bagsos Posted May 22, 2009 Share Posted May 22, 2009 Well done; sounds like a nice place. If you keep it for 10+ years you may see some of your money back! Quote Link to comment Share on other sites More sharing options...
leveller Posted May 22, 2009 Share Posted May 22, 2009 Dear AllI have just completed on a house today. I managed to tick all my boxes: - 32% off peak price in Aug 2007 - Secured with a >60% Deposit - Mortgage <2.5 x Joint gross income - 10 Year Fixed Repayment mortgage at 4.99% which allows overpayments - House is a large family home which is ideal for us (close to schools, double garage, SW garden, ideal location etc etc) - No intention of moving for many many years. As many of you know we STR'd in Aug 2007 and have been renting ever since. For me all the signs are their for a massive INFLATION in the near future. Cash in Northern Rock deposit felt secure but was earning paltry interest after the end of fixed bond - and was no longer covering rent by a long way. I sincerely believe that an event is coming that will debase global currencies. Tipping point fast approaching. I believe I have hedged my position and history will show my decision to be correct. It's been a fascinating process the last 5 years - however I'm getting off. A pleasure to have learnt so much from some of you. Good Luck to all and whatever decisions you make. DB Good for you about your house and all, but unlucky about having the debt with it. Lets hope you both keep your jobs and stay healthy so you can pay it off. Good luck! Quote Link to comment Share on other sites More sharing options...
MarkyB Posted May 22, 2009 Share Posted May 22, 2009 I would do the same in your position although I'd like a bigger discount and larger LTV VMR. why would you want a larger LTV? Quote Link to comment Share on other sites More sharing options...
VeryMeanReversion Posted May 22, 2009 Share Posted May 22, 2009 why would you want a larger LTV? Because I am an idiot. I meant smaller LTV, hopefully <20%. VMR. Quote Link to comment Share on other sites More sharing options...
getdoon_weebobby Posted May 22, 2009 Share Posted May 22, 2009 (edited) well done daddy bear. enjoy your home im still shying away from doing similar myself. there is much more deflationary depression to be had first before hyper inflation (if it goes hyper) Edited May 22, 2009 by getdoon_weebobby Quote Link to comment Share on other sites More sharing options...
Mal Volio Posted May 22, 2009 Share Posted May 22, 2009 (edited) Hmm...interesting, and good luck. If this will be your home, then who cares how much you paid for it. Just remember - you might not be able to get your wealth back out of the house in the future.And I will leave you with a chart (with kind acknowledgement from Nadeem Walayat) to ponder: These next 10 years will be unlike the last 50, so all the best to you.... Interesting graph Looks to me as if you could buy a house now at the equivalent of, what, 145 ? with a bit of negotiation. Prices (ignoring inflation ) will trundle down to perhaps 130, but that might be over the next 3 years. So you might lose 12% over 3 years. Offset the rent and it starts to get a bit closer I'm not advocating buying yet, but I can kind of see why people might be starting to be tempted if they think that phase 1 (steep crash) is transitioning to phase 2 (slow decline) edit: I'd be inclined to wait a bit myself and see if the rate of fall really is moderating. If it's not, then waiting 6-9 months might be well worth doing. Edited May 22, 2009 by Mal Volio Quote Link to comment Share on other sites More sharing options...
LiveAndLetBuy Posted May 22, 2009 Share Posted May 22, 2009 I agree. There are too many self satisfied smug bastards on this topic. So what! They jumped in and bought a house, 30per cent below peak. Just what they wanted, mortgage free in ten years blah blah blah. Why dont you Daddy Bear just resist the urge to gloat and brag about your acumen and great good luck and enjoy your two and a half times joint income house! To be fair, he's had the guts to put his money where his mouth is, and has then posted about it on here. He thinks we're going to get high inflation (say above 10%) soon (i.e. within the next year or two), in which case buying now on a 10 year fixed rate mortgage at such a low rate is the right play. There have been others on here making similar predictions about impending high inflation, but if that's what they believe then they should be doing exactly what DB has done (assuming they are looking to buy a house at some point). Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted May 22, 2009 Share Posted May 22, 2009 average prices will trundle down to 3 times salary....thats about 90K with the dpeosits. and dont forget to ADD interest to the loan as well as consider the rent. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted May 22, 2009 Share Posted May 22, 2009 To be fair, he's had the guts to put his money where his mouth is, and has then posted about it on here. He thinks we're going to get high inflation (say above 10%) soon (i.e. within the next year or two), in which case buying now on a 10 year fixed rate mortgage at such a low rate is the right play. There have been others on here making similar predictions about impending high inflation, but if that's what they believe then they should be doing exactly what DB has done (assuming they are looking to buy a house at some point). FEAR the driver of todays spring bounce. Quote Link to comment Share on other sites More sharing options...
