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Swiss Fr Mortgages Leave Btl Holiday Appt Owners Deep In The Red

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A Sunday Times Money supplement article today gives a warning about the dangers of speculating on the money markets and foreign holiday lets.

Helen, a 58 year old retired civil servant buys a holiday appt in Cyprus for £177k on a £128,105 mort (but denominated in Swiss Francs) in 2008. Four years later depreciation of £ v SFr has increased the interest only mortgage to £183k, and the monthly payments by £400 pm to circa £1,600. The 2 bed appt has dropped in value from £177k to £121k in sterling terms.

Helen says "I was told the investment would provide me with a stable income in retirement, but instead I'm having to use savings to cover the mortgage payments...".

Another example cited: Ben 37 bought a similar £177k two bedder in 2007 on a £110k mort (also in SFr). The mortgage is now costed at £200k due to Sfr appreciation, and the appt is also valued at £121k. He said "the value (sic) of my mortgage has almost doubled and my only option may be to declare myself bankrupt and walk away."

It must have looked like such a no brainer to speculate in foreign property in 2007 when prices had been going up for 10 years. And denominating mortgages in SFr or Euros unwittingly added another layer of risk. The ST article says that 'tens of thousands of British investors were convinced to put money into the Cypriot market at the height of the housing boom in 2007 and 2008'.

So if you hear another lament asking when the HPC is going to happen - for hundreds of thousands of holiday let BTLers, it already has, big time.

Edit to clarify 1st example

Edited by newbonic

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WHOOPS .

I went to Spain in spring 2002 to look at buying , at that time the prices were still quite sane . But got talking to a woman on the plane who was visiting her retired parent's. She explained that the prices had gone up a lot to what they had been a few years before. She also said if you cannot afford to buy without renting it out DON'T as there was an over supply of holiday lets. She also stated that anyone thinking of moving to Spain and needing to work should not do it as there was not enough work , you must be retired and able to live without working. Also gave a few examples of people who had gone out there and had had to come back as there was liitle work , at least back then they would have been able to sell up.

Was on one of those high pressure sales trips , but the guy kept lying and getting caught out as a few people in our group were quite clued up on various things. He said to one couple when working out their money that the £ would go up against the euro by the time they had to complete on their apartment. The £ was at 1.6 Euros then . Someone in the group said YES but the £ could also go down why do you say it will go up ? the salesman had no answer.

Went back about 6 weeks later not on an organised sales trip and could see a big jump in prices in that short space of time.

One thing I remember with lots of the developments was the sales pitch where they always pointed out the open areas around the developments saying this land ect will never be built on as it is govement circled as outstanding natural beauty ( pile of sh-t lies ) . As I went back in 2006 and these developments were surrounded by masses of other cramped housing . On the first trip there was a development that I was interested in and a certain house within it . When I went back in 2006 I went to see this place , it had become so built up and changed so much that it took me ages to locate it amoung all the other urban sprall.

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Imagine Poland with 200k toxic mortgages in Swiss franc, took at the 2007 property prices peak. Then, CHF gained around 100%, and the property lost around 20% in value... In some cases the amount of unsecured loan is bigger than the value of the property. Or, 200% LTV.

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WHOOPS .

I went to Spain in spring 2002 to look at buying , at that time the prices were still quite sane . But got talking to a woman on the plane who was visiting her retired parent's. She explained that the prices had gone up a lot to what they had been a few years before. She also said if you cannot afford to buy without renting it out DON'T as there was an over supply of holiday lets. She also stated that anyone thinking of moving to Spain and needing to work should not do it as there was not enough work , you must be retired and able to live without working. Also gave a few examples of people who had gone out there and had had to come back as there was liitle work , at least back then they would have been able to sell up.

Was on one of those high pressure sales trips , but the guy kept lying and getting caught out as a few people in our group were quite clued up on various things. He said to one couple when working out their money that the £ would go up against the euro by the time they had to complete on their apartment. The £ was at 1.6 Euros then . Someone in the group said YES but the £ could also go down why do you say it will go up ? the salesman had no answer.

Went back about 6 weeks later not on an organised sales trip and could see a big jump in prices in that short space of time.

One thing I remember with lots of the developments was the sales pitch where they always pointed out the open areas around the developments saying this land ect will never be built on as it is govement circled as outstanding natural beauty ( pile of sh-t lies ) . As I went back in 2006 and these developments were surrounded by masses of other cramped housing . On the first trip there was a development that I was interested in and a certain house within it . When I went back in 2006 I went to see this place , it had become so built up and changed so much that it took me ages to locate it amoung all the other urban sprall.

