Anyone Thinking Of Buying A House Now Read This Theres A Long Way To Go Yet

[grizzly bear]

Peaople that bank on interest ates for long term income are as stupid as people that think house prices only go up. Interest rates of 5% are that, 5% more than 0. Their natural place is 0%.

That doesn't take inflation into account though. The natural place for interest rates in the long term is around 5%. Various reasons but post tax with low inflation that makes you just slightly above being flat (ie getting some benefit for lending the bank the money).

[Johnny Storm]

Real inflation has been 10% for at least 5 years. Getting 6% on savings was really -4% every year.

[Guest AuntJess]

You could always get a job Aunt Jess. Trolley collecting perhaps, something not too strenuous.

Ah! So you are one of the number of miserable, begrudging misfits which haunt this forum, who can spare no concern or pity for others, as it is all taken up with your own wallow.

If I wasn't a 24/7 carer for my husband, I'd be working in a professional capacity, thanks to the string of letters after my name and a lifetime of experience in that field. Earning an eye-watering amount of money, which I thoroughly deserve, as I worked bloody hard to get 'there'.

I leave the trolley collecting to drongos like you.

[Guest AuntJess]

Spot on.

However, the next post got me. Why is it people expect high interest rates? What part of lowering interest rates is it that constitutes a government failure? I too am loosing a few hundred quid a month but im not grumbling. I always thought of it as wrong, to get money for nothing simply because I already have money.

If your retiring then your on your way out, your going to have to live off of your capital one way or the other. Working people earn, none working people dont. When you retire you wither, need a stick to walk about and become hard of hearing and eventually wet yourself.

Peaople that bank on interest ates for long term income are as stupid as people that think house prices only go up. Interest rates of 5% are that, 5% more than 0. Their natural place is 0%.

Personally im hoping interest rates go up to 15%, but thats just because I want money for nothing.

An end which does not just await me, chum. Or have you found the fountain of youth to prevent your ever getting old?

I am no more decrepit than those famous ladies - Julie Walters, Meryl Streep, Joanna Lumley and Helen Mirren, who are my contemporaries.

As to getting a job, read my response to the post above...moron.

PS. You too might get a better job, but your grammar needs attention. My daughter teaches literacy to adults, but I am not convinced you are an adult, judging from the petty snipes you make. Better suited to a schoolyard, I reckon.

Edited January 10, 2009 by AuntJess

[deeplyblue]

You could always get a job Aunt Jess. Trolley collecting perhaps, something not too strenuous.

Aunt Jess has a job - she is a 24/7 carer. That's a job which physically arduous (many carers can't get help. because Health and Safety regs make it illegal to pay anyone to do some of the jobs), too messy for anyone even slightly squeamish and incredibly stressful. It also tends to be very socially isolating, as few people want to see the person being cared for, and get guilty seeing the problems the carer has without being willing (or, sometimes, able) to do anything about it. Hence Aunt Jess getting some of her "social life" online. It's something which, with a laptop and a wireless connection, you can do whilst watching over a sick person. And, at a quick guess, with no monetary support at all.

If Aunt Jess couldn't cope, then the cost to the tax payer - me and, I assume, you - of looking after someone like that would come to thousands of pounds a month. She is doing her bit not only for her loved one, but also for the country.

EDIT: When I started writing this post, Aunt Jess had not made her own two posts answering the points made (I checked before starting). However, I'll leave it as it stands.

db

Edited January 10, 2009 by deeplyblue

[Guest AuntJess]

It how stupid we've become that people thinking saving is the same as not spending money. What's exactly wrong with saving up to buy your bigger purchases instead of splashing out with debt? Could it be that banking parasites can't enslave us with their usurious scams? Dampler is just another **** telling people to spend like a consumerist kamikases so the system he's done so well out of can continue a while longer yet. Another crony-capitalist slimeball who want society to be destroyed to reinflate the bubble. What a ****. He'd have people starving on the streets so he could happily go on stockbroking at the casino.

Also, for those that live on savings, typically retirees, a big cut in their income will have a disasterous effect of consumer spending. Go to your local department store and sees who'd buying all those big LCD tellies with the crispest pictures, who still buys Hondas come rain come shine, books the cruises - it's grey-haired people with old-school gilt-edged pensions, long paid off detached homes bought on hubby's salary in '69 for tuppence h'penny, savings in the bank. These debt-free super consumers are a powerhouse for anyone looking to sell stuff. Forget the royally-screwed iPod generations.

