Jump to content
House Price Crash Forum

Recommended Posts

Just to summarize, interest does not even cover inflation. Dont forget the tax you need to take off your 4% too. So since you are spending your partial inflation payment on rent then each year your savings become less in real terms.

Now you could argue that as long as house prices drop more, then by waiting you will save in the long term. I have had this argument myself, if I rent for 5 years and that costs me £40k and house prices go down a lot (say £50k) it has worked out. This was what I thought and told people.

However, what has really happened Is I have rented for 10 years almost, thats £70,800. House prices are around 80% more than what they were 10 years ago, so say they are £180K now rather than £100k. If you can spin this into something positive than go you. Its the biggest mistake of my life, and if keep saying this stops other suckers from falling for your "rent is good" bullsht then thats great. If I was a landlord I would want to convince people renting was good too.

Now personally I have saved myself from this fate by earning more this year than I have paid in rent for the last 10. But that doesnt alter the fact, rent is dead money.

interest is dead money.

Share this post


Link to post
Share on other sites

It was a good time to buy in 2000. Doesn't mean it'sa good time now.

I agree with you, but obviously you have to set some conditions. I would say that some of the news makes it look that house prices could fall, but then that has often been the case in the last few years.

You sound really desperate. Bringing up the same old arguments, that have been shot down many times, in the hope of influencing a new audience. I could keep going, but I can't be bothered. To the 50 odd guests viewing this thread, if you want to buy now, go ahead, see if I care.

Funny, you seem the desperate, petulant one to me. Desperate to convince people not to buy, because if they do you fear prices wont drop and you still wont be able to afford anywhere. The "go ahead, see if I care" line summed it up for me.

Its very difficult to win an argument against someone who has followed your theory for 10 years and realised the folly of it, isnt it?

Personally I will have enough money by this time next year to buy almost outright with a very small mortgage. If things have dropped by then, great, if they are dropping large amounts I will wait. However, I wont wait if after a year of Tory austerity measures, depression, etc nothing has happened, which could quite easily happen.

Dont live your life wishing and hoping. 80% of people dont think house prices will go down, or should. Thats a very difficult majority to fight against, as we have seen.

Share this post


Link to post
Share on other sites

I agree with you, but obviously you have to set some conditions. I would say that some of the news makes it look that house prices could fall, but then that has often been the case in the last few years.

Funny, you seem the desperate, petulant one to me. Desperate to convince people not to buy, because if they do you fear prices wont drop and you still wont be able to afford anywhere. The "go ahead, see if I care" line summed it up for me.

Its very difficult to win an argument against someone who has followed your theory for 10 years and realised the folly of it, isnt it?

Personally I will have enough money by this time next year to buy almost outright with a very small mortgage. If things have dropped by then, great, if they are dropping large amounts I will wait. However, I wont wait if after a year of Tory austerity measures, depression, etc nothing has happened, which could quite easily happen.

Dont live your life wishing and hoping. 80% of people dont think house prices will go down, or should. Thats a very difficult majority to fight against, as we have seen.

I could buy tomorrow, cash, but I'll wait a few years. Buying at the top of the biggest housing bubble ever just seems daft to me, that's why I sold my mortgage free house and banked the money.

Share this post


Link to post
Share on other sites

You sound really desperate. Bringing up the same old arguments, that have been shot down many times, in the hope of influencing a new audience. I could keep going, but I can't be bothered. To the 50 odd guests viewing this thread, if you want to buy now, go ahead, see if I care.

I would have to agree with Johnny Storm that during the period mentioned, it's impossible to deny that owning a house would have been a fantastic investment and much much better than paying rent. But that only applies if you bought and sold at the right times. Over the long term, it's not so clear cut, and I suspect from now you'd be better renting for 5 years.

Share this post


Link to post
Share on other sites

I would have to agree with Johnny Storm that during the period mentioned, it's impossible to deny that owning a house would have been a fantastic investment and much much better than paying rent. But that only applies if you bought and sold at the right times. Over the long term, it's not so clear cut, and I suspect from now you'd be better renting for 5 years.

Yeah, but I'm talking about the future, not the past. In the past I owned a house, now I rent, In the future I may buy again.... not sure when.

Share this post


Link to post
Share on other sites

The most depressing thing is that outside of this forum I don't know anyone who is bearish about prices, all my friends, relatives etc say that prices might stall this year but they'll be no crash.

most people i know are saying you need to buy now before prices take off again! I don't think that will happen, but I also no longer believe there will be any sort of rapid crash.

