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david m

Sheeple's Btl Addiction Can't Be Stopped

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My wife saw this topic on Mumsnet. Clearly the BTL addiction is not over yet ...

http://www.mumsnet.com/Talk/legal_money_matters/1038176-Is-it-possible-to-release-money-from-pension-to-buy

"I've seen a cracking little flat that I'd like to buy to let, just don't have the deposit at the mo and can't release equity from our own house as its dropped so much in value. I even have a tenant lined up!

Is it possible to release money from your pension scheme to buy property to let?

Thanks in advance!"

My god! You'd think that the fact that their house had "dropped so much in value" might have given her a hint ... clearly not!

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Even by 1900 only 9% of Brits owned their own home.. everyone else was renters on the land. So it is so deeply ingrained in our culture to become an owner, and maybe one day, maybe if you work really hard, become one of the rentiers yourself. Like the ultimate goal or something.

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Even by 1900 only 9% of Brits owned their own home.. everyone else was renters on the land. So it is so deeply ingrained in our culture to become an owner, and maybe one day, maybe if you work really hard, become one of the rentiers yourself. Like the ultimate goal or something.

Fashions come and go, sometimes it pays to be an owner sometimes a renter....depending on the government/lending policy of the time. ;)

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There will always be morons like this buying at all points of a falling Market. The intelligent 'investors' won't be buying now.

Within the last week I've heard 2 individuals both saying that BTLs are still the best form of pension. One a heating engineer self employed and a recent divorcee who is absolutely potless but refuses to sell her flat, cos its her pension ! Their belief is caused by the many success stories around - it will take many years to change this opinion. BTW both Sun readers and probably get most of their info from Talksport or mumsnet.

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BTL Addiction is very much alive, believe me.

I am an IFA and it astounds me just how little belief has been shaken out of people by the "Global Financial Crisis". Bricks & mortar is seen as the safe haven, despite the fact that the other nations hit hardest, US, Ireland and Spain have suffered collapses in the sector.

I recently "advised" (listened to) a retiring Policeman who decided to spend his £130K Pension Lump Sum on a BTL, despite already having 90% of his existing net wealth in residential property.

Having predicted a HPC since 2005 I am less convinced by the day. The economic conditions are right for one, but the mindset of the sheeple is most certainly not.

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Within the last week I've heard 2 individuals both saying that BTLs are still the best form of pension. One a heating engineer self employed and a recent divorcee who is absolutely potless but refuses to sell her flat, cos its her pension ! Their belief is caused by the many success stories around - it will take many years to change this opinion. BTW both Sun readers and probably get most of their info from Talksport or mumsnet.

House prices have been rising so long no one can remember when houses were a bad investment. It's like buying shares at £5 because they were once £8 and therefore are a bargain, it is historical only.

This will continue all the way to the bottom

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House prices have been rising so long no one can remember when houses were a bad investment. It's like buying shares at £5 because they were once £8 and therefore are a bargain, it is historical only.

This will continue all the way to the bottom

Funny thing is most of the BTL success stories are of people old enough to have experienced the falling market of the early 90s . The more recent entrants are doomed but their elder brothers/sisters/uncles etc may have lucked out and probably think they are bound to get a bit of luck too.

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Property is a leveraged hedge against inflation. Its the easiest and simplest way to insure against inflation. Inflation has been pretty much non stop for the past 100 years which is why property over the past 100 years has been such a good inflation hedge. Even during property crashes, you didn't have to wait that long to get your money back, an you had to be incredibly badly timed to buy at a peak/loose money. The last 100 years has seen constant HP inflation, interspersed with one or two two year periods where we had a HPC... The question is, do you believe in future price/wage inflation, and if not why not?

Edited by AteMoose

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Funny thing is most of the BTL success stories are of people old enough to have experienced the falling market of the early 90s . The more recent entrants are doomed but their elder brothers/sisters/uncles etc may have lucked out and probably think they are bound to get a bit of luck too.

Trouble is, people who lost out in the early 90s were completely deprogrammed by the pwoperdee superbubble that got going in around 95/96. I highy recommend browsing through the BBC archives for house price stories circa 1996-98 like this one, they could see prices were going up again but property professionals and the media were pretty skeptical as the last HPC was still fresh. Many were predicting a correction or at the very least a stagnation, and this at a time when the average house price was still £60-odd k! Reckon they were right, just a decade or so and trillions of pounds in mortgage debt too early...

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Trouble is, people who lost out in the early 90s were completely deprogrammed by the pwoperdee superbubble that got going in around 95/96. I highy recommend browsing through the BBC archives for house price stories circa 1996-98 like this one, they could see prices were going up again but property professionals and the media were pretty skeptical as the last HPC was still fresh. Many were predicting a correction or at the very least a stagnation, and this at a time when the average house price was still £60-odd k! Reckon they were right, just a decade or so and trillions of pounds in mortgage debt too early...

That's my point, the growth/bubble has been so big general opinion is that houses are a safe bet.

