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hedgefunded

So, The World Is Collapsing....but...

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Well I've been on here a fair while now. I've watched that nice 'mini-crash' but then things picked up again after Gordo sold us savers down the river.

Seems like there's nothing but doom and gloom in the financial world, yet house prices still remain waaaay to expensive.

It's the big question, and of course nobody really knows, but can we seriously expect a good drop in house prices in the near future? We've all been hoping for it, expecting it, but it hasn't really happened has it?

(Yes, I know, houses are cheap when compared to $US etc...but I want one in good old GBP)

I'm actually in the fortunate position of owning my modest home, but I would like something a little bigger with room for some chickens and pigs...

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Well I've been on here a fair while now. I've watched that nice 'mini-crash' but then things picked up again after Gordo sold us savers down the river.

Seems like there's nothing but doom and gloom in the financial world, yet house prices still remain waaaay to expensive.

It's the big question, and of course nobody really knows, but can we seriously expect a good drop in house prices in the near future? We've all been hoping for it, expecting it, but it hasn't really happened has it?

(Yes, I know, houses are cheap when compared to $US etc...but I want one in good old GBP)

I'm actually in the fortunate position of owning my modest home, but I would like something a little bigger with room for some chickens and pigs...

I doubt. It won't. The way GBP value is going down. It make sence to rather have a property in hand rather than GBP.

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Well I've been on here a fair while now. I've watched that nice 'mini-crash' but then things picked up again after Gordo sold us savers down the river.

Seems like there's nothing but doom and gloom in the financial world, yet house prices still remain waaaay to expensive.

It's the big question, and of course nobody really knows, but can we seriously expect a good drop in house prices in the near future? We've all been hoping for it, expecting it, but it hasn't really happened has it?

(Yes, I know, houses are cheap when compared to $US etc...but I want one in good old GBP)

I'm actually in the fortunate position of owning my modest home, but I would like something a little bigger with room for some chickens and pigs...

I think this is why many on here are now buying or considering buying. House prices, as I keep telling people, are shooting up in my area... well, asking prices are... and I suspect that is because people are seeing their savings destroyed.

They are wiping out the savings of everyone - goodness knows how pensioners are surviving.

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I think this is why many on here are now buying or considering buying. House prices, as I keep telling people, are shooting up in my area... well, asking prices are... and I suspect that is because people are seeing their savings destroyed.

They are wiping out the savings of everyone - goodness knows how pensioners are surviving.

If the pound collapses (which is not 100% given, we have a lot of debt held by foreigners who might have something to say about that), I think house prices will do little better than staying flat in nominal terms e.g. they will collapse in real terms with GBP.

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It's a tough question for those who have a big deposit (but not big enough to buy cash)

1. Do I buy now, risk losing a chunk of the deposit in a HPC, get a margin call and end up paying a large interest rate?

2. Or not to buy, and risk a very high inflation situation.

My bet is on 2, I think very high inflation is unlikely as there will be a lot of pressure to raise interest rates. And if there is high inflation it will be in prices not wages, so it will squeeze affordability and help house prices tank.

There is a very delicate house of cards holding up house prices. If one card falls, e.g. housing benefit, or low interest rates, or further unemployment, public sector pay cuts, rising cost of imports, rising cost of oil - then it could bring the whole thing crashing down very easily.

A £200k house requires a low interest rate, low cost of everything else and a couple of decent salaries.

Also don't forget prices are marked at the margins .... doesn't take such a big catastrophy for prices to fall. Hell they might just fall for the sake of it!

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It's a tough question for those who have a big deposit (but not big enough to buy cash)

1. Do I buy now, risk losing a chunk of the deposit in a HPC, get a margin call and end up paying a large interest rate?

2. Or not to buy, and risk a very high inflation situation.

My bet is on 2, I think very high inflation is unlikely as there will be a lot of pressure to raise interest rates. And if there is high inflation it will be in prices not wages, so it will squeeze affordability and help house prices tank.

There is a very delicate house of cards holding up house prices. If one card falls, e.g. housing benefit, or low interest rates, or further unemployment, public sector pay cuts, rising cost of imports, rising cost of oil - then it could bring the whole thing crashing down very easily.

A £200k house requires a low interest rate, low cost of everything else and a couple of decent salaries.

Also don't forget prices are marked at the margins .... doesn't take such a big catastrophy for prices to fall. Hell they might just fall for the sake of it!

What on earth makes you think you will get a margin call on a residential mortgage?

I agree with the rest of it though. :)

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Recent UK inflation has been due to £ weakness against imports. We can't have rampant inflation as due to globalisation, wages will not rise in line with an inflationary environment, it would get choked off very quickly if it got out of control. Secondly there is a race going on across the world to devalue currency, its not just us you know. Then there is all those Chinese goods we import, the Chinese government would simply make them cheaper still if demand died here as they don't have an internal market yet and unemployment is a major social risk for them now.

This is the eye of the deflationary storm, hold firm.