In 2009, driving from the airport with a friend to her home in Murcia I was struck by the amount of development taking place. There was one particular patch on the way, not exactly sure where it was, which seemed to be a sea of building cranes and high rise flats. I said to her 'who on earth is gong to live in all those flats?' the answer, after a year or two, became clear: no one.

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Imagine Poland with 200k toxic mortgages in Swiss franc, took at the 2007 property prices peak. Then, CHF gained around 100%, and the property lost around 20% in value... In some cases the amount of unsecured loan is bigger than the value of the property. Or, 200% LTV.

My Polish in-laws are in the same boat. Imagine being upside down on a communist era flat... ungh! Anyway, I recently read some drivel from a Polish bank economist about how most Poles in this situation were easily handling the increase in payments so there was no cause for concern. Had to laugh at that one.

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A Sunday Times Money supplement article today gives a warning about the dangers of speculating on the money markets and foreign holiday lets.

Helen, a 58 year old retired civil servant buys a holiday appt in Cyprus for £177k on a £128,105 mort (but denominated in Swiss Francs) in 2008. Four years later depreciation of £ v SFr has increased the interest only mortgage to £183k, and the monthly payments by £400 pm to circa £1,600. The 2 bed appt has dropped in value from £177k to £121k in sterling terms.

Helen says "I was told the investment would provide me with a stable income in retirement, but instead I'm having to use savings to cover the mortgage payments...".

Another example cited: Ben 37 bought a similar £177k two bedder in 2007 on a £110k mort (also in SFr). The mortgage is now costed at £200k due to Sfr appreciation, and the appt is also valued at £121k. He said "the value (sic) of my mortgage has almost doubled and my only option may be to declare myself bankrupt and walk away."

It must have looked like such a no brainer to speculate in foreign property in 2007 when prices had been going up for 10 years. And denominating mortgages in SFr or Euros unwittingly added another layer of risk. The ST article says that 'tens of thousands of British investors were convinced to put money into the Cypriot market at the height of the housing boom in 2007 and 2008'.

So if you hear another lament asking when the HPC is going to happen - for hundreds of thousands of holiday let BTLers, it already has, big time.

Edit to clarify 1st example

'It's me pension, innit.'

Beware of no-brainers!

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Have any of these articles mentioned Merv's role in handing these people their heads on plates?

Indeed, yes, their predicament may be more immediately apparent, but Merv's devaluation by about 40% at peak has been no less than catastrophic for the wealth of ordinary people in this country.

The Pound in your pocket and all that.

And that has caused houses to be bought up by foreigners looking for bargains leaving ordinary housing unaffordable to residents.

Over half of all flats built in central London were bought by non residents last year. It is all the same thing.

With 5 big ones in his pension pot in TIPS I doubt he gives a shit for who gets stuffed - don't forget the millions drawing sterling denominated pensions living abroad, a lot fo those those people have been a relief valve for a country who cannot / will not provide suitable housing for their own population.

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With 5 big ones in his pension pot in TIPS I doubt he gives a shit for who gets stuffed - don't forget the millions drawing sterling denominated pensions living abroad, a lot fo those those people have been a relief valve for a country who cannot / will not provide suitable housing for their own population.

Not too sure whether it's that good for the UK economy to pay UK pensioners to live abroad, when most of that money then goes into another country's economy. The Spanish certainly thought that having UK pensioners in Spain was good for their economy: pensioner arrives, buys over priced house, spends UK state pension, and what's left of the kids' inheritance, and quite often then goes back to the UK to be with their family when their health deteriorates.

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...

It must have looked like such a no brainer to speculate in foreign property in 2007 when prices had been going up for 10 years. And denominating mortgages in SFr or Euros unwittingly added another layer of risk. The ST article says that 'tens of thousands of British investors were convinced to put money into the Cypriot market at the height of the housing boom in 2007 and 2008'.

...

I remember meeting one particularly annoying BTLer in London who was convinced property in Cyprus was going to boom once they joined the euro. The logic: property in Spain and Ireland had boomed when they joined the euro so it obvious it would happen in Cyprus as well. Property only ever goes up you see.

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As I recall the lowest interest rate available sometime around 2004 - 5 was an interest only mortgage from a building society denominated in Swiss Francs. (Might have been Skipton BS).