Vested Disinterest Posted May 22, 2009 Share Posted May 22, 2009 I like his 13 point countdown, except for the fact that the first 8 points have always been red since the first day he posted it. I'm pretty sure sigs are inserted on the fly as the web page is generated. In other words, your latest sig is shown below all your posts, even from 5 years ago. Quote Link to comment Share on other sites More sharing options...
getdoon_weebobby Posted May 22, 2009 Share Posted May 22, 2009 edit: I'd be inclined to wait a bit myself and see if the rate of fall really is moderating. If it's not, then waiting 6-9 months might be well worth doing. march 2010. after a winter of discontent ;-) Quote Link to comment Share on other sites More sharing options...
Peter Hun Posted May 22, 2009 Share Posted May 22, 2009 I've been watching and waiting for HPC regulars to jump ship as a bellwether for the next wave down.The question is: Once cash rich people have parted with their money, who is left to buy houses at today's prices? (FTB's needing 20% deposits? BTL?) Nobody. Thats will be the bottom of the market, the rise will come when the average FTB's have saved the 20% of the 3.5 earnings average house price. Well, a couple of years after. Only an idiot would buy a house at that point. Quote Link to comment Share on other sites More sharing options...
scottbeard Posted May 22, 2009 Share Posted May 22, 2009 Congratulations Daddy Bear. I hope you are wrong about hyperinflation, but I hope you enjoy your house. Quote Link to comment Share on other sites More sharing options...
Darkman Posted May 22, 2009 Share Posted May 22, 2009 There will only be a minority of winners in this game ie those who held their nerve. Buying now is just too silly to contemplate. The slide hasn't even kicked in properly yet. Give it a couple of years. Of course it's gets boring, and doubt sets in. But really.... WAIT. Quote Link to comment Share on other sites More sharing options...
nohpc Posted May 22, 2009 Share Posted May 22, 2009 (edited) I wish you well. Unfortunately inflation may work against you, continuing to drive down the value of your house in real terms. In years to come we may find property back not to 2004 prices but back to 1995 prices in real terms. In this kind of market, it pays to be patient. I guess you waited 5 years and that was enough. Anyway, all the best. Ummm it doesn't really matter what the real value does if the nominal value increases you still have to pay more for it so if a house rises less than inflation you are not losing out especially with a 10 year fix so you've blown your savings on an illiquid, immobile asset which is rapidly falling in value and easily taxable.genius! Obviously never owned a property. A mortgage with overpayment facility gives you a limitless ISA allowance so if you are a higher rate tax payer and your rate is 5% you are basically saving the equivalent on an overpayment as if you were to get 9% on your savings. Property is illiquid but not immobile... most mortgages are portable. With a 60% deposit he will not fall into negative equity and thus can move whenever he likes. buy tangibles. wow. Give the man a PhD in vagueness. Edited May 22, 2009 by nohpc Quote Link to comment Share on other sites More sharing options...