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House prices will change but you ask whether they will get "cheaper". The answer to that is "it depends". As the situation deteriorates house prices may well fall, but so will wages and unemployment will rise. So for many people buying a crappy box of bricks will remain a (pointless) aspiration. If prices fall enough and quickly the banks will be hit hard and the government forced to bail them out again. Tax will rise even further to pay for this and so real disposable incomes will fall further and faster. Interest rates will rise making loans more expensive.

Real estate may get "cheaper" if you have the cash to buy it. Even if this is the case its intrinsic value will probably fall since the value of housing as an asset is dependent on rental yield. Furthermore the movement of people geographically either in the search for employment or the desire to avoid punitive taxation may well affect property adversely in comparison to its past value.

The daydream of the many posters who want house prices to collapse, then buy at the bottom, then shoot up again is just that - a daydream.

The chickens and pigs idea sounds nice. You would be well advised to purchase a gun as well ;)

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What on earth makes you think you will get a margin call on a residential mortgage?

I would agree its unlikely but then imagine this scenario.

Im a bank, i need to raise a ton of cash, i have thousands of properties out there which i could margin call on and extract capital from (assuming the owner has any capital) and i dont actually care whether the owner ends up homeless. And lets be very clear the bank does not care at all.

So for now i shall do nothing as there are other avenues to get the liquidity i need... but what happens when all those taps get turned off?

I can margin call and you either give me 40K (example number) or you give me 2% or whatever extra interest every month.. im happy either way because you "the buyer" signed the contract which allows me to do exactly that.

What i think is unlikely to happen with a residential mortgage is margin calls that force sales as that doesnt really help the bank balance sheet much, but a whole group of extra interest with next to no effort helps nicely

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The daydream of the many posters who want house prices to collapse, then buy at the bottom, then shoot up again is just that - a daydream.

IMO, it is not a day dream because house prices will not collapse it is a daydream because everything else could well implode too.

Keeping the value of your 'wealth' steady whilst everything is collapsing around you is going to be the hard bit.

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The daydream of the many posters who want house prices to collapse, then buy at the bottom, then shoot up again is just that - a daydream.

It will happen again whilst we have greed, fear, politicians with bankers that can print money. You just have to wait for those few times in your short life for the opportunities to arise.

I realised this when I was 18 (over 20 yrs ago) whilst learning economics and listening to relatives about wages and houses prices. It took me nearly 10 years for the first buy-low opportunity then the sell-high opportunity came just 6 years later. It looks like we should be getting a another buy-low opportunity when government support gives out and we go the way of the US/Irish markets.

Another boom will come after that just as they always do, although it may be decades away. I think you only get a couple of chances at this during an average working lifespan, the boom/bust/forget cycles are just so long.

VMR.

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I would agree its unlikely but then imagine this scenario.

Im a bank, i need to raise a ton of cash, i have thousands of properties out there which i could margin call on and extract capital from (assuming the owner has any capital) and i dont actually care whether the owner ends up homeless. And lets be very clear the bank does not care at all.

So for now i shall do nothing as there are other avenues to get the liquidity i need... but what happens when all those taps get turned off?

I can margin call and you either give me 40K (example number) or you give me 2% or whatever extra interest every month.. im happy either way because you "the buyer" signed the contract which allows me to do exactly that.

What i think is unlikely to happen with a residential mortgage is margin calls that force sales as that doesnt really help the bank balance sheet much, but a whole group of extra interest with next to no effort helps nicely

There is nothing in residential mortgage contracts for margin calls. There are some BTL contracts that have it though.

VMR.

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I have been reading this forum for quite a while and after reading this discussion it sparked me to register and post my dilemma. I know there have been plenty of topics regarding "should i buy now or wait" but what the topic starter stated here is exactly the confusion I have. However, with that being said I have a suttle difference.

I'm 24 with 164k cash in the bank. Its been sat there a year after selling my previous house at the mid point of the last "mini crash". I was very very very lucky to get rid of the house when I did and lost around 20k overall. All that I have in my mind is that I cant afford to make the same mistake again. With this being said, I am currently looking for a new property infact I found a detached new build on the market for 155k in a good area with everything I could want (bar a small living room). Other houses on the same street are priced unrealistic around 175k but luckily I have a friend who works at the estate agents selling them and their records pretty much show no one will sell unless its at their price and the house im looking at purely is due to the guy wanting a quick sale and moving country. But I have worries, buy a house now for 155k which I could realisticly live in for the next 5 years happily, then wish to move in to something bigger.. or risk the crash and be stuck there with my cash gone down the drain.

What i'm trying to get at is whilst it is always stated how mortgage payments are always the big worry at the moment, how are cash buyers affected by all of this? If the value of the pound drops and the houses crash technically I will just be in the exact situation as I am now. My cash will afford the same type of property because everything around has also declined. For futures sake, what should a cash buyer be aiming at right now? I have the felling I have a good buy infront of me, if the market wasnt so hazardous. The situation makes me want to just sit on the cash due to the sting of the last crash.

Edited by munkee

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I have been reading this forum for quite a while and after reading this discussion it sparked me to register and post my dilemma. I know there have been plenty of topics regarding "should i buy now or wait" but what the topic starter stated here is exactly the confusion I have. However, with that being said I have a suttle difference.