From what I have seen foreign currency mortgages are always publicised when GBP is strong. Exactly the wrong time to use one. It might turn out to be a good idea to use one now as the GBP is weak.

The other side of the story when someone benefits from GBP strengthening, which happened. (Look at GBP to USD 1995 - 2008.) is never a story. Is there an expert on here that was astute enough to use one?

Edited by sleepwello'nights

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As I recall the lowest interest rate available sometime around 2004 - 5 was an interest only mortgage from a building society denominated in Swiss Francs. (Might have been Skipton BS).

From what I have seen foreign currency mortgages are always publicised when GBP is strong. Exactly the wrong time to use one. It might turn out to be a good idea to use one now as the GBP is weak.

The other side of the story when someone benefits from GBP strengthening, which happened. (Look at GBP to USD 1995 - 2008.) is never a story. Is there an expert on here that was astute enough to use one?

Taking out a mortgage in CHF when you earn or want to keep money in GBP is however bloody stupid, CHF has been strengthening against the GBP for 40 years from 8 to 1.3 current (including the period you mention) taking a 25 year punt on a government thats spent the last 40 years applying an understated inflation tax to distort the economy against one that doesnt purposefully apply an inflation tax is nuts, it might move countertrend over the odd few years but only a bellend (read savvy british pwoperty investor) would take that punt and then complain about it as being something unexpected

Also

Helen, a 58 year old retired civil servant buys a holiday appt in Cyprus for £177k on a £128,105 mort (but denominated in Swiss Francs) in 2008. Four years later depreciation of £ v SFr has increased the interest only mortgage to £183k, and the monthly payments by £400 pm to circa £1,600. The 2 bed appt has dropped in value from £177k to £121k in sterling terms.

This calc doesnt make sense, the CHF has appreciated about 40% in that time , how has the mortgage quadrupled given the CHF interest rate is currently the lowest in the world at precisely zero and you can get a 20 year mortgage at just over 2% interest in aggregate

Edited by Tamara De Lempicka

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A Sunday Times Money supplement article today gives a warning about the dangers of speculating on the money markets and foreign holiday lets.

Helen, a 58 year old retired civil servant buys a holiday appt in Cyprus for £177k on a £128,105 mort (but denominated in Swiss Francs) in 2008. Four years later depreciation of £ v SFr has increased the interest only mortgage to £183k, and the monthly payments by £400 pm to circa £1,600. The 2 bed appt has dropped in value from £177k to £121k in sterling terms.

Helen says "I was told the investment would provide me with a stable income in retirement, but instead I'm having to use savings to cover the mortgage payments...".

Another example cited: Ben 37 bought a similar £177k two bedder in 2007 on a £110k mort (also in SFr). The mortgage is now costed at £200k due to Sfr appreciation, and the appt is also valued at £121k. He said "the value (sic) of my mortgage has almost doubled and my only option may be to declare myself bankrupt and walk away."

But the developer has already had their money so he's got rich quick, and the banks are making a killing out of it, so who cares? No-one forced them to become BTLs :huh:

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Taking out a mortgage in CHF when you earn or want to keep money in GBP is however bloody stupid, CHF has been strengthening against the GBP for 40 years from 8 to 1.3 current (including the period you mention) taking a 25 year punt on a government thats spent the last 40 years applying an understated inflation tax to distort the economy against one that doesnt purposefully apply an inflation tax is nuts, it might move countertrend over the odd few years but only a bellend (read savvy british pwoperty investor) would take that punt and then complain about it as being something unexpected

It would have worked in the borrowers favour 1995 - 2000. OK I'm being selective with OANDA's historical charts.

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It would have worked in the borrowers favour 1995 - 2000. OK I'm being selective with OANDA's historical charts.

well yep, like i said there may be the odd few years of countertrend but mortgages debts are long term commitments

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....

Helen, a 58 year old retired civil servant buys a holiday appt in Cyprus for £177k on a £128,105 mort (but denominated in Swiss Francs) in 2008. Four years later depreciation of £ v SFr has increased the interest only mortgage to £183k, and the monthly payments by £400 pm to circa £1,600. The 2 bed appt has dropped in value from £177k to £121k in sterling terms.

This calc doesnt make sense, the CHF has appreciated about 40% in that time , how has the mortgage quadrupled given the CHF interest rate is currently the lowest in the world at precisely zero and you can get a 20 year mortgage at just over 2% interest in aggregate

The ST article said the mortgage payments had increased by £400 (from circa £1200pm) rather than gone from £400 to £1600. Helen's is a pretty sad case though: She must have taken early retirement at around 55 with a big cash lump sum burning a hole in her pocket and a public sector final salary pension, and now she's broke and nearly 60. Why an amateur BTLer like her (and thousands of others) thought it was a good idea to take one massive roll of the dice when she was surely comfortable already is beyond me. Obviously caught up in the 'property only ever increases in price' mania of 2000 - 2008.