I was chatting to a friend on saturday who is buying another buy to let, he has no fears of a HPC, I didn't bother mentioning it, what is the point, in 20 years it'll be worth more than it is now

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BTL Addiction is very much alive, believe me.

I am an IFA and it astounds me just how little belief has been shaken out of people by the "Global Financial Crisis". Bricks & mortar is seen as the safe haven, despite the fact that the other nations hit hardest, US, Ireland and Spain have suffered collapses in the sector.

I recently "advised" (listened to) a retiring Policeman who decided to spend his £130K Pension Lump Sum on a BTL, despite already having 90% of his existing net wealth in residential property.

Having predicted a HPC since 2005 I am less convinced by the day. The economic conditions are right for one, but the mindset of the sheeple is most certainly not.

Its like everything,if you buy in the dips or bottoms with anything you will probably do ok, even with BTL, and dont mind some agro. At least a BTL sits there and you can look at it. Other than gold there isnt much else you can say that for. I woudnt rule BTL out for younger persons who buy in the coming couple of years.

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The question is, do you believe in future price/wage inflation, and if not why not?

Depends on the timescale you mean by "future". I think we will continue to see price inflation without wage inflation for a while yet.

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Trouble is, people who lost out in the early 90s were completely deprogrammed by the pwoperdee superbubble that got going in around 95/96. I highy recommend browsing through the BBC archives for house price stories circa 1996-98 like this one, they could see prices were going up again but property professionals and the media were pretty skeptical as the last HPC was still fresh. Many were predicting a correction or at the very least a stagnation, and this at a time when the average house price was still £60-odd k! Reckon they were right, just a decade or so and trillions of pounds in mortgage debt too early...

Correct me if I'm wrong but weren't shares/normal pensions still pretty attractive at the time ? FYI i first bought in 1993, sold/bought 1996 and sold/bought 1999.

So basically have bugger all mortgage and all complete luck. Could do with moving but can't afford anything with my earnings being virtually stagnant.

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BTL Addiction is very much alive, believe me.

I am an IFA and it astounds me just how little belief has been shaken out of people by the "Global Financial Crisis". Bricks & mortar is seen as the safe haven, despite the fact that the other nations hit hardest, US, Ireland and Spain have suffered collapses in the sector.

I recently "advised" (listened to) a retiring Policeman who decided to spend his £130K Pension Lump Sum on a BTL, despite already having 90% of his existing net wealth in residential property.

Having predicted a HPC since 2005 I am less convinced by the day. The economic conditions are right for one, but the mindset of the sheeple is most certainly not.

Heem... so the retired policeman lived in a £1m+ house ?

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the thing I find difficult to comprehend is 'where will your buyer a few years down the line get the money to buy your overpriced 'investment property' ' the ponzi scheme has to be fed from the bottom or it will collapse. in 20 years or so you will probably make a profit but that's not much use as a pension (unless of course you are in the first flush of youth)

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House prices have been rising so long no one can remember when houses were a bad investment. It's like buying shares at £5 because they were once £8 and therefore are a bargain, it is historical only.

This will continue all the way to the bottom

in a nutshell

the real terms losses will be staggering

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That's my point, the growth/bubble has been so big general opinion is that houses are a safe bet.

I was chatting to a friend on saturday who is buying another buy to let, he has no fears of a HPC, I didn't bother mentioning it, what is the point, in 20 years it'll be worth more than it is now

over 20 year timneframe beginning today property will probably represent a significant loss in real terms. leveraged as well, even worse.

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The question is, do you believe in future price/wage inflation, and if not why not?

Price inflation in essentials like food- but wage inflation no- too much competition from overseas and technology to allow wages to rise that fast.

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over 20 year timneframe beginning today property will probably represent a significant loss in real terms. leveraged as well, even worse.

I hope you are right but the problem is people are still looking over the LAST 20 years and reckon it'll be the same, there could be enough of them to help this continue.

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My wife saw this topic on Mumsnet. Clearly the BTL addiction is not over yet ...

http://www.mumsnet.com/Talk/legal_money_matters/1038176-Is-it-possible-to-release-money-from-pension-to-buy

"I've seen a cracking little flat that I'd like to buy to let, just don't have the deposit at the mo and can't release equity from our own house as its dropped so much in value. I even have a tenant lined up!

Is it possible to release money from your pension scheme to buy property to let?

Thanks in advance!"

My god! You'd think that the fact that their house had "dropped so much in value" might have given her a hint ... clearly not!

:o

:(

Thanks for posting it.

I knew the sheeple will never stop trying to buy, but that the very person who lost all equity in her own home, is still trying to buy... that takes it to (yet) another level...

Jeeezus!

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I hope you are right but the problem is people are still looking over the LAST 20 years and reckon it'll be the same, there could be enough of them to help this continue.

but that is not intrinsic value, it is a bubble, and I doubt it will continue that long

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over 20 year timneframe beginning today property will probably represent a significant loss in real terms. leveraged as well, even worse.

I imagine we can't get figures on the amount of leverage going on, and I think this amount of leverage is unique to this housing bubble amongst Joe Punter.

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  • 146 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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