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Lion

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About Lion

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    HPC Regular
  1. Bring it on! A drop to -1% means I will pay no interest anymore on my already very cheap lifetime repayment tracker. And if it drops below that, the bank will pay some of the capital off for me on top of my repayments (unless they ruled this out somewhere in their small print, but I think they forgot). I promise I will use the unexpected additional money to boost the economy (refurbish the house and buy a new car for instance), so it is a win-win situation for me and the economy. And for the people who complain that savers would be hit - yes they will, and rightly so. The tough truth is, while cash savings might be good for the individual, they are not good for the economy as a whole, so the government and BOE are probably right to penalise cash savings and encourage other savings (and spending). Most savers can move their cash savings into other assets (shares, property, gold etc.) that should all increase if interest rates go negative. The nonsense that savers pay the price for the low interest rates that benefit people with mortgages is not true for most savers - nobody forces them to save and "suffer". I do have some sympathy for people who currently have to buy annuities, which will probebly take another hit if interest rates go negative. But on the other hand most of the people who are about to retire should have benefited from higher property prices and many of their retirement portfolios will have seen a rise over the last few years due to higher share prices. You can't have it both ways.
  2. Some alternative suggestions (and yes, I am almost serious): Join the Eurozone Join Schengen Abandon the nuclear weapons programme Dissolve the monarchy and the UK government Give all powers that can be delegated downwards to regions and councils Make aristrocracy (incl. their titles) illegal, nationalise their estates to be used for building houses on them where appropriate Sell the Falkland islands and similar overseas possessions - they are a relict of a time gone by Scrap public pensions (replace them with defined contribution pensions)
  3. I was waiting for a number of years to sell a piece of unwanted and bent gold jewellery (containing 5.6 g of pure gold). I now call the (near) top of the market, so I sold it yesterday for £170 (for more than £30/g gold). The proceeds will go into my share account (which is invested 60% abroad and 40% in the UK). If I am wrong it was at least not a significant amount ;-)
  4. Lion

    Was I Wrong?

    I know that high house prices are not in my favour, as I earn a good wage and I could have an even better house by now if house prices had not inflated so much. But as things stand, I am better off having purchased a home in 2004 when this site warned me not to do so. I just made the best out of a bad situation. I am not a real winner, I just decided to join the madness when I realised I cannot beat it. And now after a almost decade has passed and I am happy I did that - I would otherwise have waited nine years just to realise things are even worse now in London than back in 2004.
  5. Lion

    Was I Wrong?

    I started to read this site in 2003, and joined in 2004. Yes, this is how long back HPC predicted doom in London (and maybe even longer). Like many I had to make a decision: To buy or not to buy. A decade ago I was a potential FTB with just ~5% deposit in London, and most on this site advised me to hold out a few years until prices collapsed. I did not believe it, bought a flat in 2004, and the rest is history: After selling the flat with huge profit a few years later we moved to a nice London suburb and bought a semi. Since then prices have increased further in our area. Renting was never cheaper for us, even without taking into account house price inflation - the low interest rates (since 2008 we are on a BOE+0.63% lifetime tracker) and high rents made sure of that. We got the cheap HSBC lifetime tracker in early 2008 when the BOE interest rate stood at 5.25% as we did foreseee falling interest rates, and again we were right, although the scale of the fall was a very pleasant surprise: A year later the rate was at 0.5% and has not increased ever since. The money we now save on the interest allows us to pay back more capital, refurbish our house and send our son to a private school. If interest rates stay that low a few more years sufficient of my mortgage will have been paid off so that even much higher interest rates will not be any concern for me. Again, this is what likely will happen. I am writing this as a response to the original poster, not to gloat about how well we did over the last decade. I am not one of the people who benefited easily from the low house prices of previous decades. I made a decision as a relatively recent graduate with little savings to buy when sites like this claimed there would soon be a houseprice collapse in London, based on my own judgement. In 2008, when even the bank advised us to take out a 5 year fixed term mortgage we went for the BOE lifetime tracker - and again our decision, based on our own assessment saved us a lot of money. Maybe it was also luck, but like most who are lucky I want to believe it was not only luck but also good judgement ;-)
  6. unless they are prepared to scrap final salary public pensions (and move to a contributory system like most of the private sector) they can do what they want - debts and deficits will EXPLODE until the system (or should i say the middle class) breaks down as no more tax can be squeezed out of it. printing money will not help as these pensions are linked to inflation.
  7. For £1.5m you get a house where the guest toilet is in your study!
  8. Lion

    My First Post And My Problems!