The tory idea to end tax on savings for normal earners is a good one, even if its only to correct the moral wrong of being taxed twice on the same money.

Whilst I agree that the younger gen. have got it rough as regards the high prices of houses in the last ten years, and we bought our house which was 2.5 my husband's salary:bear in mind that when we bought a house:

- Hubby's salary was 2k per year...and HE was well paid!

- the bank refused to take my income into account. Hubby also had to prove that he could pay the mortgage, by showing P60s and suchlike.

- If this system of stingy lending were applicable today, prices of houses could NEVER have ramped the way they have, and you lot would have sweet FA to moan about..well I guess you'd moan about having to go to work, as many of you seem to spend your days on here.

Err, Are you all on benefits or somesuch? Surely someone with a 'proper' job could not spend all this time on a I/Net forum? I did not but then "I" was reared on the work ethic - a day's work for a day's pay My gen did not look for - or get - handouts.

PS We also had NO savings in the bank whilst our family was young. We frequently went into the red and I got a part time job at night, to eke out hubby's wages. Today people are MUCH MUCH more affluent than we ever were.

Edited January 10, 2009 by AuntJess

[Guest AuntJess]

Aunt Jess has a job - she is a 24/7 carer. That's a job which physically arduous (many carers can't get help. because Health and Safety regs make it illegal to pay anyone to do some of the jobs), too messy for anyone even slightly squeamish and incredibly stressful. It also tends to be very socially isolating, as few people want to see the person being cared for, and get guilty seeing the problems the carer has without being willing (or, sometimes, able) to do anything about it. Hence Aunt Jess getting some of her "social life" online. It's something which, with a laptop and a wireless connection, you can do whilst watching over a sick person. And, at a quick guess, with no monetary support at all.

If Aunt Jess couldn't cope, then the cost to the tax payer - me and, I assume, you - of looking after someone like that would come to thousands of pounds a month. She is doing her bit not only for her loved one, but also for the country.

EDIT: When I started writing this post, Aunt Jess had not made her own two posts answering the points made (I checked before starting). However, I'll leave it as it stands.

db

The callow type of youth who makes these posts is all too evident. When they have matured - if ever! - grown up and reared a family, spent nights up with a sick child or partner, they may learn a thing or too about such things as responsibility, and caring. Until then the likes of you and I will have to tolerate all the peevish comments, when someone older than 40 dares to post on here.

Edited January 10, 2009 by AuntJess

[LuckyOne]

The callow type of youth who makes these posts is all too evident. When they have matured - if ever! - grown up and reared a family, spent nights up with a sick child or partner, they may learn a thing or too about such things as responsibility, and caring. Until then the likes of you and I will have to tolerate all the peevish comments, when someone older than 40 dares to post on here.

I am over 40 and happy to ignore the peevish comments that you refer to.

I have to say that I actually find this site to be quite non-ageist in the main. There are a few exceptions and I hope (perhaps naively) that they will slowly be marginalised.

To you earlier post, the "older" ladies that you mentioned are complete babes.

[porca misèria]

Let's face it, a fall in savings rates from 6% to 2% is a lot better for us savers than a change in rate from +10% pa to -18% pa for housing equity holders (and that's for the folk who own their houses outright.)

Not in the face of printing presses.

[Miss Madam]

You could always get a job Aunt Jess. Trolley collecting perhaps, something not too strenuous.

She's a full time carer for gawd's sake give her some credit! But to be fair Aunt Jess, you are not the only one eating into your capital at these times, although I doubt that is any compensation.

[Miss Madam]

The callow type of youth who makes these posts is all too evident. When they have matured - if ever! - grown up and reared a family, spent nights up with a sick child or partner, they may learn a thing or too about such things as responsibility, and caring. Until then the likes of you and I will have to tolerate all the peevish comments, when someone older than 40 dares to post on here.

