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House Price Crash Forum


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Everything posted by Lion

  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. 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. 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. 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. 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. 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. 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. 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. 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. 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.
  16. Not true. I have been at markets where they mainly use kilos. In a small Essex town. The transformation is happening... And once peoplse see, how easy it is, they will not want to go back. It is really a generational thing, anyway.
  17. Well, this will not happen. The EU will tranform and change, according to the needs of the members and its people. There will of course always be those who don't like it, and yes, some countries might even leave. The same might however happen to the UK outside the EU - it may also lose members - just look at Northern Ireland or Scotland. Other countries will join the EU - like Croatia in a few months, and further countries in future - maybe even Scotland. The EU does not need England to grow. I am sure the bankers in Europe are already gleefully looking forward to all the additional financial business that will transfer from London to the continent after the UK leaves. And then what? Only then will the City discover that the financial "industry" is not really an industry at all. And no, there will be no anarchy. This is (almost wishful) thinking and comes from the same people who predicted a crash of the Euro last year and the year before (they are a bit quieter this year, after they were wrong twice). It did not happen. In the contrary the pound has depreciated quite a bit against the Euro recently - it is close to its lowest level ever against the Euro. I wonder when it will drop below parity... Should the pound not appreciate if the EU and Euro are doomed?
  18. this clearly shows how messed up the system is, if the measures with the same names - likes gallons and cups - have different meanings in the UK and the US. And why are nautical miles longer than normal miles? no further evidence needed that this is truly an antiquated measurement system that is not fit for purpose in today's connected world. this has nothing to do with the eu, but it makes sense that the eu asks countries to adopt the metric system as it will make trade etc. much easier if the same units of measurement are used. i would happily accept that the eu adopts the imperial system if it can be proven it is superior to the metric system. good luck with that.
  19. you can say that about everything. times are changing. global issues require global answers and more co-operation. in the old times, relatively self-sufficient countries could happily live relatively isolated. well not that happily actually, otherwise they would not have major wars in europe every few decades, which the eu has helped to stop. nato also played a role, but the eu was and still is a major reason - or are you aware of any armed conflict between any member states since the creation of the eu? what is the point of fighting over land if there are no real borders between states? what is the point of invading another country, if people, goods and capital can move freely across borders anyway? anyway, countries are no longer self-sufficient, and the never again will be. the eu is a result of that change, it is not the cause. britain needs the eu more than the eu needs britain.
  20. O dear. But there is a context: Immigration is like rain. Many people do not like it, but it benefits the country nevertheless. However, if there is too much of it, it can cause damage. In any case, there is not much one can do about it, apart from staying indoors so you do not need to see it.
  21. The common person does not care about metrification - which by the way makes perfect sense: Why are people happy to buy petrol in litres but not also milk and beer? What's the point of using inches, feet, yards and miles if metres and kilometres are far easier and better to work with? The current generation of pupils already grows up with metres (according to the homework my son gets), it is only a question of time before the public will confidently use the metric system. It will be no more difficult than the move to the decimal currency system, a similar improvement. Fisheries policies? Come on. The common person could not care less about fishery policies. Non of the above will matter, in the end it will be about immigration. UKIP will see to it that this will be the main topic. All the rest will be a distraction. Or do you think Cameron will win his referendum if he says: I could not stop EU immigration, but I managed to protect our fishing grounds and we can keep the imperial system (a likely outcome of the negotiations, by the way - I doubt the EU will give concessions on major issues like immigration).
  22. For the common person immigration is the central complaint they have about the EU, and all the benefits the EU scroungers can claim from day one (just to use a Sun headline). Fact. You must be blind if you cannot see that. But Europe will become MUCH more diverse, weather people like it or not, and weather the EU even exists or not. I did not say that there would be black countries in the EU. The EU is not responsible for that change, it may only speed up that process. The only sad thing is that people will think in a referendum they can somehow reverse that inevitable trend with a No vote. They can't.
  23. The financial system is the problem, not the states. Almost all states - not only the western states - participate in it and will be affected by a collapse of that system. Or what do you think will happen to the BRIC? Who knows what would really happen if that system collapses... the EU could just as well raise from the ashes and be even stronmger than before. This is just as likely as the (re-)creation of small states with their own little (new) currencies.
  24. Even if chocolate bars will become more expensive as a consequence of leaving the EU?
  25. Just for the record, I do not consider myself "left". I am for a smaller state, for instance, and I think I pay too much tax. I think also that everything should be managed at the lowest level that is possible, which is actually almost part of the Tory manifest. But a lot of the issues Europe has to deal with can only be dealt with on an international level, hence the EU needs to become stronger and more integrated. Environmental laws, international crime, fighting cartels, competition laws, patents, human rights etc. - all can be dealt with far better on a European level. At the same time, local and regional governments can deal with a lot of the things national governments currently do - particularly all the services that affect people directly (health, infrastructure, education etc.). Essentially I predict EU and local governments (not councils, probably larger regions like London) will both become more important, largely at the expense of national governments. Which seems to make sense. To resist the flow of time is not possible, this is what history teaches us. Britain was quite different in 1900 compared to today, and different again in 1800 and so on all the way back to the Romans. The same applies when you look into the future, just the speed has increased due to new technologies (internet!) and globalisation. In the past one generation would not see the amount of change we see today - not only because change happens quicker but also because people get much older, so they witness longer periods of time. 2100 will be different not because of the EU, but because the world has always changed a lot in every single century, particulary since the industrial revolution and even more so since the internet. And believe me, I prefer to live today compared to 1900, and I predict my future greatgrandchild(ren) who will live in 2100 will prefer to live then and not today.
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