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TheCountOfNowhere

Are Fools (and Their Money) Prolonging The Crash ?

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We see from the facts that asking prices are rising.

We hear from anecdotal evidence that some "fools" are paying close to asking price.

The land registry is dropping.

The haliwide indexes showing up huge anamolys ( which I believe will now drop for the rest of the year ).

I think that means ( using some simple arithmetic ) that for every fool paying too much, many people are getting a bargain.

So, I think the fools, i.e. the idiots being conned into paying near asking prices by high pressure unscrupulous salesmen/a*rses ( probably mostly in london and their-abouts ), are keeping the stats up and the reality from hitting.

Isnt it time we stopped stupid people from self harming ?

Is there some sort of jacket device or a electrified collar we can fit them with ?

Edited by TheCountOfNowhere

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Everyone who thinks this is a repeat of the early nineties is buying now. The rest will stay away.

If that was the case why not wait 5 years till it really bottoms and fear sets in ?

I'd just started working when the last crash happened and I lived through "maggies millions"...that was nothing compared to this. That was a re-aligned of power and realisation that the industrial revolution and the English empire was over. It was evident the UK was going to have to compete in a world market....this is a realisation that we are no longer a world power, we failed competing against other nations (with cheaper better educated harder working workforce ) and a re-alignment into an ( relatively ) impoverished nation .

Edited by TheCountOfNowhere

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If that was the case why not wait 5 years till it really bottoms and fear sets in ?

I'd just started working when the last crash happened and I lived through "maggies millions"...that was nothing compared to this. That was a re-aligned of power and realisation that the industrial revolution and the English empire was over. It was evident the UK was going to have to compete in a world market....this is a realisation that we are no longer a world power, we failed competing against other nationws (with cheaper better educated nations) and a re-alignment into an ( relatively ) impoverished nation .

+1

A repeat of the 90's would mean another three years of declines minimum.

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Everyone who thinks this is a repeat of the early nineties is buying now. The rest will stay away.

Don't understand your point. If they think its a repeat of the early nineties then they should remember what happened to house prices between 1991 - 1996. They wouldn't buy. What is your logic?

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We see from the facts that asking prices are rising.

We hear from anecdotal evidence that some "fools" are paying close to asking price.

The land registry is dropping.

The haliwide indexes showing up huge anamolys ( which I believe will now drop for the rest of the year ).

I think that means ( using some simple arithmetic ) that for every fool paying too much, many people are getting a bargain.

So, I think the fools, i.e. the idiots being conned into paying near asking prices by high pressure unscrupulous salesmen/a*rses ( probably mostly in london and their-abouts ), are keeping the stats up and the reality from hitting.

Isnt it time we stopped stupid people from self harming ?

Is there some sort of jacket device or a electrified collar we can fit them with ?

Pure arrogance

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We see from the facts that asking prices are rising.

We hear from anecdotal evidence that some "fools" are paying close to asking price.

The land registry is dropping.

The haliwide indexes showing up huge anamolys ( which I believe will now drop for the rest of the year ).

I think that means ( using some simple arithmetic ) that for every fool paying too much, many people are getting a bargain.

So, I think the fools, i.e. the idiots being conned into paying near asking prices by high pressure unscrupulous salesmen/a*rses ( probably mostly in london and their-abouts ), are keeping the stats up and the reality from hitting.

Isnt it time we stopped stupid people from self harming ?

Is there some sort of jacket device or a electrified collar we can fit them with ?

Relax and keep your panies on.

We all knew this would happen. It's a bull trap and we were fully aware it would come and what happens afterwards.

Suckers with money in bank think they are getting a bargain.

All this does is drain the last of the "honest" money out of the system so that in 5 years time when prices really bottom out the sharks can move in and hoover up all the houses for a song, with no-one to bid against.

Everyone go back to what you were doing... mostly waiting for the actual crash to start.

