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Time to raise the rents.

The Fate Of People Who Never Buy Their Home

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Morning all.

Many of you have heard me talk about my Auntie in Australia. She sold her house in Bondi Junction in Sydney in 1992 in her 40's. She never got around to buying again with the $100,000 AUD that she took away from the sale. She banked that money. At one point she was into shares & saw it rise to $140,000. Within days it dropped back to £100,000. On my advice she sold out although she was worried she might miss out on potential gains. Those shares have now disappeared from the market altogether as they were a Biotech stock that went under in the end. The shares never rose above what she sold for, so she is now grateful.

But would she listen to me? No. I suggested a stock market tracker fund that by now would have doubled her money & provided a fairly steady growth.

Of course her desire was always to buy again, but she didn't at the time, because her money wouldn't buy her a place that she would be satisfied with in Bondi Junction. It would have bought a 1 or 2 bed flat outright though. Her problem was that her partner who left her at the time was the main earner & she relied on his income to get a mortgage prior to the break-up.

Anyway. Her money that was the equivalent of a 1/2 bed flat, is now the equivalent of 20-30% of a flat. She reckons she's done well, because for 13 years now she's only spent the interest :( and the money is still a little over 100k AUD.

She has been living in a dilapidated relocatable home for a few years now that she bought for $8000 years ago and pays $80pw for the site & I just spoke to my sister in Melbourne who told me that she has just been kicked out of the sort of mini-village that these 'homes' are in because of an ongoing dispute with one of her neighbours.

Click here to see a desireable relocatable home in the same town.

Anyway she is now homeless, jobless & in her late 50's & I'm afraid that she will end up committing suicide or lose her sanity in the dire circumstances she is in. It's really only that money in the bank that makes her feel she has anything worthwhile in life.

This is a true story & I hope we don't see a generation filled with people like this.

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Everybody on this board has an interest in buying property in the future.The only thing these people are doing here is finding information that will help their timing.They do not want to be tenants forever but they also know that if they enter now they will be negative equity for years, simple really. I as an investor, do not want to see my initial investents plummet and I then end up having to take the "long term view".Timing is everything.

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Morning all.

Many of you have heard me talk about my Auntie in Australia. She sold her house in Bondi Junction in Sydney in 1992 in her 40's. She never got around to buying again with the $100,000 AUD that she took away from the sale. She banked that money. At one point she was into shares & saw it rise to $140,000. Within days it dropped back to £100,000. On my advice she sold out although she was worried she might miss out on potential gains. Those shares have now disappeared from the market altogether as they were a Biotech stock that went under in the end. The shares never rose above what she sold for, so she is now grateful.

But would she listen to me? No. I suggested a stock market tracker fund that by now would have doubled her money & provided a fairly steady growth.

Of course her desire was always to buy again, but she didn't at the time, because her money wouldn't buy her a place that she would be satisfied with in Bondi Junction. It would have bought a 1 or 2 bed flat outright though. Her problem was that her partner who left her at the time was the main earner & she relied on his income to get a mortgage prior to the break-up.

Anyway. Her money that was the equivalent of a 1/2 bed flat, is now the equivalent of 20-30% of a flat. She reckons she's done well, because for 13 years now she's only spent the interest  :(  and the money is still a little over 100k AUD.

She has been living in a dilapidated relocatable home for a few years now that she bought for $8000 years ago and pays $80pw for the site & I just spoke to my sister in Melbourne who told me that she has just been kicked out of the sort of mini-village that these 'homes' are in because of an ongoing dispute with one of her neighbours.

Click here to see a desireable relocatable home in the same town.

Anyway she is now homeless, jobless & in her late 50's & I'm afraid that she will end up committing suicide or lose her sanity in the dire circumstances she is in. It's really only that money in the bank that makes her feel she has anything worthwhile in life.

This is a true story & I hope we don't see a generation filled with people like this.