Come on Jess, that's you being ageist - do you know anyone being critical is under 40, and for that matter do you know that those sticking up for you are over 40. I'm not. And you know that but I do have every sympathy with what you are going through and you have my total admiration. Also it is Sunday today, so I think that even us young workers are allowed a day off to post. TBF most of the time I post (given I'm 8 hours ahead of late to risers, I am actually at home). I lost two grandparents this year, both of whom required extensive caring from the family as to be honest, if they were sent to hospital there was a very real feeling that they would be switched off as a waste of resources.

[eric pebble]

And does cite 2012 [olympic year] as a recovery.....

The Olympics - they last for 2 weeks, is it? It never ceases to amuse me how some people are pinning their hopes on the Olypics to save their pathetic little lives whose "dreams" are entirely based on the "housing market" Ponzi scam.....

Edited January 11, 2009 by eric pebble

[Nickolarge]

Good post...totally agree!

MY personal grump in all this is that, having sold my house to move to a quieter place to retire and downsize - leaving my large detached in the metropolis available for a hard-working family working in that area -and am renting a place whilst looking for one to buy, my interest from the funds for my house has reduced to a quarter of what it was. Meaning that I will have to use capital to cover my rent, so houses will indeed have to drop a good bit further, before I can buy one that is in the same excellently maintained condition I left my other home in.

Boiling in oil is too good for Gorgo. :angry:

Let's see if I have got this right.

You sold your house for far more than it was worth, thanks to the boom.

You want the interest on your fund to pay for your rent but now you find you are actually having to spend a tiny proportion of the capital.

You are renting because, despite prices dropping 20% plus, you are unable to find a suitable house.

And despite the fact that you are in a great position in the market, you want to blame someone called Gorgo?

[Nickolarge]

The callow type of youth who makes these posts is all too evident. When they have matured - if ever! - grown up and reared a family, spent nights up with a sick child or partner, they may learn a thing or too about such things as responsibility, and caring. Until then the likes of you and I will have to tolerate all the peevish comments, when someone older than 40 dares to post on here.

A fair number of posters seem to be at odds with your first post and your reaction, or should I say overreaction, suggests that perhaps it is you that could try to show some of this 'maturity' that you claim to possess.

Also, it never looks good when a poster has to resort to self promotion such as your 'letters after my name' comment. I know, having been sharply criticised for the same.

By the way, I will be 50 in February.

[dude]

Good article - short and to the point.

The mess we're in really makes my blood boil if I think too much about it. Gordon is the worst thing to have happened to this country in a long time.

You've obviously forgotten that tw@t Thatcher to whom we can trace much of our malaise. It's precisely because politicians have been frightened to undo the damage she did that we are in this mess now.

[Nickolarge]

You've obviously forgotten that tw@t Thatcher to whom we can trace much of our malaise. It's precisely because politicians have been frightened to undo the damage she did that we are in this mess now.

Yesterday I was thinking about the number of 'I hate Brown' posts we get on this forum.

I came to the conclusion that the reason why I hated Thatcher but can't do any more than dislike Brown is down to the different intentions behind their actions.

With Brown, incompetence is the problem. He would have loved for there to have been no credit crunch. I am sure that he genuinely wanted no more boom and bust but was too concerned with avoiding bust rather than stopping boom.

Thatcher, on the other hand, engineered at least one recession that need not have happened, or at least need not have been as bad as it was. She did this in order to pursue a political vendetta against the trade unions. When you consider that one of her main slogans in 79 was 'Labour is not working', a reference to one million unemployed, she then intensionally pushed the jobless total up to three million in order to make us all more 'competitive'. Also, later in her term Lawson's actions directly caused the last house price crash.

So there you have it.

Thatcher did it to us twice in 10 years, on purpose.

Brown never planned for this to happen and has tried to stop it getting worse. And whether you like it or not, Brown's mistakes were repeated around the globe by governments of every hue.

Edited January 11, 2009 by Nickolarge

[dave_1]

Yesterday I was thinking about the number of 'I hate Brown' posts we get on this forum.

I came to the conclusion that the reason why I hated Thatcher but can't do any more than dislike Brown is down to the different intentions behind their actions.

With Brown, incompetence is the problem. He would have loved for there to have been no credit crunch. I am sure that he genuinely wanted no more boom and bust but was too concerned with avoiding bust rather than stopping boom.