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Regarding the Spring 09 mini boom in house sales I`m yet to see many of this properties in LR or Houseprices statistics. I just wander if they actually sold? Or was it just one big hype!

It won't have hit those yet. Over the next 3 months i guess.

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We see from the facts that asking prices are rising.

We hear from anecdotal evidence that some "fools" are paying close to asking price.

So, I think the fools, i.e. the idiots being conned into paying near asking prices by high pressure unscrupulous salesmen/a*rses ( probably mostly in london and their-abouts ), are keeping the stats up and the reality from hitting.

Anecdotally I know of two recent sales at prices way out of step for the area (West Herts) - and both have moved out from London

One being my new next door neighbour, who is facing the embarrassing reality that an identical property just four doors away is still on the market for £100k less than they paid just a month ago. Apparently they arrived in town knowing absolutely nothing about the area and brought the first house that they viewed.

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If that was the case why not wait 5 years till it really bottoms and fear sets in ?

Typically that would be about £50K for those 5 years of rent.

Also factor in the fact that many people buying now could have paid off most of their mortgage in 5 years. So why wait?

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Typically that would be about £50K for those 5 years of rent.

Also factor in the fact that many people buying now could have paid off most of their mortgage in 5 years. So why wait?

please explain how in 5 years 'many people buying now could have paid off most of their mortgage' - can't see it myself unless there is rapid wage inflation and low low interest rates for the next 5 years (most new buyers are not on the wonderful trackers)

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please explain how in 5 years 'many people buying now could have paid off most of their mortgage' - can't see it myself unless there is rapid wage inflation and low low interest rates for the next 5 years (most new buyers are not on the wonderful trackers)

Would that be all those people on 70k a year who live in the land of make believe?

May i suggest that people realise the value of money. This is done by saving up a large sum of cash, for example to buy a car, and the handing over that 15k for your tin box on wheels. It is only easy when you are paying on credit.

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We see from the facts that asking prices are rising.

We hear from anecdotal evidence that some "fools" are paying close to asking price.

The land registry is dropping.

The haliwide indexes showing up huge anamolys ( which I believe will now drop for the rest of the year ).

I think that means ( using some simple arithmetic ) that for every fool paying too much, many people are getting a bargain.

So, I think the fools, i.e. the idiots being conned into paying near asking prices by high pressure unscrupulous salesmen/a*rses ( probably mostly in london and their-abouts ), are keeping the stats up and the reality from hitting.

Isnt it time we stopped stupid people from self harming ?

Is there some sort of jacket device or a electrified collar we can fit them with ?

Anecodotal I know.

An acquaintaince of mine put his house on the market at the weekend. He chose to believe the highest valuation from the five estate agents he consulted. It's a bog standard semi in buckinhamshire

He had 16 viewings over the weekend and 3 asking price offers 1 from a cash buyer.

So there are still plenty of greater fools out there.

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please explain how in 5 years 'many people buying now could have paid off most of their mortgage' - can't see it myself unless there is rapid wage inflation and low low interest rates for the next 5 years (most new buyers are not on the wonderful trackers)

Of course it's possible. Here's an example:

A typical STRer who sold for 300k, might walk away with >100k in the bank.

He buys a house now for 200k, (that was previously 300k) with a <100k mortgage.

So lets do the maths...

Currently you can get 5 year fixes at 4.54% (HSBC)

Over 5 years you can pay off most of the 100k Mortgage (i.e >50K) simply by paying 933 per month.

Hardly rapid wage inflation, and hardly low low interest rates.

Most people buying now, as we are led to believe, are these cash-rich buyers, with this sort of deposit.

So it's entirely correct that many people buying now could have paid off most of their mortgage.

There I've explained it. Want to apologise now for being rude and a bit thick?

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Anecodotal I know.

