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Well, I've Jumped In And Bought A House!


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It's funny, the financial system was on the brink of collapse, unemployment is sky high, the BOE has had to pump massive amounts into the economy to save it, it's dropped interest rates to record lows, house sale levels are and have been at incredible lows, the country is almost bankrupt and what do we have?

A market sentiment that says 'the house market has recovered, prices are up, times are good.

I'm amazed at what's happening, how people are reacting just a few months after potential oblivion but it's the way that it is. Sentiment has changed, attitudes are different and no matter what we al think, the general public doesn't see things like the average HPCer.

ergo you thin sentiment is more important than fundamentals

okaaaaaaaaaaaaaayyyyy......

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It's funny, the financial system was on the brink of collapse, unemployment is sky high, the BOE has had to pump massive amounts into the economy to save it, it's dropped interest rates to record lows, house sale levels are and have been at incredible lows, the country is almost bankrupt and what do we have?

A market sentiment that says 'the house market has recovered, prices are up, times are good.

I'm amazed at what's happening, how people are reacting just a few months after potential oblivion but it's the way that it is. Sentiment has changed, attitudes are different and no matter what we al think, the general public doesn't see things like the average HPCer.

The average guy on the street has long figured out this game.

They can see the government will forced to prop up house prices (print money till the cows come home), keep interest rates low, pay mortgage interest for those out of work etc.

The market is rigged to the upside, it is so obvious for everyone to see.

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It's funny, the financial system was on the brink of collapse, unemployment is sky high, the BOE has had to pump massive amounts into the economy to save it, it's dropped interest rates to record lows, house sale levels are and have been at incredible lows, the country is almost bankrupt and what do we have?

A market sentiment that says 'the house market has recovered, prices are up, times are good.

I'm amazed at what's happening, how people are reacting just a few months after potential oblivion but it's the way that it is. Sentiment has changed, attitudes are different and no matter what we al think, the general public doesn't see things like the average HPCer.

I'll say to you what I say to everyone else who whiffles on about sentiment - SHOW ME THE MONEY!

The amount of money available to buy houses continues to fall. Prices CANNOT continue to rise in that environment.

Sure, we've seen a few STRers get cold feet and jump back in but how long can that go on for?

Not very long. In fact I think we've seen everyone who has the ability to jump back in do so.

The so-called 'stabilisation' in the housing market has persuaded thousands of people to put their house on the market in the last couple of weeks just as the market runs out of buyers.

Anyone want to guess what happens in a market with lots of sellers and few buyers?

The crash continues...

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The average guy on the street has long figured out this game.

They can see the government will forced to prop up house prices (print money till the cows come home), keep interest rates low, pay mortgage interest for those out of work etc.

The market is rigged to the upside, it is so obvious for everyone to see.

This is true as well. They can print money longer than you can stay solvent. They don't care about the value of your savings. If you have a lot of savings you're in a minority. They are forcing you to buy property by keeping Interest rates low, encouraging you to borrow and NOT to save. If you default on your debt, so what? They'll pay your interest (i.e. I will). The only monkey in the works is unemployment but printing and stimulus can take care of that. Jesus the FTSE is at 5000 for Christ Sake and gold is showing serious support above $950. What does that say to you?

Someone prove me wrong. Please!

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People spending their money now are simply doing what the amrket expects them to. Interest rates will rise, taxation will rise, unemployment will continue to rise and ultimately the lax lending that powered the market has gone and shows no signs of returning.

Of course those currently participating in the market feel bullish. They'd be idiots to think otherwise. It no more makes them right than a man mistaking a mirage for an oasis.

It goes both ways of course :) Those out of the market are going to feel bearish. However I feel I have a relatively objective outlook, POV, I've been on both sides over the last week and in my opinion I think that buying now is sensible for me.

I personally think house prices will stagnate for a few years, I don't see massive rises but at the same time I don't see the 40% drops that many people here have suggested but let's be honest, we are all pissing in the wind, we have no idea. The biggest factor in all of this is not swap rates or IBL but what the media is reporting and how it's reported.

Another month where the BBC front page story is "HOUSE PRICES RISE AGAIN, RECORD RISES" and then at the same time "RECORD LOW INTEREST RATES, HELD AGAIN'.

That has an impact and one only needs to listen to people in the office or at the restaurant/dinner party talking about property again.

Prices may fall, prices will inevitably rise again but I've got to the point where it no longer matters, where worrying about this stuff is secondary to what we should all be doing, living our lives. And that for me is key. I don't really care if I lose a few quid at least I have a little place to call home, close to a decent school and a nice big park :)

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This is true as well. They can print money longer than you can stay solvent. They don't care about the value of your savings. If you have a lot of savings you're in a minority. They are forcing you to buy property by keeping Interest rates low, encouraging you to borrow and NOT to save. If you default on your debt, so what? They'll pay your interest (i.e. I will). The only monkey in the works is unemployment but printing and stimulus can take care of that. Jesus the FTSE is at 5000 for Christ Sake and gold is showing serious support above $950. What does that say to you?

