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PotNoodle

Are We About To Hit The "fear" Part Of The Bubble

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That line you quoted, I noticed andykn, or whatever is name is, using that yesterday, except he said it as if it was a serious argument to go out and buy. It's pure psychology.

It's a reason that some may go out and buy. There's too many people on here who think that anyone would have to be insane to buy now.

I wouldn't myself but you all need to understand that the index linked (long term) yields quoted by bears on here with capital protected are competitive in today's investment environment.

To say that prices will go down because people won't buy now because prices will go down is a circular argument.

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Can you smell the smugness?

Two words:

Time

Ming

Well done for spotting an investment opportunity in 1992. Would you do the same if you were starting now? If not, please share your guru like wisdom where you would invest. If so, please talk us through the rationale.

It's not guru like wisdom, it's looking at the basics. Should I use someone elses money (The Banks) to invest in something that people want and who will repay the loan? Even if the answer was partly repay the loan, it means that the house that I have bought is subsidised! It's partly paid off by the tenants. Even if it cost me half the price of the house, it's still half price!!!

Ironically, this plan works better when there are plenty of people out there refusing to buy and sticking to rental property. More future tenants. Even better if there are few competing buyers around as you have better choice, greater chance of finding a bargain or negotiating one.

Then to top all that, you've got tax relief on the interest element of the loan, so the tax I was paying for this wonderful long term investment is also reduced and the final icing on the cake is when I agreed to have a single parent woman entitled to council benefits, live in one of my homes, where she stayed for 9-years. No missed payments, index-linked so increased every year and in effect, the governement (Every tax payer) was buying a house for me. Sweet.

When I bought the 3-bed detached house with a garage for £55,000 I thought this was a huge amount of money and initially I was paying £322 per month on my repayment mortgage and I was only being paid £300 a month from the tenants, but I realised that it was a long term plan and within only a year or two, I was able to increase the rent and cover the cost completely.

Modern BTL landlords only seem to care about current yield and capital growth!!! Who cares about any of this if someone is subsidising your investment purchase!!

Even if you do bring these things into the equation, where will house prices be in 25-years time do you think? Well I'm guessing they will be up. Yield, okay you don't want to fork out too much of your own money if you don't have to so buying something that can wipe it's own face is a good plan, but come on, in this market, that's achieveable!

Market Harborough 2.89% fixed for 2-years £165k loan = £397 per month. Tell me you can't find a decent house with a £165k loan that you can't rent out for more than £397 per month. I mean I've got a 1-bed house worth only £90k that's bringing in £450 a month so it's do'able now.

It makes sense to wait for prices to bottom out before you buy though, but it is very hard to buy at the very bottom of the market because when it turns, vendors often want more money before the sale completes. This is due to the fact a sale often takes between 8 & 12 weeks from start to finish. I think you just have to gauge it about right, find the right property and negotiate hard to get the best deal you can. If prices have fallen further during the purchase, ask for a further reduction just before exchanging contracts, you might get lucky and knock a bit more off! Then relax and don't worry about house prices ever again. Buy yourself a chuff chart and each year cross another year off and look forward to your retirement. Oh and BTW, if you find that rental prices rise sharply over the years, ask the bank if you can increase your monthly mortgage repayments and shorten the life of the loan. We did that and knocked off 5-years making it only 20-years to D-day. :rolleyes:

Edited by Steamerpoint

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It's a reason that some may go out and buy. There's too many people on here who think that anyone would have to be insane to buy now.

I wouldn't myself but you all need to understand that the index linked (long term) yields quoted by bears on here with capital protected are competitive in today's investment environment.

To say that prices will go down because people won't buy now because prices will go down is a circular argument.

Sorry but you've gotta go on the ignore list.....at least the other trolls are mildly entertaining but your posts are real dull pal. Multiple posts arguing with everyone???? Let it go man

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Good timing and good work for sticking at it.

But if you had decided to do this in 1988 or 2007 ? You'd be goosed.

