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benbfc

The Ftb Decision

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OK so probably like a few on here currently mulling over on a daily/weekly basis whether to buy a house.

myself and the mrs are in rented - both young professionals (27) and have a deposit to put down on a semi in the north of england, stable jobs, work hard and would like to plant some veg, put some twigs in our lounge etc!

Mortgage likely be a £100 or £200 less than current rent depending on area.

This site has given me the heads up and confirmed views on two things

- House prices arent rising any time soon, prices generally at 05/6 levels here but that is massively above there 2001-3 levels. Buying now then witnessing a crash back to those levels would put us in the same N.equity issue that many of our friends who bought at peak will now already be in (but probably blissfully unaware!)

OR

- Keep the deposit in the bank, topping it up gradually but seeing inflation erode it in the opposite direction. if the SHTF then banks, £'s etc could be volatile. Worst of all some kind of debt amnesty which leave savers screwed and the indebted winners....

I dont expect to make money on a house purchase in the future. Mindful that we want to protect hard earned savings in the best possible way - at the moment there seems no safe haven (I have read sooooo many gold etc threads cheers) so whats best? For me neither option is satisfactory.

Maybe go round offering 01-03 prices on houses until we find a seller? I am not too fussy about a house as long as it fulfills a few basic criteria however the mrs prob has a picture (that will involve twigs) that makes this route tricky.

Advice and views welcomed.

Devil? or Deep Blue?

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I have to say, that 3.99% 10 year fix floating around is mighty tempting...

But NO! We are in a situation where house prices are simply determined by what debtslaves can pay. If mortgage rates go up from 4% to 6%, house prices will go down 33%, and from 4% to 8%, will go down 50%.

Unless wage inflation suddenly appears from somewhere, but that'll likely only happen on even higher mortgage rates, so my first previous argument still holds ground.

Unless inflation generally kicks in, and your savings are destroyed, in which case you need to hedge out of sterling. Which is why every thread on here turns to gold prices and hoarding beans. Of course, there are other hedges against inflation than just gold and beans.

gold, silver, palladium, platinum, stamps, coins, paintings, cotton, sugar, coffee, cocoa, oil, sports memorabilia, autographs, rubbish 1970's cars, antiques, historically significant agricultural equipment, hogs, cattle, maize, indium, germanium, Pot Noodle, BetaMax recorders, Sinclair ZX80's.

Some of those are tradable on the stock exchange, some are not, some are interesting to hold, some are not, some of them I made up to get ahead of the next bubble, some of them I did not

Datsun

Alfa

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OK so probably like a few on here currently mulling over on a daily/weekly basis whether to buy a house.

Devil? or Deep Blue?

The fact is UK home prices are crazy. The correction is on the way. It's very stubborn but it will come. Take your pick...click here for french comparison

http://www.rightmove.co.uk/overseas-property/property-31289662.html

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Mortgage likely be a £100 or £200 less than current rent depending on area.

Makes it tempting, doesn't it? If you're confident you want to stay in your area, and realistic about maintenance.

- House prices arent rising any time soon, prices generally at 05/6 levels here but that is massively above there 2001-3 levels. Buying now then witnessing a crash back to those levels would put us in the same N.equity issue that many of our friends who bought at peak will now already be in (but probably blissfully unaware!)

05/06 was around the top of the bubble ...

- Keep the deposit in the bank, topping it up gradually but seeing inflation erode it in the opposite direction. if the SHTF then banks, £'s etc could be volatile. Worst of all some kind of debt amnesty which leave savers screwed and the indebted winners....

Your savings are losing value against consumer prices. But you're saving for a house, so actually they're gaining value for you, just so long as house prices aren't inflating.

What we're seeing now is a bit of a reversion to something nearer the mean, after a period of the cheapest consumer prices in history (brought down by cheap imports + investment from the past + resources borrowed from the future) and diversion of the entire economy (to exaggerate just a very little) into property speculation.

FWIW, I'm investing in the real economy. Share portfolio is performing vastly better than money in the bank, even after this summer's falls started presenting attractive opportunities to buy more.

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  • 294 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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