Someone prove me wrong. Please!

They cant print money longer the UK can stay solvent though unfortunately, if they could we'd all be looking at Zimbabwe as the bastion of economic prosperity

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Like everyone else, after selling at peak I was selfishly hoping for 30%+ falls in prices but it's just not happened nor do I see it happening. The price level at which I'm buying ~£600k hasn't seemed to move much in London over the past year, £50k here, £50k there, nothing to get too excited and write home about.

I am selfishly looking for 90% falls.

We always follow California. Theyre 55-60% down, probable another 15% or so to go. AND THEY HAVE QE TOO.

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Can't really say if it's a good move or not without more information.

If it's mostly a cash buy then fine, if massive mortgage though.. not such a smart buy.

So you must be backing the deflation horse then. News for you it's on it's last legs dieing under the weight of printy printy cash.

If you are a cash buyer then convert your fund into something inflation proof like NS&I bonds or gold (only buy the gold though on the understanding you would not really own it if we had financial armeggedon) and wait to buy a house.

If you need to leverage then go for it now, money has never been cheaper, then sit back and watch inflation destroy your debt.

Good luck to the OP btw.

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What happened to debt in Zimbabwe?

It depends on whether the debt was at fixed interest or not. I was merely highlighting the point that printing money indefinitely leads to a worse finale than allowing deflation.

My own mind has been made up for a number of years and that is that we are in for a good 5+ of deflation, nothing that has happened in the last 2 years has given me reason to change that opinion so i am happy to stay in cash predominantly, in what i believe to be the safest currencies

Edited by Tamara De Lempicka
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If you need to leverage then go for it now, money has never been cheaper, then sit back and watch inflation destroy your debt.

Surley this inflation will only destroy our debt if the inflation also results in wage inflation? Money is being created but I got no pay rise this year, no one I know got a decent pay rise, if any, and some places are cutting pay/letting people go.

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The average guy on the street has long figured out this game.

They can see the government will forced to prop up house prices (print money till the cows come home), keep interest rates low, pay mortgage interest for those out of work etc.

The market is rigged to the upside, it is so obvious for everyone to see.

That's why I am a bull.

Until the election at least...after that reality is going to bite hard.

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Surley this inflation will only destroy our debt if the inflation also results in wage inflation? Money is being created but I got no pay rise this year, no one I know got a decent pay rise, if any, and some places are cutting pay/letting people go.

Yes, this will translate into wage increases.

Just like 70's Britain.

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Surley this inflation will only destroy our debt if the inflation also results in wage inflation? Money is being created but I got no pay rise this year, no one I know got a decent pay rise, if any, and some places are cutting pay/letting people go.

That is the one thing nobody ever has an answer for. You pay your debts with your wages - not the price of tomatoes.

Even if wages were increasing they would have to be faster than the rate you paid on your debt. If not - then you wold also be losing out.

You need a very specific situation for your debt to be paid off by inflation. Your wages ahve to be movign up faster than the debt. If that doesn't happen ? Then large debt, in this environment, would be painful to say the least.

The entire 'debt paid off by inflation' argument has one serious hole in it. One about the size of hole in the Titanic IMO.

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The average guy on the street has long figured out this game.

They can see the government will forced to prop up house prices (print money till the cows come home), keep interest rates low, pay mortgage interest for those out of work etc.

The market is rigged to the upside, it is so obvious for everyone to see.

oh my god. you really haven't read any of the responses have you...

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Went with the Abbey, put down 40%, I'm buying a Victorian terrace in SW19, 3 bed, 2 bathroom, nice little place, garden too small of course :) Had to pay a bit more because it's close to two excellent schools so there's a bit of a premium there. Going to stay in London for another few years and then moving out and finding something bigger.

Can you tell me what interest rate you got? Is it 0.5%?

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So you must be backing the deflation horse then. News for you it's on it's last legs dieing under the weight of printy printy cash.

What a lot of old 5hit.

The banks have parked the QE money on deposit with the BoE. The only thing QE has achieved is for the bond dealers to scream "Sold to you, Merv!" as they offload what are soon to become worthless gilts.

The supply of money available for house purchase is FALLING

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Updated that for you. Hope you don't mind. ;)

No go ahead, I don't disagree with you.

Just to add though, every western nation's government needs the inflation as well so I guess on that basis we are ALL right royally fecked. It's the perversity of the Britain 'Gordon' has created I am afraid.

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