An acquaintaince of mine put his house on the market at the weekend. He chose to believe the highest valuation from the five estate agents he consulted. It's a bog standard semi in buckinhamshire

He had 16 viewings over the weekend and 3 asking price offers 1 from a cash buyer.

So there are still plenty of greater fools out there.

Sold SUBJECT TO CONTRACT.

Wait and see what happens when those 3 buyers try and get a mortgage.

And I'll wager ACTUAL CASH that the cash buyer ISN'T a cash buyer, it's simply someone who doesn't have a house to sell.... but still needs a mortgage. Estate agents class anyone who doesn't have to sell a house before being able to buy as a cash buyer.

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So lets do the maths...

Currently you can get 5 year fixes at 4.54% (HSBC)

Over 5 years you can pay off most of the 100k Mortgage (i.e >50K) simply by paying 933 per month.

So lets do the math again, that looks very wrong :blink:

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Anecodotal I know.

An acquaintaince of mine put his house on the market at the weekend. He chose to believe the highest valuation from the five estate agents he consulted. It's a bog standard semi in buckinhamshire

He had 16 viewings over the weekend and 3 asking price offers 1 from a cash buyer.

So there are still plenty of greater fools out there.

Sold SUBJECT TO CONTRACT.

Wait and see what happens when those 3 buyers try and get a mortgage.

And I'll wager ACTUAL CASH that the cash buyer ISN'T a cash buyer, it's simply someone who doesn't have a house to sell.... but still needs a mortgage. Estate agents class anyone who doesn't have to sell a house before being able to buy as a cash buyer.

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So lets do the math again, that looks very wrong :blink:

I've put it into a couple of calculators with the same result. Maybe it is wrong, but this is the result I get:

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post-5321-1251131320_thumb.jpg

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I've put it into a couple of calculators with the same result. Maybe it is wrong, but this is the result I get:

I thought you said the principal should be 100K not 50K

He buys a house now for 200k, (that was previously 300k) with a <100k mortgage.

...

Over 5 years you can pay off most of the 100k Mortgage (i.e >50K) simply by paying 933 per month.

Interest on another £50K would make a dent in your repayment schedule - closer to £35K than £50K by my fag packet calcs.

EDIT: checked online, 100K, @4.54%, paying £933 per month for 5 years would leave you owing £63K - £37K paid off

http://www.bretwhissel.net/cgi-bin/amortize

Edited by daiking

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I thought you said the principal should be 100K not 50K

I only said that you could pay off more than half the mortgage at 933 a month, which is true as demonstrated. My example was talking about paying off a debt of 50K over 5 years, not specifically of the real mortgage. But you have a very good point and it was wrong of me to put it that way, and forget about the other half of the mortgage. I should know better. Maybe I'm being a bit thick in the working example, but my point still remains, a lot of buyers can pay off their mortgages very very quickly with small LTVs and low interest rates. I was not thinking of a 5 year mortgage.

Try this:

100k mortgage at 4.54% over 10 years.

Payment of 1038 per month will leave you with about 50% paid off after 5 years.

Edited by twatmangle

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Of course it's possible. Here's an example:

A typical STRer who sold for 300k, might walk away with >100k in the bank.

He buys a house now for 200k, (that was previously 300k) with a <100k mortgage.

Please tell me where you can find a house that "was 300k" that is now 200k.

Everywhere I'm looking, houses that "were 300k" are now 280k. (unless they are absolute dumps!)

tim

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Please tell me where you can find a house that "was 300k" that is now 200k.

Everywhere I'm looking, houses that "were 300k" are now 280k. (unless they are absolute dumps!)

tim

Don't be fooled by the difference between asking and sale prices

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I only said that you could pay off more than half the mortgage at 933 a month, which is true as demonstrated.

No it's not.

Demonstrating that 933 pays off a 50K mortgage in 5 years does not demonstrate that you will pay off half of a 100K mortgage in those 5 years.

Because, you've got to add back in the interest on the 50K that you've not payed off.

tim

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