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Barb E Dahl

Oh My God! We're Fighting For A Property...

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The question isn't really about property purchase per se, rather, what is your answer to the following questions:

1) Will I need a mortgage?, if NO, then go ahead, if YES, oh dear........

How about if you can fix at 4.5% for 5 or 10 years, with repayments similar to what you are currently paying in rent? Where it will still leave you with some ISA savings that in all likelihood, will attract interest greater than 4.5% in a few years time

and following on from 1)

2) How long will I be in paid employment?, if "I work in government for the inland revenue or I am an undertaker", then please proceed with purchase, if anyone else, oh dear.................

What if you feel you will be in full time employment for as long as you want, being in a niche growing industry and being very qualified, skilled and sought after?

and following on from 2)

3) I am funeral directing undertaker with a small mortgage, what will interest rates be in the future?, I believe they are at a permanent low and will remain this way for the next 20-25 then proceed, if not, oh dear............

What if you have something in place that will pay off much of the remainder of your mortgage over the next few years and that your disposable income will increase by roughly the same amount as the monthly mortgage cost, all happening within the time frame of the fixed rate?

Property ownership is an irrelevance, debt ownership is the primary issue................if you buy a house with no debt then you simply have lost opportunity costs. If you have a mortgage then you are in the bookmakers and are feeling lucky.

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I was reading this thread which appears to be descending into typical panto bull vs bear... then it occurred to me... I have seen loads of people "predict" the nature ,strength and length of this crash, not many share exactly the same view. Some back their arguments up with charts hoping that will win the day, others just state their case.

But I was wondering with the wealth of data we have on housing did anyone, and I mean anyone... a year /eighteen months into the last crash predict the scale or nature of it, how low it would go or how long it would take.

We have loads of data this time, and amateur analysis as well as professional analysis is coming out of our ears... but I wonder is anyone going to be right this time... why should it be any different from last time.... maybe some will get lucky, but most I feel will find themselves scabbling to re-adjust their views.

My personal view is that prices wil continue to go down, but I am not nearly as bullish as some, and never have been. I originally though 25%/30% I have adjusted this to 35% at the outside... and the recent bullish news hasn't changed my view.

But isn't historical data one of the most powerful indicators of where we *might* get to and therefore those with the ability to analyse data, trends and HISTORY have a far better chance of getting their prediction right? What it seems you are suggesting is we might as well all stick a finger in the air and guess based on gut instinct (which I am not suggesting is a terrible way of doing it but maybe for most not the most accurate way).

The bull argument has been - and has always been - 'things are different this time' (every buble, every crash) - but in reality - because this is more to do with human nature than anything else and human nature isn't different this time - that is manure from the bulls backside. This is what people fail to understand, its not about technology, houses, tulips or fine art, its about human behaviour which has - for a very long time - had a disinct pattern. Get a grasp of that and we understand where we are heading.

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anyone attempting to buy a house within this time of political and financial instability is v v brave

Im shocked to watch people so easily persuaded by a few vi articles, people need to listen less and think more

This market and government is awash with criminal activity.

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But isn't historical data one of the most powerful indicators of where we *might* get to and therefore those with the ability to analyse data, trends and HISTORY have a far better chance of getting their prediction right? What it seems you are suggesting is we might as well all stick a finger in the air and guess based on gut instinct (which I am not suggesting is a terrible way of doing it but maybe for most not the most accurate way).

The bull argument has been - and has always been - 'things are different this time' (every buble, every crash) - but in reality - because this is more to do with human nature than anything else and human nature isn't different this time - that is manure from the bulls backside. This is what people fail to understand, its not about technology, houses, tulips or fine art, its about human behaviour which has - for a very long time - had a disinct pattern. Get a grasp of that and we understand where we are heading.

To a degree I don't disagree with you in a sense that property was clearly overvalued, the bubble has clearly burst and chances are it will overcorrect.... that I think is a fair set of assumptions to make from the charts.... but look at it this way... based on the data set then available what did most people predict would happen in 1987/1988/1989/1989/1990 etc... most of them may have got it broadly right... ie theres a bubble and it will correct, but did anyone really predict what would happen... how far prices would fall, for how long etc... I don't think so.

We are now at a stage where I think its very difficult for the charts to help you empirically .... the 1990 crash was unlike others because conditions were different, conditions are different this time so the size and scale of the crash could also be different.......... I do think we are in a state where prices will continue to fall but I am far from certain that any of the information we have provides any accurate steers as to how the market might develop... you could even make an argument that for instance we have had the worst of the falls and the market will just tick along with marginal falls and rises perhaps in cash decreasing by about 1%/2% per year for the next seven years with the real work being done by inflation.... the recession will turn into weak growth, rates will remain low, mortgage funding will remain constrained etc etc etc.