Share this post


Link to post
Share on other sites

Yeah, but I'm talking about the future, not the past. In the past I owned a house, now I rent, In the future I may buy again.... not sure when.

Bulls always look to the past when their current theory goes to pot.

Anyone can look back and see what the result is...Bulls mistake is they forget the constant in the World....change.

Share this post


Link to post
Share on other sites

most people i know are saying you need to buy now before prices take off again! I don't think that will happen, but I also no longer believe there will be any sort of rapid crash.

Yeh, mine too - strangely they're all homeowners...

Share this post


Link to post
Share on other sites

I would have to agree with Johnny Storm that during the period mentioned, it's impossible to deny that owning a house would have been a fantastic investment and much much better than paying rent. But that only applies if you bought and sold at the right times. Over the long term, it's not so clear cut, and I suspect from now you'd be better renting for 5 years.

If you want to kick yourself about missed opportunities someone who sold to rent mortgage free in 2003 could have put all the money in Apple and now be able to buy 20 houses.

Share this post


Link to post
Share on other sites

Nice to see a real old fashion bull again :)

Welcome back working nomad (presuming you are the very same).. did you lose your old login? I'm sure you used to have more posts and an avatar.

IMHO it is pretty much a foregone conclusion now that we will get more QE.. the trends are all starting to go the wrong way, M4 was dropping off a cliff again last time I saw.. the banks can't have any excuse not to lend.

However, I think the bulls might be in for a little bit of a surprise this time around. Last time the emphasis was on any lending at any cost, it was on supporting asset prices to prevent banking failure.

Now things are a little different.. I get the feeling that the powers that be are quietly pulling the rug on housing now.. they know houses need to correct, and the banks are in a much better position to absorb the losses. I suspect the QE will be firmly aimed at business lending as opposed to propping up cheap residential mortgage products. I don't think they would let houses drop more than 15 to 20% in nominal value.. but there is no doubt in my mind that over the next few years their real value will drop quite significantly.

As for the about cost of ownership, fine, if you wish to exclude capital loss and interest on savings and cost of repairs and home insurance.. then it probably is slightly cheaper to buy on an IO mortgage in some places.... until rates go up.

Share this post


Link to post
Share on other sites

Just to summarize, interest does not even cover inflation. Dont forget the tax you need to take off your 4% too. So since you are spending your partial inflation payment on rent then each year your savings become less in real terms.

Now you could argue that as long as house prices drop more, then by waiting you will save in the long term. I have had this argument myself, if I rent for 5 years and that costs me £40k and house prices go down a lot (say £50k) it has worked out. This was what I thought and told people.

However, what has really happened Is I have rented for 10 years almost, thats £70,800. House prices are around 80% more than what they were 10 years ago, so say they are £180K now rather than £100k. If you can spin this into something positive than go you. Its the biggest mistake of my life, and if keep saying this stops other suckers from falling for your "rent is good" bullsht then thats great. If I was a landlord I would want to convince people renting was good too.

Now personally I have saved myself from this fate by earning more this year than I have paid in rent for the last 10. But that doesnt alter the fact, rent is dead money.

You've been really out of luck with your timing Johnny. I'm not surprising you're feeling pissed off. The VIs have been pulling a lot of rabbits out of hats over the last couple of years and I don't think anyone could have predicted the mini boom of 2009. But, it's getting harder to see how they are going to keep this going for much longer. You've waited this long surely it's worth hanging on for another year or two or are you fated to be that 1980s VW guy?

Share this post


Link to post
Share on other sites

The OP quoted two articles from a bullish point of view, I could do likewise each day from either a bullish, or bear, point of view. I do not - as I do not want to appear to be a spanner.

Share this post


Link to post
Share on other sites

Funnily enough I'm just about to switch back to bear! There's no way any individual government can hold back the tide in this globalised world. All I'm seeing is falling house prices, falling wages, friends and family losing jobs, increasing casualisation of the workforce - and all this is with IRs close to 0.

Edited by gruffydd

Share this post


Link to post
Share on other sites

just been reading the moneysavingexpert property forum and that is certainly very bearish, full of people who can't sell, told to lower price by EA, chains falling through...

Share this post


Link to post
Share on other sites

The VIs have been pulling a lot of rabbits out of hats over the last couple of years and I don't think anyone could have predicted the mini boom of 2009. But, it's getting harder to see how they are going to keep this going for much longer.

here's one way to keep the show going for another 2 years...

Bank wants low rates but hints at more QE

The July meeting of the Bank's monetary policy committee showed that members discussed the need for a further stimulus to the economy amid worsening financial data.

printing-money-415x275.jpg

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 220 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.