I'm 24 with 164k cash in the bank. Its been sat there a year after selling my previous house at the mid point of the last "mini crash". I was very very very lucky to get rid of the house when I did and lost around 20k overall. All that I have in my mind is that I cant afford to make the same mistake again. With this being said, I am currently looking for a new property infact I found a detached new build on the market for 155k in a good area with everything I could want (bar a small living room). Other houses on the same street are priced unrealistic around 175k but luckily I have a friend who works at the estate agents selling them and their records pretty much show no one will sell unless its at their price and the house im looking at purely is due to the guy wanting a quick sale and moving country. But I have worries, buy a house now for 155k which I could realisticly live in for the next 5 years happily, then wish to move in to something bigger.. or risk the crash and be stuck there with my cash gone down the drain.

What i'm trying to get at is whilst it is always stated how mortgage payments are always the big worry at the moment, how are cash buyers affected by all of this? If the value of the pound drops and the houses crash technically I will just be in the exact situation as I am now. My cash will afford the same type of property because everything around has also declined. For futures sake, what should a cash buyer be aiming at right now? I have the felling I have a good buy infront of me, if the market wasnt so hazardous. The situation makes me want to just sit on the cash due to the sting of the last crash.

Just buy the house & get on with life. Make sure you are buying in good location. Property is all about location location location.

It does not matter if it small or big. But location should be good. You are all safe with your investment. There are still

Many people around the world who would buy property in UK provided they are in good location.

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I have been reading this forum for quite a while and after reading this discussion it sparked me to register and post my dilemma. I know there have been plenty of topics regarding "should i buy now or wait" but what the topic starter stated here is exactly the confusion I have. However, with that being said I have a suttle difference.

I'm 24 with 164k cash in the bank. Its been sat there a year after selling my previous house at the mid point of the last "mini crash". I was very very very lucky to get rid of the house when I did and lost around 20k overall. All that I have in my mind is that I cant afford to make the same mistake again. With this being said, I am currently looking for a new property infact I found a detached new build on the market for 155k in a good area with everything I could want (bar a small living room). Other houses on the same street are priced unrealistic around 175k but luckily I have a friend who works at the estate agents selling them and their records pretty much show no one will sell unless its at their price and the house im looking at purely is due to the guy wanting a quick sale and moving country. But I have worries, buy a house now for 155k which I could realisticly live in for the next 5 years happily, then wish to move in to something bigger.. or risk the crash and be stuck there with my cash gone down the drain.

What i'm trying to get at is whilst it is always stated how mortgage payments are always the big worry at the moment, how are cash buyers affected by all of this? If the value of the pound drops and the houses crash technically I will just be in the exact situation as I am now. My cash will afford the same type of property because everything around has also declined. For futures sake, what should a cash buyer be aiming at right now? I have the felling I have a good buy infront of me, if the market wasnt so hazardous. The situation makes me want to just sit on the cash due to the sting of the last crash.

24 years old ? 164 k in the Bank !!??

Get on a plane to Oz/Canada/NZ and have an amazing year whilst forgetting about money/houses for a while.

Priorites.

Being 24 and having an amazing year abroad WILL NEVER happen to you again.

Having 164k in the Bank may, or may not.

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I doubt. It won't. The way GBP value is going down. It make sence to rather have a property in hand rather than GBP.

why? have you not noticed the more liquid opportunities available in othe4r countries?

why is properdie the magic asset?

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I doubt. It won't. The way GBP value is going down. It make sence to rather have a property in hand rather than GBP.

Just buy the house & get on with life. Make sure you are buying in good location. Property is all about location location location.

It does not matter if it small or big. But location should be good. You are all safe with your investment. There are still

Many people around the world who would buy property in UK provided they are in good location.

What sage advice. FUBRA shall no doubt proceed to close down this august website forthwith.

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Just buy the house & get on with life. Make sure you are buying in good location. Property is all about location location location.

It does not matter if it small or big. But location should be good. You are all safe with your investment. There are still

Many people around the world who would buy property in UK provided they are in good location.

I agree location is very important......but define a good location, what might be good to one might not be so good to another....or should I start a new thread?

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I agree location is very important......but define a good location, what might be good to one might not be so good to another....or should I start a new thread?

I presume definition of Good location in broad sense should be

The recent 3 years of ofsted school report should have 80% plus results

Low local crime rate

Good Upward social mobility of people living in the area.

Such area generally will never have its property price down

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I presume definition of Good location in broad sense should be

The recent 3 years of ofsted school report should have 80% plus results

Low local crime rate

Good Upward social mobility of people living in the area.

Such area generally will never have its property price down

Low local crime rate.

Good community feel.

Good transport links.

Quiet location.

Good mix of local shops that are well used.

Quality build property with gardens.

Good mixture of demographics.

Good employment.

Good schools.

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24 with £160k+ in the bank!?!? Christ, I'm 25 with nowhere near that in the bank - depressing from my point of view :D

There is a high chance that the money came from a gift and that gift came from a sale of a property.....just to show how bad and depressing things have got, a first time buyer buying a first time property around here would need have to have £160K in the bank to buy if earning an average wage solo.

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  • 277 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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