Its quite logical really to assume that the shape and nature ofthe crash might well not be shared with the early 90's... for instance.. interest rates are in a different place entirely, the causes of the crashes are different in nature, reductions in london were very severe last time, this time its new build property and the cancer swathe thats taking more of a bath, the interent wasn't around last time it is this time and god knows what effect that has on behaviour but there will be an effect.

I maintain the historic data is useful but only in as far as it will tell you how far the market is undervalued or overvalued based on some measures..... and bear in mind that some of those measures whilst they make for pretty charts may not be relevant... if I worked hard enough at it I am sure I could do a comparisson of house prices vs the price of carrots, but just becasue there are patterns there doesn't mean they are predictive.

House prices will continue to fall but if you are looking at the charts to tell you how far and how fast I think you are putting much too faith in the chartists.

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To that guy that says don't buy a flat, if I cannot afford a house but want to buy and can afford a flat, why shouldn't I buy a flat? I'd be renting one instead if I didn't buy one.

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To that guy that says don't buy a flat, if I cannot afford a house but want to buy and can afford a flat, why shouldn't I buy a flat? I'd be renting one instead if I didn't buy one.

claustrophobia

neighbours on two sides, at least.

Ashtrays for public areas.

slamming doors.

small rooms

big depreciation.

neighbours

parking problems

neighbours

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How about if you can fix at 4.5% for 5 or 10 years, with repayments similar to what you are currently paying in rent? Where it will still leave you with some ISA savings that in all likelihood, will attract interest greater than 4.5% in a few years time

FIXING IS GOOD, THE LONGER THE BETTER, SAVE MONEY TOO, WE ARE ALL GOING TO NEED SAVINGS.

What if you feel you will be in full time employment for as long as you want, being in a niche growing industry and being very qualified, skilled and sought after?

THE DANGER WORD IN YOUR SENTENCE IS "NICHE". QUALIFICATIONS, SKILLS, AND BEING SOUGHT AFTER MAY BE AN ADVANTAGE IN ANY JOB MARKET, BUT HAVING GAINFUL CONTINUOUS, WELL PAID, EMPLOYMENT FOR A PERIOD OF 10 YEARS IN UNLIKELY FOR MOST PEOPLE. I RECKON I WILL ALWAYS BE EMPLOYED, HOWEVER MY QUALIFICATIONS, SKILLS, EXPERIENCE, AND CONTACTS WILL MEAN NOTHING IF MY INDUSTRY IS DEAD.

LONG TERM INDUSTRY BETS: SECURITY, TAXATION, HEALTH, FOOD, WATER, ENERGY, EVERYTHING ELSE IS DISCRETIONARY.

What if you have something in place that will pay off much of the remainder of your mortgage over the next few years and that your disposable income will increase by roughly the same amount as the monthly mortgage cost, all happening within the time frame of the fixed rate?

YOU CERTAINLY WANT TO PAY OFF DEBT SOONER RATHER THAN LATER, IT SHORTENS THE ODDS. YOU ARE IN THE BOOKIES, BUT YOU ARE GOING EACH WAY WITH THE FAVOURITE. BEST YOU CAN DO.

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I'm still convinced anyone buying today will look like a total twit in 2 years time.

I said t w a t !!!!

Edited by MrB

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The current increase in mortgage approvals and sales is probably as a result of the massive drop in house prices we've seen. I doubt we'd see anything of the sort if prices were as high as they were not so long ago.

What do you think will happen when UK unemployment reaches 3million, and interest rates start increasing - they can't stay low forever can they? A lot more people defaulting on their mortgages than now and the market will be flooded with even more properties from desperate sellers.

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claustrophobia

neighbours on two sides, at least.

Ashtrays for public areas.

slamming doors.

small rooms

big depreciation.

neighbours

parking problems

neighbours

If im not buying a flat Im renting one, so I already have these disadvantages. Why shouldnt I buy a flat if I cant afford a house and would otherwise be renting a flat?

And there are nice flats, they do exist, in nice areas with large rooms, usually conversions of something with character.

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If im not buying a flat Im renting one, so I already have these disadvantages. Why shouldnt I buy a flat if I cant afford a house and would otherwise be renting a flat?

And there are nice flats, they do exist, in nice areas with large rooms, usually conversions of something with character.

you are just close to the woof woof treatment.

now, you have a problem move next door. How quick can you get out of A: the rented option and B: the millstone option.