Thatcher, on the other hand, engineered at least one recession that need not have happened, or at least need not have been as bad as it was. She did this in order to pursue a political vendetta against the trade unions. When you consider that one of her main slogans in 79 was 'Labour is not working', a reference to one million unemployed, she then intensionally pushed the jobless total up to three million in order to make us all more 'competitive'. Also, later in her term Lawson's actions directly caused the last house price crash.

So there you have it.

Thatcher did it to us twice in 10 years, on purpose.

Brown never planned for this to happen and has tried to stop it getting worse. And whether you like it or not, Brown's mistakes were repeated around the globe by governments of every hue.

There you have what? your opinion, thats all.

Gordon Brown is extremely dangerous and reckless, he is no misguided hero.

Thatcher was a much better leader, people that do not create wealth, as they work in a non profit making subsidised industry, should not make ridiculous wage demands, these trade unions cost them their jobs. the greed of the socialist labour morons expecting an easy living, hang on, deja vu ?

[Nickolarge]

There you have what? your opinion, thats all.

Gordon Brown is extremely dangerous and reckless, he is no misguided hero.

Thatcher was a much better leader, people that do not create wealth, as they work in a non profit making subsidised industry, should not make ridiculous wage demands, these trade unions cost them their jobs. the greed of the socialist labour morons expecting an easy living, hang on, deja vu ?

Yes, that's my opinion. Well spotted.

What were these non profit subsidised industries? Name a few.

[tiggerthetiger]

Yes, that's my opinion. Well spotted.

[dude]

Thatcher was a much better leader, people that do not create wealth, as they work in a non profit making subsidised industry, should not make ridiculous wage demands, these trade unions cost them their jobs. the greed of the socialist labour morons expecting an easy living, hang on, deja vu ?

And the greed of capitalist bankers? That's ok then is it? Loadsamoney? They were a good creation of the 80s were they? Thatcher was an appalling leader. She did much to destroy the cross-party consensus that had existed up to the 80s. She closed the mines -- so we now rely on foreign energy imports more than previously. She sold off the utilities, so investment is funded by now by users, meaning they can manipulate it so the poorer sections of society pay more.

Chubby Lawson's '87 budget did much to move the burden of taxation away from the rich and down to the lower half of the income scale.

Thatcher had a 'mission' to remove Socialism from the UK. She even, unbelievably, cancelled democracy by abolishing the MBCs and putting QUANGOs in their place. That is not just a worse leader, that is positively evil, and worthy of a totalitarian leader.

The woman is a disgrace; the only consolation is that every day is one day nearer to that tw@t's death.

[Nickolarge]

And the greed of capitalist bankers? That's ok then is it? Loadsamoney? They were a good creation of the 80s were they? Thatcher was an appalling leader. She did much to destroy the cross-party consensus that had existed up to the 80s. She closed the mines -- so we now rely on foreign energy imports more than previously. She sold off the utilities, so investment is funded by now by users, meaning they can manipulate it so the poorer sections of society pay more.

Chubby Lawson's '87 budget did much to move the burden of taxation away from the rich and down to the lower half of the income scale.

People forget that Thatcher presided over the last house price boom and crash.

Lawson's '88 budget told us all that Dual MIRAS would end in August, causing a mad six month surge in sales and prices followed by the crash. Sounds like incompetence but maybe it was intentional. Either way, it was bad. Unless you had something to gain from a crash. I suppose it made the house I bought in '94 much cheaper but that didn't make me a Lawson fan in the same way that most readers of this forum are not going to vote Brown just because they can buy a house for 20% under peak now.

[deeplyblue]

Let's see if I have got this right.

You sold your house for far more than it was worth, thanks to the boom.

How do you know what the house was "worth"?

Here's an example. We sold a large-ish Victorian 3-storey house in a desirable area of Newcastle (Jesmond, for those who know N/C). What was it worth? Not the £425K which an almost identical neighbour's house went for 6 months earlier, partly because ours needed more work, and partly because, by the time we sold, it was 2008, not 2007. But not, presumably, the £18K (yes, eighteen - including the cost of a new roof and replacement windows) which it cost in 1976. I don't know how much the previous owner paid - but I'd guess it would not have been more than £3K at most (she had had the property for some years).