At least the 37 year old has enough earning years to recover from the blow.

The developers must be long gone and on their yachts in the med by now.

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She must have taken early retirement at around 55 with a big cash lump sum burning a hole in her pocket and a public sector final salary pension, and now she's broke and nearly 60. Why an amateur BTLer like her (and thousands of others) thought it was a good idea to take one massive roll of the dice when she was surely comfortable already is beyond me.

Me 2 but my mum has done a similar thing. A teacher looking forward to comfortable retirement with a nice nest egg to spend on cruises or whatever old folk do and she fancied herself as a property developer blowing her nest egg on ruined French property, she bought a whole village of derelict houses in the middle of nowhere, none on drains or electricity!

Well at least she can live on her pension.

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The Sunday Times article may have been prompted by one that appeared in the Financial Times on Friday:

Homeowners hit by soaring Swiss franc

The FT article goes on to say that many borrowers who took out these mortgages now believe they should be compensated for their losses on the grounds that they were not warned of the risks involved and that such products should have been restricted to sophisticated investors.

Chris Christofi of Healys, a London-based law firm, is representing borrowers who believe they were mis-sold the product. “I’ve already had about 250 enquiries from borrowers and the number is growing. I would put it in their thousands the number of people affected by this,” he said.

While he is focusing on borrowers who were recommended to take out a Swiss franc mortgage on their Cypriot property, he says he has also had a growing number of calls from borrowers who have taken out these type of loans in the UK.

“It’s a huge problem for a lot of people,” said Christofi. “Most of these people are on the verge of retirement and should never have been sold these products. This is a sophisticated level of investment.”

Christofi said he is currently putting cases together against Cypriot banks that hold these mortgages, with one bank featuring heavily in a lot of the complaints: Alpha Bank.

“In an ideal world, I’d like the mortgages to be declared void but the realistic alternative is that the bank renegotiates and ideally puts people back in the position they would have been had they taken out a loan in their own local currency, or the currency in Cyprus,” explained Christofi.

The article also gives a case study:

Sarah Bott, an advertising director, and her husband Matthew, a sales director, from London, went to work in Hong Kong in 2004. They had two properties in the UK – their home and an investment property – which they decided to rent out to cover the mortgage while they were abroad.

They were subsequently contacted by an adviser from RBS’s Hong Kong office following a referral from a British expat in Mrs Bott’s office. This adviser recommended taking out a Swiss Franc currency mortgage to help reduce the monthly payments on their UK properties, as the interest rates in Switzerland were low.

However, the rapid appreciation of the Swiss franc from 2007 onwards led to RBS forcing the couple to switch their loans back to sterling – as the loan then exceeded the maximum loan-to-value of 75 per cent.

As a result, the couple’s debt increased by £150,000 across the two properties.

“I have spent the last four years with constant anxiety, worry and sleepless nights,” said Mrs Bott. “We were never told by the adviser the true risk of taking out this type of mortgage. We weren’t financially savvy people playing the money markets. RBS shouldn’t be selling these foreign currency loans to people like us.”

The heart bleeds.

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The Sunday Times article may have been prompted by one that appeared in the Financial Times on Friday:

Homeowners hit by soaring Swiss franc

The FT article goes on to say that many borrowers who took out these mortgages now believe they should be compensated for their losses on the grounds that they were not warned of the risks involved and that such products should have been restricted to sophisticated investors.

The article also gives a case study:

The heart bleeds.

Sarah Bott, an advertising director, and her husband Matthew, a sales director, from London, went to work in Hong Kong in 2004. They had two properties in the UK – their home and an investment property – which they decided to rent out to cover the mortgage while they were abroad.

They were subsequently contacted by an adviser from RBS’s Hong Kong office following a referral from a British expat in Mrs Bott’s office. This adviser recommended taking out a Swiss Franc currency mortgage to help reduce the monthly payments on their UK properties, as the interest rates in Switzerland were low.

However, the rapid appreciation of the Swiss franc from 2007 onwards led to RBS forcing the couple to switch their loans back to sterling – as the loan then exceeded the maximum loan-to-value of 75 per cent.

