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Daughter-In-Law's Friends Have Bought A House

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Our son and daughter-in-law went to their friends last night to see the new house while we did some baby-sitting for them. As we were leaving the conversation went like this:

DIL "They have got a lovely semi"

Me "How much was it?"

DIL "For a semi it was very expensive at £337k but they made £60k on their other house"

Me "They didn't make anything they are worse off because prices rose so much"

DIL "NO! They made £60k because they bought it for £120k and sold it for £180k"

Me "But if it went up about a third so did the one they have just bought. That would have been £225k without HPI"

DIL Is speechless and looks confused.

Son "Dad means the gap has grown wider"

Me "They now have a £157k gap to fund where without HPI it would only be about £105k. HPI has cost them £52k plus interest on it"

DIL "Well I've never thought of it like that - anyway - they have a nice house and are very happy"

Me "Without HPI they could have had the same house but not had as much debt - they might be happier because they would have a £52k less mortgage. It's the bankers who are really happy about it."

Edited by Redhat Sly

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Our son and daughter-in-law went to their friends last night to see the new house while we did some baby-sitting for them. As we were leaving the conversation went like this:

DIL "They have got a lovely semi"

Me "How much was it?"

DIL "For a semi it was very expensive at £337k but they made £60k on their other house"

Me "They didn't make anything they are worse off because prices rose so much"

DIL "NO! They made £60k because they bought it for £127k and sold it for £187k"

Me "But if it went up about a third so did the one they have just bought. That would have been £225k without HPI"

DIL Is speechless and looks confused.

Son "Dad means the gap has grown wider"

Me "They now have a £157k gap to fund where without HPI it would only be about £105k. HPI has cost them £52k plus interest on it"

DIL "Well I've never thought of it like that - anyway - they have a nice house and are very happy"

Me "Without HPI they could have had the same house but not had as much debt - they might be happier because they would have a £52k less mortgage. It's the bankers who are really happy about it."

Nice. :)

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Maybe you could quickly email her and mention the other 10K extra they also just lost by paying 3% stamp duty instead of 1%.

A good point that will be made next time I see her.

I'll also be enquiring about if the friends have children and how many hours the woman has to work to feed the bankers.

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Our son and daughter-in-law went to their friends last night to see the new house while we did some baby-sitting for them. As we were leaving the conversation went like this:

DIL "They have got a lovely semi"

Me "How much was it?"

DIL "For a semi it was very expensive at £337k but they made £60k on their other house"

Me "They didn't make anything they are worse off because prices rose so much"

DIL "NO! They made £60k because they bought it for £120k and sold it for £180k"

Me "But if it went up about a third so did the one they have just bought. That would have been £225k without HPI"

DIL Is speechless and looks confused.

Son "Dad means the gap has grown wider"

Me "They now have a £157k gap to fund where without HPI it would only be about £105k. HPI has cost them £52k plus interest on it"

DIL "Well I've never thought of it like that - anyway - they have a nice house and are very happy"

Me "Without HPI they could have had the same house but not had as much debt - they might be happier because they would have a £52k less mortgage. It's the bankers who are really happy about it."

This example fundamentally illustrates that unless you are down sizing, emigrating or just selling your house to go live in a box, HPI does benefit absolutely no-one other than the banks. Yet, and this is the real sad part, only a handful of people really 'get it'.

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Our son and daughter-in-law went to their friends last night to see the new house while we did some baby-sitting for them. As we were leaving the conversation went like this:

DIL "They have got a lovely semi"

Me "How much was it?"

DIL "For a semi it was very expensive at £337k but they made £60k on their other house"

Me "They didn't make anything they are worse off because prices rose so much"

DIL "NO! They made £60k because they bought it for £120k and sold it for £180k"

Me "But if it went up about a third so did the one they have just bought. That would have been £225k without HPI"

DIL Is speechless and looks confused.

Son "Dad means the gap has grown wider"

Me "They now have a £157k gap to fund where without HPI it would only be about £105k. HPI has cost them £52k plus interest on it"

DIL "Well I've never thought of it like that - anyway - they have a nice house and are very happy"

Me "Without HPI they could have had the same house but not had as much debt - they might be happier because they would have a £52k less mortgage. It's the bankers who are really happy about it."

Stop confusing people with facts... ;)

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When people can't afford to pay the monthly payment, they'll crash the market. The banks then have the assets back for free, to make money off again, leaving the previous "owners" with the debt.

I shall quote the greatest banker of them all:

“House prices are a matter of opinion whereas debt is real."

http://www.moneyweek.com/articles/money-morning/why-housing-wealth-is-an-illusion.aspx

Wash, rinse and repeat.