Thank heavens she has a loving nephew who can liquidate one of his many BTL properties and send her the proceeds. Fair play to you for taking care of your aged aunt who did not listen to your investment advice.

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Not that old chesnut again TTRTR..................

Why did she not take up one of those kind Nigerian banking scheme offers?

Has about as much credibility as your 'story'

Face it prices are falling.....fast

You miss timed it badly and no amount of bulling up the sentiments on here will make an difference. The bubble has burst.

Take the hit and retire quietly theres a good chap.

Next time buy low and sell high. :lol:

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Thank heavens she has a loving nephew who can liquidate one of his many BTL properties and send her the proceeds. Fair play to you for taking care of your aged aunt who did not listen to your investment advice.

Tell the truth TTRTR. You bought the flat from her "below market value" back in 1992, and have been renting it to her ever since.

Unfortunately she can't keep pace with your rental demands, so it's time to give auntie the old heave-ho.

Van Hoogstraten would be proud of you!

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I know someone who bought a property (not their first - divorce etc) but it might as well have been as they were starting again. They bought it right at the peak of the last boom. Couldn't have timed it better.

Couple of years later following redundancy - usual IR malarkey - couldn't pay mortgage. Fell into arrears. Couldn't sell. House worth a bit more than half what they paid for it.

Did a moonlight flit - handed the keys over to the building society - and moved into a cash job at the seaside living in a caravan.

Years go by - eventually come back and get, effectively, their old job back. Within 5 minutes of paying NI again, building society chases the debt and they have to agree to pay (admittedly only a portion) of it off. Still paying that £20 a month and will until the day he dies.

Got back on housing ladder in about 1998 and yes, house went up. Decided to move into property investment and bought 2 houses - one up north, moved into the other and rented out the old one. Blow me - redundancy again, only now much older, kids in tow. Moonlight flit not an option - well not needed yet. But both BTL properties now disposed off, savings whittled away because no income - not a lot of equity in current house. Future not looking rosy.

Okay he may have made some mistakes.

Moral of story.

I think it's simple. In this nutty world where no-one has much job security and a recession may always be just around the corner - it is very dangerous to stretch yourself to buy property at the top of the market.

I know other people will say 'I bought at the top of the last boom - rode out the crash - and now my house is worth a lot more. I say - you have no guarantee which of those two scenarios apply to you.

Also, I believe it is different this time. Globalization is becoming a bigger factor in our economy every day. Reckon we are in for hard times for a long time and the next property boom may be 20 years away.

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TTRTR,

N=1 is not an adequate sample, so no general conclusions can be drawn. As Marina pointed out, you can buy at the wrong time and get stuffed by life too.

I yearn to own a place of my own but a) to buy high makes no sense, and B) I refuse to sweat on the hamsterwheel of usury for 25 years to pay off the mortgage, so I intend to save and invest in likely bulls for probably another 5 to 10 years. Then I will take out a 7 year loan to buy a house in the post-crash slump. The point about a 7 year loan is that you pay double the monthly payments of a 25 year mortgage but you pay it all back in just seven years. I can hack paying back a loan for 7 years, but not 25. Besides, I'll be pushing 50 by then and not in a position to get a 25 year loan.

I did own a house back in the late 80s, but for various reasons, including living abroad and poverty, never got back in on the act this time.

I doubt many HPC contributants have any basic hostility to owning a house, they rightly object to a market that is exploited by money-lenders to keep ordinary working class people indentured to the banks most of their working lives. This was the basic principle of Mrs Thatcher - nail those pesky working classes down with mortgages and bribe them off with cheap motoring. It has worked, brilliantly. So far.

By working class people I mean anyone who earns mostly from their salary, rather than from investments. A brain surgeon is therefore working class. A BTL type is part of the feudal-commercial crust, or scum. :P

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Not to be picky but you are showing as much credibility as TTRTR with

“Face it prices are falling..... fast”

It’s not quite true is it – when arguing with TTRTR it’s best to stick to some facts so how about

Face it prices are going to fall …. And when it does it will fast

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It’s not quite true is it

The aspiring expats I know are often talking about cutting 30/40/50k off the price of their 200-400k millstones that are keeping them in this country until they can sell. Is that not 'prices falling fast'?