As a result, the couple’s debt increased by £150,000 across the two properties.

“I have spent the last four years with constant anxiety, worry and sleepless nights,” said Mrs Bott. “We were never told by the adviser the true risk of taking out this type of mortgage. We weren’t financially savvy people playing the money markets. RBS shouldn’t be selling these foreign currency loans to people like us.”

For those special occasions when its always someone elses fault

Edit: No doubt moving to HK and likely being paid in HKD they are also suing themselves to give back their employers the currency appreciation in their salaries or more likely that was just a savvy move

600px-Third-party-facepalm.jpg

Edited by Tamara De Lempicka

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A Sunday Times Money supplement article today gives a warning about the dangers of speculating on the money markets and foreign holiday lets.

Helen, a 58 year old retired civil servant buys a holiday appt in Cyprus for £177k on a £128,105 mort (but denominated in Swiss Francs) in 2008. Four years later depreciation of £ v SFr has increased the interest only mortgage to £183k, and the monthly payments by £400 pm to circa £1,600. The 2 bed appt has dropped in value from £177k to £121k in sterling terms.

Helen says "I was told the investment would provide me with a stable income in retirement, but instead I'm having to use savings to cover the mortgage payments...".

Another example cited: Ben 37 bought a similar £177k two bedder in 2007 on a £110k mort (also in SFr). The mortgage is now costed at £200k due to Sfr appreciation, and the appt is also valued at £121k. He said "the value (sic) of my mortgage has almost doubled and my only option may be to declare myself bankrupt and walk away."

It must have looked like such a no brainer to speculate in foreign property in 2007 when prices had been going up for 10 years. And denominating mortgages in SFr or Euros unwittingly added another layer of risk. The ST article says that 'tens of thousands of British investors were convinced to put money into the Cypriot market at the height of the housing boom in 2007 and 2008'.

So if you hear another lament asking when the HPC is going to happen - for hundreds of thousands of holiday let BTLers, it already has, big time.

Edit to clarify 1st example

Quite apart from breaking the most basic rule that you should always have a loan denominated in the currency that you are earning. You have to be absolutely nuts, if you are going to break that rule, to think that the worlds historically strongest currency is going to grow weaker in the future

What were they thinking?

tim

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They weren't. Greed>thinking

What's scary about these case studies is that between Helen, Ben, davidg's mum, there must have been more than half a million quid exported from the UK. Along with Sarah/Matthew's distrous re-mortgaging into SFr (another £500k?) I assume most is now toxic loans sitting on the books of the RBS/Skipton BS etc. Waiting to blow up in the face of the taxpayer.

Multiply these acedotals by hundred of thousands of other wannabe property tycoons and it's a big part of the mess we're now in.

What an opportunity cost to.

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Have Swiss banks provided all of these loans? Or do UK banks offer mortgages in Swiss fr? If it's only Swiss lenders I can imagine the panic gripping the Swiss banking sector although then you have the total genius of seeing the Swiss currency of a save heaven when all that will happen is the Swiss banking system will collapse.

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I really should read the economist more.I remember buying it in zurich airport in 2003 and reading about their predictions for the hosuing bubble

http://www.economist.com/node/1794873

'Within the next year or so those bubbles are likely to burst :o , leading to falls in average real house prices of 15-20% in America and 30% or more elsewhere over the next few years, in line with average price declines during past housing-market busts. This time, however, with inflation so low, house prices will fall more sharply in money terms than they did in the past. In Britain as a whole, for example, average nominal house prices are likely to drop by 20-25%, and in London by much more :ph34r: . Significant numbers of owners may be left with homes worth less than their mortgages—especially as the proportion of owner-occupiers with mortgages exceeding 80% of the value of their homes is higher now than it was in the previous bust in the early 1990s.'

A very prescient article. if I had read it in 2003 I would have observed that despite the caution expressed house prices continued to increase. A slight pause in 2006 and the inexorable increase continued. The behaviour of past housing booms was that prices increased rapidly, they may have dropped slightly but, essentially plateaued until wages caught up. After three years seeing prices continuing to increase would have led many to dismiss the warning. It is only now, 8 years later, that nominal falls despite earlier concerns are being reported more widely.

Given that the housing booms in 1972, 1978, 1989, ( I may not be that exact with the years) resulted in prices plateauing at the end of the boom why would most of us not expect the same pattern to be repeated? A large proportion of the population, myself included, expected the pattern to be the same. After the boom of the late 1980's I treated my house as somewhere to live and bring up my family. It wasn't an investment it was somewhere to live.