Godley Posted May 22, 2009 Share Posted May 22, 2009 Good luck to Daddy Bear. You can slag him off all you like but to date he has been correct. Sold at peak etc. I to see the world as Daddy Bear does, indeed all our planning at work is based now on high inflation scenarios and as such we are taking the necessary action to protect the company. So, given I come to the same view then if you are in £'s perhaps you need to start thinking about converting it into assets (not gold btw, thats for the delusional). And a house is as good a place as any, its tangible, you need it and being leveraged in a high inflation environment so long as you protect yourself against the resulting increase in interests rates is not a bad position to be in. Holding debt could be good, how perverse? Think 70's Britain. We have had one of our offers accepted very recently and have just begun the process of buying back in. Hopefully we will complete I will then post the details on here and you can make your own mind up as to the deal we have got. There are those on here who hold the STR'ers in almost the same contempt as BTL's. Of course those of us that forecast the market and STR'd did well out of it, by selling the house(s) to the bigger fool and you may well find this distasteful. Although we have benefited financially from the boom in house prices, I still personally find it disgusting that it was ever aloud to happen and get to the level it did. But, ladies and gentlemen their are lessons to be learnt, so learn from the lessons, you can never beat a market so never try to, try and buy near or close to the bottom, but never try and forecast the bottom and buy back in when you feel you have got the price you want not what you think tomorrow's price will be, it never comes (unless you are very lucky). Quote Link to comment Share on other sites More sharing options...
LiveAndLetBuy Posted May 22, 2009 Share Posted May 22, 2009 average prices will trundle down to 3 times salary....thats about 90K with the dpeosits. Or maybe, with high inflation, average salaries will trundle up to a third of todays nominal house prices? If a house currently costs say 150k on average, and the current average wage is say 30k, then with wages increasing at 10% a year, I calculate it'll take just over 5 years for average wages to reach the required 50k. Quote Link to comment Share on other sites More sharing options...
Guest vicmac64 Posted May 22, 2009 Share Posted May 22, 2009 Congrats - the main thing is you have thought it through - that differentiates you to the sheeple that bought into the boom. Way to go - keep on posting on the site. Quote Link to comment Share on other sites More sharing options...
Telometer Posted May 22, 2009 Share Posted May 22, 2009 That graph of Fortune's suggests 40% off peak. OP bought at 32% off peak. Bottoms are very difficult to time. And he has fixed at 5% for the next decade, which is a great hedge. Nobody ever paid less than that (who with, OP?) And his interest on his savings was nearly nil, so renting was costing money. I too should probably have bought under such circumstances. Quote Link to comment Share on other sites More sharing options...
Fishman Posted May 22, 2009 Share Posted May 22, 2009 It's been a fascinating process the last 5 years - however I'm getting off. A pleasure to have learnt so much from some of you.Good Luck to all and whatever decisions you make. DB Notice to all !! Beware of new troll logging on ramping up house prices ! Quote Link to comment Share on other sites More sharing options...
shiningliao Posted May 22, 2009 Share Posted May 22, 2009 Congratulation! It's great to see your assumptions of the future economy and putting your plan into action. For me, I am still waiting.... I believe, the house price crash this time would be a long bottom 'U' shape instead of 'V' shape. House price will stay low for long time after it hit the bottom. Base on this assumption/prediction, low price will stay low for long time to let everyone knows. No need to jump in hurry. Hopefully, fortune favours patience. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted May 22, 2009 Share Posted May 22, 2009 Or maybe, with high inflation, average salaries will trundle up to a third of todays nominal house prices? If a house currently costs say 150k on average, and the current average wage is say 30k, then with wages increasing at 10% a year, I calculate it'll take just over 5 years for average wages to reach the required 50k. makes no difference either way. but wages are not going up at the moment. Quote Link to comment Share on other sites More sharing options...
Mal Volio Posted May 22, 2009 Share Posted May 22, 2009 makes no difference either way. It does to me, buying with cash Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted May 22, 2009 Share Posted May 22, 2009 It does to me, buying with cash sorry, i was refering to the income ratio and the likelyhood of a real price fall. if inflation takes off, your interest rates will climb too, although, of course, not sufficient to beat inflation. however, loans too will become more expensive forcing homes to be even lower in real terms. Quote Link to comment Share on other sites More sharing options...
Mal Volio Posted May 22, 2009 Share Posted May 22, 2009 sorry, i was refering to the income ratio and the likelyhood of a real price fall.if inflation takes off, your interest rates will climb too, although, of course, not sufficient to beat inflation. however, loans too will become more expensive forcing homes to be even lower in real terms. Yes - then it becomes a balancing act twixt erosion of STR fund and fall in house prices. In real terms. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.