Just because Joe Average would rather hold out for 300k for their two-bed flat rather than accept it's really worth about 80k and sell now for 250k while still making a big profit, that doesn't mean that the prices of places that are actually selling aren't dropping.

As far as I can see, the only prices _not_ falling fast are those of the houses that aren't selling.

Edited by MarkG

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I was presuming that he was referring to the British market – if he was talking about the Australian market then I take it all back.

I didn't realise he was talking about the Australian market: I was talking about people who want to emigrate from the UK, have their emigration visas, but can't leave because no-one will buy their pile of bricks and mortar at an extortionate price.

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Anyway she is now homeless, jobless & in her late 50's & I'm afraid that she will end up committing suicide or lose her sanity in the dire circumstances she is in. It's really only that money in the bank that makes her feel she has anything worthwhile in life.

And speculators like you TTRTR are responsible for this mess! Bet she's proud of you....

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TTRTR.

If you can understand how the guy in your avatar can stay on the bike despite all that spin (he stays on by carrying out the right action at the right time), why cant you understand that folks here just want to get the timing right too.

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TTRTR.

If you can understand how the guy in your avatar can stay on the bike despite all that spin (he stays on by carrying out the right action at the right time), why cant you understand that folks here just want to get the timing right too.

Been out for the day folks. Sorry for no replies. But the above seems to sum it up fairly well.

Yes a buy can also be badly timed in terms of making money. But please accept my point that had she bought a home outright that she could have afforded at the time, her life would be very different now & she'd have security that is really nothing short of priceless compared to what she has now.

What was her deep down problem (and still is)???? Procrastination.

You really can't predict the future with any certainty & I bet most of you bears have been saying the market will fall for 5 years or more now. That would have put you near enough in the same boat as she is were you not younger & employed as most of you are.

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Been out for the day folks. Sorry for no replies. But the above seems to sum it up fairly well.

Yes a buy can also be badly timed in terms of making money. But please accept my point that had she bought a home outright that she could have afforded at the time, her life would be very different now & she'd have security that is really nothing short of priceless compared to what she has now.

What was her deep down problem (and still is)???? Procrastination.

You really can't predict the future with any certainty & I bet most of you bears have  been saying the market will fall for 5 years or more now. That would have put you near enough in the same boat as she is were you not younger & employed as most of you are.

Yep she could of bought herself alittle security, or she could of sold that 100K worth of shares when they were at 140K , then bought back in and sat on 40K, she could of then spent $500 on a posh meal and choked on a chiken bone that killed her.

Life is full of mistakes that can be recognised in hinsight, if she would of banked the extra 40K then you wouldnt have a story - stuff like that happens every day and you dont recognise it.

She could of took that extra 40K and re-invested it into a differnt company(s) and now be a millionaire... could of would of should of never mean sh*t when looking in hinsight.

Me spending 110K now to get a bedsit makes no sense what so ever - ill sit this one out.

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Is owning a house is such a natural instinct like salmon's that eclipses any reasoning? People who spend a day shopping for cheaper toilet paper would not hesitate blowing tens of thousands away.

You can't take the box with you when you're dead so why?! Please explain me like I'm 5 years old.

Daddy, if your bank can take our house away than it is not ours? Why did you buy it then?

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Not this old chestnut again!

In the end, your aunt's problem was that she was a sheep. She let greed lead into a dodgy venture in the stockmarket, got the fright of her life, and missed out on the best decade that the stockmarket has ever seen through irrational fear.

Ultimately, I think it comes down to this: some types of people will always aquire and accumulate wealth, and some will always lose it. Your aunt clearly falls into the latter (edit) category.