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Folks still buying property? Shum mishtake surely, no?

Friends of ours (Hus 64, Wife 60) sold to rent yesterday.

Figured out that they didn't want to still be paying a mortgage on their pension, but willing to pay rent!

But hoping to buy something smaller, for cash, after the crash. :rolleyes:

Renting, like us, for another couple of years I recon.

Oh, we done our sums, and the rent we have paid is way less than we would have lost on our property value, plus any maintenance costs over the last 3 years, and reduced council tax (smaller house).

Interest on our bank deposit paid the rent in 2007, not covering it now of course, but it was still the correct decission.

'Property ladder', what a scam that invention was!

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When people can't afford to pay the monthly payment, they'll crash the market. The banks then have the assets back for free, to make money off again, leaving the previous "owners" with the debt.

I shall quote the greatest banker of them all:

"House prices are a matter of a Vi's opinion whereas debt to bankers is real."

http://www.moneyweek...n-illusion.aspx

Wash, rinse and repeat.

sorted!

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Maybe you could quickly email her and mention the other 10K extra they also just lost by paying 3% stamp duty instead of 1%.

Ooh, ooh, ooh, pick me, pick me!

I bet they addded that to their mortgage, so an extra £61k. And don't forget the mortage interest on that. So that probably means it has roughly cost them an extra £100k overall!!!

Ahhh, that's better. :P

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Folks still buying property? Shum mishtake surely, no?

Friends of ours (Hus 64, Wife 60) sold to rent yesterday.

Figured out that they didn't want to still be paying a mortgage on their pension, but willing to pay rent!

But hoping to buy something smaller, for cash, after the crash. :rolleyes:

Renting, like us, for another couple of years I recon.

Oh, we done our sums, and the rent we have paid is way less than we would have lost on our property value, plus any maintenance costs over the last 3 years, and reduced council tax (smaller house).

Interest on our bank deposit paid the rent in 2007, not covering it now of course, but it was still the correct decission.

'Property ladder', what a scam that invention was!

'Property ladder', what a scam that invention was!

Yep

Most need to be sent back to the "naughty step" to think it all over!

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Good point well made sir.

When you explain this to people (slowly) it's an argument that really does seem to hit home.

It stuns me that it even needs to be explained!

I don't have a degree and yet this has always been absolutely fekin obvious to me. No one ever explained it to me, it is just irreducible.

It's frightening to be surrounded by masses of voters who are so incredibly thick!

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Ooh, ooh, ooh, pick me, pick me!

I bet they addded that to their mortgage, so an extra £61k. And don't forget the mortage interest on that. So that probably means it has roughly cost them an extra £100k overall!!!

Ahhh, that's better. :P

Probably more than that give mortgage interest over the term. Plus of course the "fees" and the losses from re-setting the amortisation calculations. Call it £110K to err on the safe side and spread over a guess of 18 years mortgage to run (to allow the capital gains on the last place)

500 quid a month for the rest of the mortgage.

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"...anyway - they have a nice house and are very happy"

and that's it people!

Against all logic and despite the perceived intelligence of the person declaring such, people will always seek solice in the emotive aspect of a house purchase. It'll ruin 'em but at least they've got their dream home (for now). Some friends of ours are in this very position.

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It stuns me that it even needs to be explained!

I don't have a degree and yet this has always been absolutely fekin obvious to me. No one ever explained it to me, it is just irreducible.

It's frightening to be surrounded by masses of voters who are so incredibly thick!

Yep - it's how they bring us up (no wunder the elites want UK families sticking tiny youngsters into nurseries - imagine how they are manipulating their developing brains!)

It shows how compliant and receptive the population are to the Elite run media brainwashing (whilst they rip you off and abuse you with their Global big businesses)

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"...anyway - they have a nice house and are very happy"

and that's it people!

Against all logic and despite the perceived intelligence of the person declaring such, people will always seek solice in the emotive aspect of a house purchase. It'll ruin 'em but at least they've got their dream home (for now). Some friends of ours are in this very position.

If it's what they truly think then they won't be complaining once the market drops and they're in negative equity.

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Now ask them if DIVA FEVER or STORM should have crashed out of X-factor. Or you won't be invited around again.

For, me I cried. You guys WERE BRILL. YOU Wo|Z ROBBED!

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The moral of the story, buy the Biggest house you cant afford when you are as young as possible. They should have bought the bigger house first and never upsized...

Upsizing is generally daft, unless the property ladder is in effect (underlying wage and general inflation eroding away the debt)

Edited by AteMoose

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  • 140 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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