Still - enjoy your retirement. Although your thoughts of 'falling slightly' may be in for a shock. Although you don't care about the values so you won't be bothered... ;)

Um...... not really and this is why. The property I bought in early 1992 had been on the market for £71,000 around the peak in 1988/ early 1999. I paid £55k for it, but even now the property is worth £150k, which is more than double what I could have paid for it in 1988/89 so in terms of resale today, I would have been quids in. Again as I never intend to sell it, it matters not. Sure if I had sold it in 92 then sure I would have lost money and anyone that bought in 2007 would be dumb to sell now, but the point is this. It's a long term investment and over the long term you can't lose out especially if you never sell. It depends what you want. Invest for a few years, avoid property and stick to other investment options or invest for a pension or longer term nest egg, buy a BTL property.

Oh and the following cutting may interest a few people looking to go down the pension route. ;)

PropertyPension.jpg

Edited by Steamerpoint

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It is no illusion. The Government and the media will dictate what happens to house prices.

If the Government had been able to, they would have wanted House Prices to

rise and rise and rise and rise, as it was the only way they had of keeping the

"wonder economy" going.

The very fact that House Prices have fallen by 15% (or whichever index you favour)

proves hat your statement was not true during 2007 or 2008 and will not therefore

be true in 2009.

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If the Government had been able to, they would have wanted House Prices to

rise and rise and rise and rise, as it was the only way they had of keeping the

"wonder economy" going.

The very fact that House Prices have fallen by 15% (or whichever index you favour)

proves hat your statement was not true during 2007 or 2008 and will not therefore

be true in 2009.

Trouble is the government now own a big proportion of consumer banking. Add QE to that and house prices may not fall in terms of GBP.

You need to get that lot out quickly.

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Er, numbers is what this particular thread is all about. A "bull trap" refers to a small rise in numbers on a chart after a sharp drop but before an even sharper/larger drop.

Not a rise in sentiment.

And anyway, as you yourself have said, you didn't buy that far from the bottom of the market - did your loss account for the rent you'd have paid or any lodger's rent you may have received?

I'll take that as a 'No, I wasnt buying and selling houses back in the last bubble/bull trap' then?

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And anyway, as you yourself have said, you didn't buy that far from the bottom of the market - did your loss account for the rent you'd have paid or any lodger's rent you may have received?

I'll do you the decency of answering your question:

The costs equation is pretty close: There wouldnt be much in it one way or the other. However, I was lucky that 91 was near the nominal bottom, was I not? Who has a crystal ball and can tell whether bottom has been reached? It could have gone down much further. However, it didnt go up much for another 5 years, so the balance of risk would suggest 'Not buy' rather than 'buy' (you can lose a lot of capital by buying, but wouldnt lose an opportunity by not buying.

Also, the nominal loss on my house then: Well, lets just say it was significantly less than one month of my crappy postdoc wage even back then: I've had bigger restuarant bills since. However, people buying now, if we return to long-term good lending practices/multiples and long term house values, well, anyone buying now is potentially ******ed for life.......

Edited by General Melchett

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Trouble is the government now own a big proportion of consumer banking. Add QE to that and house prices may not fall in terms of GBP.

You need to get that lot out quickly.

My argument still holds.

The Government, despite their holding interest, have not been able to stop HP falling.

Nor have they been able to lower mortgage rates - despite lowering IRs as far as is

humanly possible.

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Sorry but you've gotta go on the ignore list.....at least the other trolls are mildly entertaining but your posts are real dull pal. Multiple posts arguing with everyone???? Let it go man

Hahahaha. Sorry to bore you with such dull facts.

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I'll take that as a 'No, I wasnt buying and selling houses back in the last bubble/bull trap' then?

You can but you'd be doubly wrong.

If you think the last crash and the "blip" within it is a good model for today's housing market (and I'm not saying it is or it isn't) then we are already nearer the bottom than the top.