Edited by Van

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Yep she could of bought herself alittle security, or she could of sold that 100K worth of shares when they were at 140K , then bought back in and sat on 40K, she could of then spent $500 on a posh meal and choked on a chiken bone that killed her.

Life is full of mistakes that can be recognised in hinsight, if she would of banked the extra 40K then you wouldnt have a story - stuff like that happens every day and you dont recognise it.

She could of took that extra 40K and re-invested it into a differnt company(s) and now be a millionaire... could of would of should of never mean sh*t when looking in hinsight.

Me spending 110K now to get a bedsit makes no sense what so ever - ill sit this one out.

Yes procrastination.....I also thought an 89k studio flat or bedsit as you might prefer had little potential 6 years ago when I had a prime chance to buy it. It's now a 185k studio with no potential. :(

It would have made a perfect low cost pad for me on my frequent trips to London. Instead I have to have a bigger place & lose money monthly versus what that one would have cost me.

All very clear in hindsight as you say. But one thing is clear, we are nobodies without a bolt-hole of our own. Don't get me wrong here, renting is a legitimate bolt-hole, but renting depends on a steady income.

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Is owning a house is such a natural instinct like salmon's that eclipses any reasoning?  People who spend a day shopping for cheaper toilet paper would not hesitate blowing tens of thousands away.

You can't take the box with you when you're dead so why?!  Please explain me like I'm 5 years old. 

Daddy, if your bank can take our house away than it is not ours?  Why did you buy it then?

Son. I bought it so we could live in it while I work hard to pay it off. I'll then have a place to live for the rest of my life and the value of my hard work will pass to you when I die. You should do the same for your family.

Don't worry kiddo, you'll understand what I mean when you grow up......

:D

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Yes procrastination.....I also thought an 89k studio flat or bedsit as you might prefer had little potential 6 years ago when I had a prime chance to buy it. It's now a 185k studio with no potential.  :(

It would have made a perfect low cost pad for me on my frequent trips to London. Instead I have to have a bigger place & lose money monthly versus what that one would have cost me.

All very clear in hindsight as you say. But one thing is clear, we are nobodies without a bolt-hole of our own. Don't get me wrong here, renting is a legitimate bolt-hole, but renting depends on a steady income.

This is exactly what you have to keep in mind when talking to the FTB'rs here :) That property now has no potential, infact it will probably drop in value, i dont want to be saddled with a bedsit thats dropped in value.

6 Years ago was just before the madness started, so that place would probably of been worth about 45K round these parts, which would of been worth buying at 2.7 times my income at the time. Unfortunatly wages havn't risen as much as HPI so now the same place has gone up to 4.2 times my wage now (i am on a above average salary too).

I dont think anyone would argue that owning your own place is a bad move , infact thats exactly what most of us here want, but there is very little point in me on a managers salary buying a bedsit now when i firmly believe that in a couple of years time i can buy a semi.

The longer i wait the more money i save and the more prices fall, im not trying to time things perfectly, i am trying time it just well enough to not get burnt financially and have my financial future ruiend by one emotional decisson.

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Not this old chestnut again!

In the end, your aunt's problem was that she was a sheep. She let greed lead into a dodgy venture in the stockmarket, got the fright of her life, and missed out on the best decade that the stockmarket has ever seen through irrational fear.

Ultimately, I think it comes down to this: some types of people will always aquire and accumulate wealth, and some will always lose it. Your aunt clearly falls into the latter (edit) category.

Funny thing Van is that you are 100% correct. Almost everything she has ever touched has failed. Her only success was that house she owned.

The hilarious yet worrying thing though, is that she has always fancied herself as a shrewd player. :(

I see a lot of people on this forum that have very little at stake (same as my aunt), yet also see themselves as shrewd players.

You may call it an oldie BTW, but I'm just updating it by bringing her eviction from the caravan park to the forum. Because she had an $80pw liability to rent her site, they also have the power to throw her out.

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  • 301 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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