    We made a compromise and moved to a leavy suburb (in North London, in walking distance to a tube station) when we came to the UK in 2000. Back then, one of us needed the tube to study at Imperial College. We then started to like the areas at the end of the Piccadilly Line, and although we no longer need the tube - our company is even further out, so we go there by car - we stayed here and now raise a family here. We like London, particularly because of the cultural mix (we are immigrants ourselves). Our income was initially even lower than your's when we bought our flat in 2004, but we were confident that we would earn more over time. A few years ago our first child was born, so we sold our flat and bought a house. In the meantime our household income (and even my income on my own) is well in the six digits, and to be honest this is needed if you raise a family in London without being under constant financial pressure. A reasonable family home in a reasonable suburb will be close to half a million - if you cannot afford that (with help from family?) in 5-10 years it is better to stay away from London - unless house prices drop by 50% by then ;-). Also, we were concerned about the state schools in London. I am sure some are great, but many seem to be under a lot of pressure, and quite a few seem to struggle to maintain basic discipline. Anyway, one of our conditions of raising a family in London was private schooling. We would not stay in London if we could not afford private schooling, but this is probably a personal choice and not a necessity. Another advice: Don't pay a lot for the wedding if you can avoid it (or if others offer to help). Our's did not cost us anything as our parents offered to pay, and we used the cash gifts towards our first flat. Our wedding (incl. honeymoon) was cash positive for us. Generally if you live in London take all the financial help you can get from relatives. We sold our flat with a good profit, but even that and our very good income were not sufficient to move up to the next step of the housing ladder in London - we also had to accept a significant cash gift from our parents that paid for additional expenses like stamp duty. It is ridiculous how the government benefits from high house prices - one should not have to pay £15k stamp duty for what essentially is a very average family home. So to sum it up, a good family life in London costs - A LOT - and probably more than you may think. However, if you think your income can increase a lot in the next decade, go for it and it can be fantastic to bring up a family here. If not - forget it, it is not worth the struggle - unless you can get used to a life in a small house/flat in a not so good neighbourhood, expensive childcare and potentially (although not necessarily) not very desirable schools for your kids.
  9. Silvercrest There are winners and losers. It is to simplistic to say QE benefits the bad and punishes the good. In any case, people may have different opinions who is good (and therefore deserving) and who is bad. As a relatively young family we have a large mortgage. The current low interest rates benefit us (we are on a cheap BOE lifetime tracker). What we save, goes mainly into shares (private pensions, ISAs), which are doing well thanks to QE. The interest savings we make on our mortage allow us to put even more into our ISAs and pension funds, and we can also refurbish and extend our house which benefits the economy. Do we deserve it? I think we do (as everyone in the same situation would). Boomers have generally (as a whole) not much to complain about - they had cheap house prices, almost free university and good pension deals, just to name a few. Young people who cannot afford a home have more to complain about, and the government could help them best by relaxing planning permissions (which would also bring the house prices down).
  10. Lion

    Ftse Versus Savings

    The pound has been dropping a lot recently against major other currencies, like the Euro. Many FTSE companies have international exposure, so their value in Sterling should go up if Sterling goes down. But then also the DAX has been going up, so who knows. Maybe it is all the QE finally feeding through. My wife will now buy a small new car with some of the gains she made with her Share ISA recently. Probably a good time to realise at least some of the profits.
  11. Lion

