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A Question On Sterling And Str

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Can you advise me, I am confused with regard the news that Sterling is weakening.

Excuse my ignorance on this matter. :blink: I understand that Sterling is going south, I also understand that if I had moved my STR into an alternative currency or Gold some time ago it may/would be worth more now, and that interest rates are very low so my STR is practically stagnant if not being eaten by inflation.

However, my funds are sat ready to purchase a property when the time is right, as we know property is going south – royal. :rolleyes:

My question is, given that my STR is set aside to buy something that is deflating how does Sterling falling affect me? :(

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well if the end goal is soley to own a house in this country then the depreciation of sterling matters little (provided foreigners dont suddently buy up all our cheap property which is unlikely given the strain they are also under).

more broadly though it will be inflationary since we import more than we export. A fall in the value of a country's currency also depresses the confidence of its population, which has its own negative economic effects.

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well if the end goal is soley to own a house in this country then the depreciation of sterling matters little (provided foreigners dont suddently buy up all our cheap property which is unlikely given the strain they are also under).

more broadly though it will be inflationary since we import more than we export. A fall in the value of a country's currency also depresses the confidence of its population, which has its own negative economic effects.

plus, we are a country that imports 40% of its food, however, I do believe that as a nation, we can get by on 40% less calories.

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plus, we are a country that imports 40% of its food, however, I do believe that as a nation, we can get by on 40% less calories.

I was at a lecture the other day by the guy in charge of getting nation healthier.

He had a chart about how often people in britain walk for more than 20 mins.

30% of the population do it once a year or less. 15% do it less than once a month.

I think we could get buy on 80% less food consumption. Higher food prices can only be a good thing for this country. We could easily double prices and still spend roughly the same by cutting down on waste.

Same with higher petrol prices. At more than 1 pound 10 a litre I could finally see some reduced traffic on the roads but now all the sheeple can afford to drive again.

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Can you advise me, I am confused with regard the news that Sterling is weakening.

Excuse my ignorance on this matter. :blink: I understand that Sterling is going south, I also understand that if I had moved my STR into an alternative currency or Gold some time ago it may/would be worth more now, and that interest rates are very low so my STR is practically stagnant if not being eaten by inflation.

However, my funds are sat ready to purchase a property when the time is right, as we know property is going south – royal. :rolleyes:

My question is, given that my STR is set aside to buy something that is deflating how does Sterling falling affect me? :(

Ok you may have been able to improve your wealth by investing in other currencies but,if your naive about world economies like me then its surely best to keep your str in as high an interest bank account as you can find then buy that house in a year or two and just dont look back.

All this talk of sterling being devalued and moving your money abroad is ok for the wealthy and others who may spend a lot of time abroad.99% of people stay put in the UK,apart from holidays on the costa however, and most of the stuff we will see rise in price are imported goods.Houses are not imported :)

edit nohpc said : I think we could get buy on 80% less food consumption. Higher food prices can only be a good thing for this country. We could easily double prices and still spend roughly the same by cutting down on waste.

So right ! we waste too much,so being forced to cut down is great!.Far too much goes into the bin at the end of the week.I`ve always thought food too cheap.Food entertains us now,just as much as keeping us alive....just look at all the ads on tv extolling how much fun food is... :o

Edited by tiggerthetiger

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Can you advise me, I am confused with regard the news that Sterling is weakening.

Excuse my ignorance on this matter. :blink: I understand that Sterling is going south, I also understand that if I had moved my STR into an alternative currency or Gold some time ago it may/would be worth more now, and that interest rates are very low so my STR is practically stagnant if not being eaten by inflation.

However, my funds are sat ready to purchase a property when the time is right, as we know property is going south – royal. :rolleyes:

My question is, given that my STR is set aside to buy something that is deflating how does Sterling falling affect me? :(

I'm in the same situation, STR fund sitting in sterling because I dont have the balls to change currencies/buy gold/whatever.

On the up side houses are falling and I intend to buy in this country, so as it stands I'm still going to be better off. However by not acting I have missed out on the oppertunity to increase my STR fund significently. But you could also say that I've missed out on the chance to do the same by not betting on the ponies, I've also avoided any significent losses that may very well have occoured also.

So, STR fund in actual £ is growing slightly as I pay more in while house prices are going down = Win.

If my STR fund was in actual £ and I wanted to buy forign assets = loose, but I dont.

Of course timing is everything before house prices start to rise again in £ terms.

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I have 45% of my STR in inflation linked bonds with NS@I. The rest is spread around fixed high interest accounts which are coming to a end next year and the rest is in Tesco which is currentl earning 5.1%.

The way I see it is that you should hedge against inflation in some way with at least half of your fund. Looking at the current situation I will be buying more Index linked bonds once they become available.

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The point that is often overlooked is that inflation is eroding debts.

It is well documented that interest rates WILL!!! increase dramatically at some time in the near future as the UK fights inflation due to the fact that the devaluing of the pound is costing the UK so much more to buy abroad.

If you have a property today with a large mortgage, then its financially positive to keep plodding away, shop around for a cheaper rate and hang on.

If your STR fund is less than 40% of a future purchase taking into account a 50% drop in prices, then it may well be financially positive to catch a bargain today whilst rates are at the cheapest they have been for 200 years.

If you have a large wedge, and not dependent of finance then its worth waiting for the bottom.

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I didn't move my STR fund to other currencies and gold solely because the pound was likely to go down a bit, but more because I don't trust Brown and Darling not to utterly screw up this country and turn us into another Iceland. I am old enough to remember the 1970s and I think New Labour are even more crap at steeringn us through a crisis than old labour were.

I think it is more likely than not that international investors will pull the plug and park their investments elsewhere before very long and then the outflows of money will bankrupt us. Moreover once currency speculators smell parity with the dollar is possible they'll short sterling to death just as they did when they knocked us out of the ERM.

The UK is small enough to be ignored and sidelined. Euro, USD, Yen and China's RMB? are not really. You can't hedge your country risk and not be invested in these countries. But the UK you can really afford to leave out of a portfolio of investments without making your portfolio less balanced.

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My question is, given that my STR is set aside to buy something that is deflating how does Sterling falling affect me? :(

You've answered your own question:

if I had moved my STR into an alternative currency or Gold some time ago it may/would be worth more now,

and if your STR fund is "worth more now" that equates to being able to buy a bigger house than if you'd left yout STR fund in Sterling.

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Can you advise me, I am confused with regard the news that Sterling is weakening.

My question is, given that my STR is set aside to buy something that is deflating how does Sterling falling affect me? :(

yes cos

Sterling is weakening.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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