Seeing the performance of my portfolio deteriorate after the millennium it was hardly surprising that many of us looked at alternative investments. Houses didn't start to look overvalued to me until 2005, even then I held the belief from past observation that prices would plateau. Housing as an investment since the 1950's has given above inflation returns. Rents tended to increase in line with wages whilst mortgage repayments stayed relatively constant in nominal terms. There was a lot of publicity given to the imbalance between supply and demand in the UK and that further supported the opinion that house prices would be unlikely to fall. Owning houses to rent out was seen as an appropriate strategy to provide an income into retirement. Heavily promoted in the media and by many financial intermediaries. Many investment institutions have a share of their portfolio in property, why shouldn't individuals follow their example.

The property boom was promoted as an opportunity to diversify into housing as an investment. The exotic world of financial derivatives, CDOS, credit default swaps and all the other sleights of hand by the major banks were hardly mainstream topics until the global crisis. The actions of the politicians to protect homeowners from the consequences of a severe fall in house prices is understandable from my perspective. Even Hayek realised that the consequences of a financial crash would cause so much hardship and misery that an alternative should be sought

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Seeing the performance of my portfolio deteriorate after the millennium it was hardly surprising that many of us looked at alternative investments. Houses didn't start to look overvalued to me until 2005, even then I held the belief from past observation that prices would plateau. Housing as an investment since the 1950's has given above inflation returns. Rents tended to increase in line with wages whilst mortgage repayments stayed relatively constant in nominal terms. There was a lot of publicity given to the imbalance between supply and demand in the UK and that further supported the opinion that house prices would be unlikely to fall. Owning houses to rent out was seen as an appropriate strategy to provide an income into retirement. Heavily promoted in the media and by many financial intermediaries. Many investment institutions have a share of their portfolio in property, why shouldn't individuals follow their example.

The property boom was promoted as an opportunity to diversify into housing as an investment. The exotic world of financial derivatives, CDOS, credit default swaps and all the other sleights of hand by the major banks were hardly mainstream topics until the global crisis. The actions of the politicians to protect homeowners from the consequences of a severe fall in house prices is understandable from my perspective. Even Hayek realised that the consequences of a financial crash would cause so much hardship and misery that an alternative should be sought

Pathetic.

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A very prescient article. if I had read it in 2003 I would have observed that despite the caution expressed house prices continued to increase. A slight pause in 2006 and the inexorable increase continued. The behaviour of past housing booms was that prices increased rapidly, they may have dropped slightly but, essentially plateaued until wages caught up. After three years seeing prices continuing to increase would have led many to dismiss the warning. It is only now, 8 years later, that nominal falls despite earlier concerns are being reported more widely.

Given that the housing booms in 1972, 1978, 1989, ( I may not be that exact with the years) resulted in prices plateauing at the end of the boom why would most of us not expect the same pattern to be repeated? A large proportion of the population, myself included, expected the pattern to be the same. After the boom of the late 1980's I treated my house as somewhere to live and bring up my family. It wasn't an investment it was somewhere to live.

Seeing the performance of my portfolio deteriorate after the millennium it was hardly surprising that many of us looked at alternative investments. Houses didn't start to look overvalued to me until 2005, even then I held the belief from past observation that prices would plateau. Housing as an investment since the 1950's has given above inflation returns. Rents tended to increase in line with wages whilst mortgage repayments stayed relatively constant in nominal terms. There was a lot of publicity given to the imbalance between supply and demand in the UK and that further supported the opinion that house prices would be unlikely to fall. Owning houses to rent out was seen as an appropriate strategy to provide an income into retirement. Heavily promoted in the media and by many financial intermediaries. Many investment institutions have a share of their portfolio in property, why shouldn't individuals follow their example.

The property boom was promoted as an opportunity to diversify into housing as an investment. The exotic world of financial derivatives, CDOS, credit default swaps and all the other sleights of hand by the major banks were hardly mainstream topics until the global crisis. The actions of the politicians to protect homeowners from the consequences of a severe fall in house prices is understandable from my perspective. Even Hayek realised that the consequences of a financial crash would cause so much hardship and misery that an alternative should be sought

don't hold back will you? :)

Lots of excuses for greed and stupidity is all I read from Sleepwell. Past 10-30 years I doubt people like Sleepwell know anything about real hardship and misery as they kept trying to expand their portfolios, then blame taking their bearings from mass media and wanting compensation for their stupidity and greed.

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