    Price Per Square Foot

    The semi we bought 2011 in a North London suburb was £4240/m2. This does not include a single garage and a boarded loft storage space. It seems to be pretty much the average price in our area, as houses with the same number of bedrooms that were larger were als more expensive, so the price per sm was probably about the same. The cost to build a good extension is about £1800/m2 - so less than half of the going selling price per sm. Now there is a thought... Anyway, it should be a legal requirement to state the price per m2, and there should also be binding rules how the area is determined (a bit in line with the legal requirement to state the APR for loans, for instance).
  12. Lion

    Cameron To Promise Eu In/out Referendum

    My party came only 4th in the last EU elections (in the UK), and yet they sent 2 MEPs from my city alone to the EU parliament, and are now in the third largest fraction of the EU parliament. I know what they stand for and even remember their names. So I think I got a pretty good representation there and cannot complain. Had this been national elections I would not have got any representation, due to the unfair first pass the post system. I agree that the EU has still deficits when it comes to accountability and democracy, but I am sure it will be improved over time.
  13. Lion

    Cameron To Promise Eu In/out Referendum

    Switzerland and Norway are actually very integrated in the EU - did you know that both are even members of the Schengen countries (so there are not even passport checks when you travel from the EU to Switzerland)? They are also both net payers to the EU cohesion fund, in return for various bilateral agreements. Additionally, they have to implement many EU rules without having a say in them. So they are net payers with no real borders who have EU rules imposed on their industry - hardly good examples to use as an argument how good life is outside the EU? It may be good, but only if you participate in all but name. And even that may not be permitted for the UK: It has often been stated that Norway and Switzerland are exceptions, as they are small and no real competitive threat to EU members. Large countries outside the EU get a different treatment. After all, the EU is there for its members so they can compete better against non members - including Britain, if they leave. So not only will Britain have less access to EU advantages, but in adition the advantages EU membership offers to EU members will be used against Britain to win business from Britain (particularly in manufacturing and the financial industry). About the global negotiating table: The fewer negotiation partners there are on the table when the real decisions are made the better it is (after all, this is not a parliament - there might be many UN members, but most of them carry no weight). In my opinion Europe should mainly be represented by one powerful voice, at eye level with the US and China. These three matter currently, then Russia and (in future) India, and - if Britain leaves the EU - then maybe Britain. Britain will not influence much, but the EU just might.
  14. Lion

    Cameron To Promise Eu In/out Referendum

    The fewer negotiation partners there are on the table when the real decisions are made the better it is (after all, this is not a parliament - there might be many UN members, but most of them carry no weight). In my opinion Europe should mainly be represented by one powerful representative who is at eye level with the US and China. These three matter currently, then Russia and (in future) India, and if Britain leaves then maybe Britain. Britain will not influence much, but the EU just might.
  15. Lion

    Cameron To Promise Eu In/out Referendum

    Yes, I realised it, hence the second e-mail about the weather (rain). Anyway, I don't know if such an office even exists. My only current involvement in politics is that I support a political party and participate in the elections of the their various candidates (but otherwise I spend very little time supporting them). And I campaigned in the US for Obama's first election (mainly trying to get first time voters to enrol to vote), as I was transferred to work there as part of my job for a period in 2008, so I am used to involve myself in political discussions in countries where I am not even eligible to vote in. But who is the US president and the question of Britain's EU membership both interest me and to some degree affect me (my family, without going into details), so I am prepared to involve myselve a bit. Snowflux's description of my job comes actually quite close - my background is engineering (as is my company's), although in the meantime (as a member of the board) general management seems to take over more and more of my time. By the way, it is a shame that EU citizens are not permitted to vote in Westminster elections, not even after many years in the UK, but in elections of their home countries. After 12+ yrs here I am far more affected by decisions made in Westminster than made by the Austrian government, so the logic thing to do would be to give EU citizens the vote in the country they live in, without asking them to become citizens of that country. After all, I am allowed to vote for UK candidates in council, London and EU elections, just not in national elections, which does not make sense.
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