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Are you going to pee on my legs?

Seems a little unfair just because I can't afford a house.

You can have awful neighbours if you have a house as well. In reality I will probably only buy a detatched house away from dreadful human beings, but it will be a bit of a stretch..

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Are you going to pee on my legs?

Seems a little unfair just because I can't afford a house.

You can have awful neighbours if you have a house as well. In reality I will probably only buy a detatched house away from dreadful human beings, but it will be a bit of a stretch..

I was growling a bit when you went on about the nice conversions. Im thinking london suburb terraces here.

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If im not buying a flat Im renting one, so I already have these disadvantages. Why shouldnt I buy a flat if I cant afford a house and would otherwise be renting a flat?

And there are nice flats, they do exist, in nice areas with large rooms, usually conversions of something with character.

Busy day here at Bairstow Eves in Coventry. Organised a bidding process on a flat in the city. 15 buyers involved (well 14 of these were imaginary but that's not the point). Plenty of evidence of green shoots all around really. Can't see this house price crash going on too much longer - what with all the pent up demand. If you live down in the Maidstone area I can get my mate Sibley to sort you out with a nice studio. Best not hang around though mate houses are selling like hot cakes at the moment.

WIBBLE ........ Green shoots ..............WIBBLE ............. Green Shoots .... etc ....

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"We've been bartering with this guy for a week now and today we've just found out he has another 3 offers on the table! Our price is very reasonable now considering the mess of the property, but I feel we will lose it. I really want it but I will also feel a bit peed off if we go higher."

Walk away - don't be held hostage to an overpriced 'want' there will be other places - there always are. Can't understand why he's bartering with you if others are queuing to buy - suspect it's just tactics - revise your offer down substantially - to a point at which you feel comfortable and wait. It seems very early in the HPC cycle to be considering a purchase - unless you get it at a very low price - those that 'pip you to the post' and wade in may be very sorry later on.

Edited by jaydee

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If you live down in the Maidstone area I can get my mate Sibley to sort you out with a nice studio. Best not hang around though mate houses are selling like hot cakes at the moment.

Sibley lives in Loose, just south of Maidstone.

He purchased his house at the peak of the market with a liar loan (by his own admission)

Have a look at house prices in Loose now.....

Same house, three different agents. Reduced by £100k.

Poor the Sibley

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Sibley lives in Loose, just south of Maidstone.

He purchased his house at the peak of the market with a liar loan (by his own admission)

Have a look at house prices in Loose now.....

Same house, three different agents. Reduced by £100k.

Poor the Sibley

The lying little bast*rd! What about all the "Prices not dropping a penny round here" sh*te?

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I'm 100% bear... we decided to purchase a flat
Not 100% then, surely? If you were, you would realise that flat will quickly move into negative equity and suck up all the lucre you have squirreled away for your dream house.

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I believe some of those people with those lovely fixed price mortgages expiring soon may be sellers. Their LTV has been decimated, arrangement costs for refinancing have spiralled and interest rates are on the way up.

They could even be keen sellers.

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The lying little bast*rd! What about all the "Prices not dropping a penny round here" sh*te?

he's right, if his house isnt for sale or valued for a loan, then the value is whatever you want it to be.

Ask any US or UK bank director how they value THEIR assets.

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Oh no, I can wait.

I find it useful to mention the fact that there's clearly a mismatch between ever rising houseprices and ever declining real incomes.

You pile in sonny.

Fill your boots.

This is the Recovereh, remember.

:P You are right of course.

Amazing how many lemmings there are out there.... Depressing actually. :angry:

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It's strange/funny how when bears do get involved in the buying process, the previous bearish logic seems to go out of the window and people become emotionally involved in not "losing" a property and it becomes much more difficult to pull out of a deal. I guess once you've got your hopes up and you/partners can see yourselves living in a new property then it's very difficult to leave your feelings at the door. This is not a criticism of the OP - a friend of mine who has been a bear for a while has got himself involved in a (probably fictitious) bidding war and no amount of logic seems to put him off - it is now a competition and he wants to win it. Weird. I am stating this because I don't want to fall into this emotional trap myself when the time comes, and perhaps as a warning to other bears. It seems to be a common human emotion.

Well I am nowhere near buying yet despite pressure from Mrs ML, who if fortunately quite fussy and so won't have anything but the perfect house which magically we haven't found yet.

Myself, I've bought 3 houses in my life and my wife really hates my reductionist approach to house buying.

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