppose the point is that one should be diversified. The problem is that no matter what you do some government/banking/pension/insurance vulture is going to do its best to prise your hard earned money from your hands and redistribute/waste/squander it after taking their share...through inflation, legislation, taxation, or just plain brute force abuse of "the law". Life was so much happier and simpler in my youth when I didn't realise just how badly the odds are stacked against a private citizen.
  21. This is a question I am struggling with now. My situation is as follows: only child with older parents who have done well out of the boom in land prices in Australia (selling a sugar cane farm as housing land). Family owns 2 houses in Australia. I currently rent in the UK. My capital has been invested in commodities since 2004/5 (when I started lurking on this site. Thank you all!) That which is not tied up in commodities, has been used to short the current market over the past year, and will be similarly tied up for some time I suspect In many ways, I am in a good position. Regardless of what happens, it is unlikely that I will reach retirement age without a house to live in, unless Australia is invaded by Indonesia or some other unforeseen disaster occurs. This lets me sleep at night. A lot of people are not so lucky. My concerns are that over the next 30 years we are heading towards a world in which commodities are going to be much more expensive relative to wages. Whatever one believes about the current oil price situation, the effects of peak oil will become real and not just speculation in that time period, and oil is fundamental to the production of food (through machinery and, most importantly, fertilizers) and the general running of our society. I suspect the standard of living in the western world is going to drop significantly over that period. I suspect that at some stage, relative to the basics of living (food, energy etc.) we will see a 70s style inflation, without the concomitant raise in wages i.e. cash and equity in many companies is not going to keep up with the costs of living. This is why I am negative about anything other than self managed pension funds...and I also suspect that there will be unilaterally imposed changes to self managed pensions from government. Houses will deflate in real terms, probably for an extended period of time as more of wages will be going on the basics of life rather than speculating on the value of land. Given these beliefs, I think owning some agricultural land will be a good safety net for a family, not necessarily in terms of capital appreciation, but in the ability to ameliorate food costs etc. The other thing is that people have to live somewhere, and that the owners of the average property have generally been able to charge tenants a set percentage of the average wage, whether that is measured in dollars or handfuls of rice. The average wage has to be able to feed a family, so the proceeds of owning and renting a couple of houses should be enough to feed a family. This isn't the retirement or world I envisioned when I left school in the 80s, but one has to be pragmatic. I'm not looking at this as a way to make a killing, just to provide basic security for a family. From this perspective, those who bought houses sensibly in 1995 are likely to be a good position from the perspective I have outlined above. This is purely looking at the situation in hindsight. What will happen this time, one can only guess, but we are heading for a less prosperous world (for the average Joe) in my opinion and the real issue will be how to preserve as much of your wealth and standard of living as possible. The next 5 years will be very interesting and what I do will very much depend on how that unfolds and how I see it continuing to unfold. Apologies for not supplying a simple "yes/no" answer, but I don't know myself.
  22. As I said, I wouldn't be buying a house now due to the price. My point was that someone who bought in 1995 would be in a good position in the following sense: (1) I'm sceptical about the performance of pensions over the next 30 years and what unilateral decisions will be made by government because of the pig in the python demographics...that will not be in a pension holder's favour. (2) Rent would be more than covering the mortgage, and would probably do so for the foreseeable future. In fact, they would be 13 years into the process by now. (3) By retirement the person would own, say, 2 extra properties, and my belief is that average rent should reflect a certain proportion of an average wage. (4) The average wage should allow people to feed themselves. (5) Hence, as retired people tend to have fewer expenses, by having an income stream related to wages, say 2/3rds, they would have some security. Regardless of whatever currency crises, bank failures etc., they would own an asset that produces income tied to wages and hence to the cost of living, at least indirectly. I'm not sure one can say the same for pensions. I'm not interested in the capital value of the asset, just its returns in relation to the cost of living and the ability to ensure that one can eventually own the asset by retirement. We cannot ignore the possibility of serious inflation over the next 30 years, ala 1970s, in which case all that money stuffed in a pension will become more or less worthless (as it did to many in the 1970s). Having said that, as a bear I obviously expect you are correct that in real and nominal terms the value of house prices will drop significantly over the next few years...which is why I wouldn't be doing this now...but someone who bought a couple of decent houses in the mid 90s, might be laughing 30 years hence.
  23. Hi Kath, I suspect that contractually, you are stuck until December. However, might I suggest you talk to the landlord and see if he can find someone who wants to rent it now. It is MUCH easier to find a tenant in summer than it is in winter, so it would be win/win for you both. The landlord avoids having a void and you avoid being stuck in a property you cannot afford.
  24. Which is precisely why I only pay enough into my pension to get the full company contribution...the risk reward ratio is worthwhile. However, if anyone thinks this government guarantee is going to still be in place in 30 years, they need their head examined. Yes, I might be able to get higher earner tax relief on my contributions, but what is the point if it is going to be invested unwisely/just plain lost. The demographic, political and economic risks are just too high to lock up money for 30 years (unless in a SIPP, but even that comes with political risks...who knows what restrictions will be placed on access to funds in them in future?) Those who bought a couple of properties as a pension in 1995 did a very, very clever thing. Those who bought in 2005..well, we all know they were naturally selecting themselves.. One thing I believe that can be assured is that average rents will be a certain portion of the average salary (even if that is counted in bags of rice and chickens), and that owning a couple of spare homes will be a better guarantee of being able to eat well in your dotage than pension funds, gold etc.
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