The conventional wisdom of this forum is that it was worth exactly what we got for it. We hear reports from posters on this forum of people who are, "not prepared to sell a house for less than it is worth," and these people generally get mocked, for believing that a house is "worth" whatever the maximum value that would have been put on it by an estate agent at the top of the market. The idea is that a house is "worth" what someone is prepared to pay for it at the time they are prepared to pay for it.

Now, I'm not entirely happy with that. For example, it seems reasonable to say that many houses at auction go for less than they would have fetched has they been marketed in the usual manner, over a longer timescale. Similarly people may pay more than a house is "worth" if a serious defect has been hidden - either deliberately or through ignorance. And I would have to add in that if someone was prepared to pay £10K more than anyone else would, because they really wanted to live in a house with the number "42", then I would be inclined to call that paying "more than it is worth." But if you add in the notion that both buyer and seller are informed, honest, rational and not under duress, then I'd go along with the definition that a house is worth what someone would pay for it.

If you do not accept that the worth of a house is the what it would fetch on the open market at the time of marketing, then how would you establish it?

db

[AteMoose]

What were these non profit subsidised industries? Name a few.

Coal Mines were heavily subsidized and thatcher wanted to privatise them. I wasnt polically aware at the time but I understand that thatcher pretty much stopped all subsidies and privatised anything that was costing money. The idea was to drop the stuff that was costing money and focus on things that made money. And it worked, out of the darkness lots of successful business thrived, Gordon on the other hand has done a great job and shutting down successful business/manufacturers/ofshoring them through excessive taxation and making everhything excessivly complex.

Edited January 12, 2009 by moosetea

[shippers]

How do you know what the house was "worth"?

Here's an example. We sold a large-ish Victorian 3-storey house in a desirable area of Newcastle (Jesmond, for those who know N/C). What was it worth? Not the £425K which an almost identical neighbour's house went for 6 months earlier, partly because ours needed more work, and partly because, by the time we sold, it was 2008, not 2007. But not, presumably, the £18K (yes, eighteen - including the cost of a new roof and replacement windows) which it cost in 1976. I don't know how much the previous owner paid - but I'd guess it would not have been more than £3K at most (she had had the property for some years).

The conventional wisdom of this forum is that it was worth exactly what we got for it. We hear reports from posters on this forum of people who are, "not prepared to sell a house for less than it is worth," and these people generally get mocked, for believing that a house is "worth" whatever the maximum value that would have been put on it by an estate agent at the top of the market. The idea is that a house is "worth" what someone is prepared to pay for it at the time they are prepared to pay for it.

Now, I'm not entirely happy with that. For example, it seems reasonable to say that many houses at auction go for less than they would have fetched has they been marketed in the usual manner, over a longer timescale. Similarly people may pay more than a house is "worth" if a serious defect has been hidden - either deliberately or through ignorance. And I would have to add in that if someone was prepared to pay £10K more than anyone else would, because they really wanted to live in a house with the number "42", then I would be inclined to call that paying "more than it is worth." But if you add in the notion that both buyer and seller are informed, honest, rational and not under duress, then I'd go along with the definition that a house is worth what someone would pay for it.

If you do not accept that the worth of a house is the what it would fetch on the open market at the time of marketing, then how would you establish it?

db

Some independent metrics would be

Materials cost and labour cost to rebuild, some figure based on demographic profile of neighbourhood, and distance and quality of "life" facilities such as doctors, schools, as well as access to employment/culture etc.

I'm sure someone if they where so inclined could measure each house to find out an independent valuation. In fact I'd be surprised if banks and other lenders already didn't do so.

Of course there is the traditional salary multiple, i.e. equity + (3 to 4 ) * income.

This then takes into account increasing house purchase price as you get older, given that you buy a FTB at early 20ish.

I reckon you'd get pretty near an fair price using a combination of the above non-sentimental parameters

[Saberu]

Good post...totally agree!

MY personal grump in all this is that, having sold my house to move to a quieter place to retire and downsize - leaving my large detached in the metropolis available for a hard-working family working in that area -and am renting a place whilst looking for one to buy, my interest from the funds for my house has reduced to a quarter of what it was. Meaning that I will have to use capital to cover my rent, so houses will indeed have to drop a good bit further, before I can buy one that is in the same excellently maintained condition I left my other home in.

Boiling in oil is too good for Gorgo. :angry:

You should have bought gold you noob.