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I'll do you the decency of answering your question:

The costs equation is pretty close: There wouldnt be much in it one way or the other. However, I was lucky that 91 was near the nominal bottom, was I not? Who has a crystal ball and can tell whether bottom has been reached? It could have gone down much further. However, it didnt go up much for another 5 years, so the balance of risk would suggest 'Not buy' rather than 'buy' (you can lose a lot of capital by buying, but wouldnt lose an opportunity by not buying.

Also, the nominal loss on my house then: Well, lets just say it was significantly less than one month of my crappy postdoc wage even back then: I've had bigger restuarant bills since. However, people buying now, if we return to long-term good lending practices/multiples and long term house values, well, anyone buying now is potentially ******ed for life.......

And I agree completely. I have said on here before "never try and catch a falling knife". ccc recently expressed an argument very well that I have made before, if this is the bottom and you wait you won't lose much, if it isn't the bottom and you buy now, prices could drop much more.

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Again? Why can no-one on the forum follow a thread,

It's Bernanke's fault. How can he support fiscal destabilisation in a Keynsian economical....

Oh, I'm sorry, I thought this was the GM Chapter 11 thread.....

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And I agree completely. I have said on here before "never try and catch a falling knife". ccc recently expressed an argument very well that I have made before, if this is the bottom and you wait you won't lose much, if it isn't the bottom and you buy now, prices could drop much more.

Easy to say, but when do you know the knife has hit the floor?

At some point, one has to have the courage to make an investment.

Making an investment, means letting go of your money.

People who cling on to their money are misers, not investers.

That said, I agree that at the bottom there will be a "sideways" movement, while prices

stay put at the bottom for a while.

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Easy to say, but when do you know the knife has hit the floor?

At some point, one has to have the courage to make an investment.

Making an investment, means letting go of your money.

People who cling on to their money are misers, not investers.

That said, I agree that at the bottom there will be a "sideways" movement, while prices

stay put at the bottom for a while.

A year after it happens ? At that point you buy a place. You maybe pay 5% more than the very cheapest you could possibly have got it for.

Now I know this is all theory - reality may be different. However I have yet to hear a better plan for picking a good time to buy.

Apart from the obvious one - when the place you want is at a reasonable long term price that you can afford. Either plan is good IMO.

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And I agree completely. I have said on here before "never try and catch a falling knife". ccc recently expressed an argument very well that I have made before, if this is the bottom and you wait you won't lose much, if it isn't the bottom and you buy now, prices could drop much more.

Good, then we're agreed. I intend to turn bull about 1 year after the bottom is reached, and I may go through a neither stage after about 6 months.

Big hugz all round.

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It's a Dutch Auction at the moment

People still have ( tucked away inside their heads ) memories of houses being a source of wealth, cash machine stylee

It's these people who will pile in early afraid of missing the boat. The bottom will be arrived at and missing it by a year either side won't make

much difference as the pace of falls and and rises will be tiny.

There are plenty of bulls here still dreaming that this is a bear trap and like wise plenty of tin hatters who delude themselves into thinking

70% off is going to happen.

The country may be skint , nearly down but not out.

Role on 2013 , thats my prediction for a bottom. Theres a lot more doom and gloom to come between now and then

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But no one can point to a similar "bull trap" in previous UK House price crashes. That's why you have to use this made up graph.

People need somewhere to live, they don't need Gold, equites or bonds; markets that the graph you know and love is based on.

I do sometimes wonder why I bother.

Surely 22 post war bull traps, documented in the Nationwide's own data, should be enough for anybody:

http://www.housepricecrash.co.uk/forum/ind...=116499&hl=

Oh, and Hamish et al please note, we have only just reached the peak levels of the last boom. Only half way down, another 30% off to go.

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Not everybody. I stopped doing mortgage stuff ( I was knocked off the panel of one bank) for the very reason that I didn't "value up". My conscience is clear on that. Right to Incite Chartered Surveyors. Good one.

Is that not highly illegal and immoral* on the part of the bank? :unsure:

(*Not that banks have any morals)

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