Time to raise the rents. Posted November 9, 2005 Share Posted November 9, 2005 http://business.timesonline.co.uk/article/...59131_1,00.html Quote Link to comment Share on other sites More sharing options...
ajh Posted November 9, 2005 Share Posted November 9, 2005 http://business.timesonline.co.uk/article/...59131_1,00.html TTRTR I think werewolves' thread "join the scrap at economicsuk" already points at this article. Quote Link to comment Share on other sites More sharing options...
Guest Charlie The Tramp Posted November 9, 2005 Share Posted November 9, 2005 What I said, by the way, was this: “What we are going to see is modest or no rises in house prices. A very dull market in some ways. A house-price crash in the absence of an economic recession? It just doesn’t happen in the UK.” I agree, but it`s just around the corner. Quote Link to comment Share on other sites More sharing options...
since the beginning Posted November 9, 2005 Share Posted November 9, 2005 A crash is, of course, much sexier than a period of stagnation, so I don’t blame the BBC. Many parts of the media have been itching for the crash to happen. From a crowded field, my nomination for most ridiculous housing headline this year goes to the Express. “House prices slump”, its banner front-page headline screamed on September 30. The story was that Nationwide building society had reported a 0.2% drop in house prices for the month. Some slump. Yep those pesky doom mongers at the BBC always banging on about the Crash! Quote Link to comment Share on other sites More sharing options...
Guest Charlie The Tramp Posted November 9, 2005 Share Posted November 9, 2005 THE average price of a London home has topped £300,000 for the first time. And prices are set to rise further, with two leading estate agents predicting increases of between 3% and 7% next year. ON THE UP: A house in London is worth an average of £300,000 for the first time Property experts are confident that London has escaped the widely-feared crash. Figures published by the Land Registry show prices rose 4.5% last year - enough to push the average figure to £300,329. Wow, what a good investment, better jump on the bandwaggon very quickly, before you miss the boat. From the news blog. Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted November 9, 2005 Author Share Posted November 9, 2005 3% of 300k = 9k 7% of 300k = 21k Both difficult amounts to save from a salary, so in the absence of an HPC, there really is only one option, if you can buy, do buy. Quote Link to comment Share on other sites More sharing options...
Harry Sacks Posted November 9, 2005 Share Posted November 9, 2005 3% of 300k = 9k 7% of 300k = 21k Both difficult amounts to save from a salary, so in the absence of an HPC, there really is only one option, if you can buy, do buy. -fees? -loan interest? THE average price of a London home has topped £300,000 for the first time. And prices are set to rise further, with two leading estate agents predicting increases of between 3% and 7% next year. ON THE UP: A house in London is worth an average of £300,000 for the first time Property experts are confident that London has escaped the widely-feared crash. Figures published by the Land Registry show prices rose 4.5% last year - enough to push the average figure to £300,329. Is that increases in asking prices? TTRTR, Why do you bother? Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted November 9, 2005 Author Share Posted November 9, 2005 IT IS, I think, time to say it out loud. The dog hasn’t barked. The roof hasn’t fallen in. Acacia Avenue hasn’t gone up in flames. House prices, in short, haven’t crashed. In fact I believe the question is, why do you lot bother? Quote Link to comment Share on other sites More sharing options...
Michael Posted November 9, 2005 Share Posted November 9, 2005 In fact I believe the question is, why do you lot bother? the crash is a 7 year project and only the youngsters in here trapped in places like your BTLs are getting impatient Quote Link to comment Share on other sites More sharing options...
Warwickshire Lad Posted November 9, 2005 Share Posted November 9, 2005 In fact I believe the question is, why do you lot bother? Why do you bother to post nearly 4,000 times on a website called House Price Crash when you think there isn't a crash ? Do you get some sort of perverse pleasure out of it ? I am here because I'm speaking as an FTB who has every right to be angry at the present situation. What are you really here for ? Quote Link to comment Share on other sites More sharing options...
Tempest Posted November 9, 2005 Share Posted November 9, 2005 (edited) Sorry to say it but the original bears on this site (incl me) recognised ridiculous price levels in 2003 and called the peak (certainly in the SE) in May/June 2004 - most of those acknowledged then that the "crash" was likely to be a drawn out affair 3-5 yrs or so. Using the 1980s as an analogy, I recall vivdly that public concerns re significant increasing house price levels/inflation started way back in 85 and 86 and continued to surface throughout 1987 and 1988. The London/SE peak back then was Summer 88 but nationally/regionally other areas peaked well into the back end of 89 into 90 (NB it is often overlooked that those regional rises happened at a time when prevailing mortgage rates had already increased from the 8% of early 88 and were in the range of 12-15% from late 88 to early 90 - but writing was on the wall by then and prices fell (later in the north than south but fell all the same). Rough and ready guide I know and there are differences, but in broad terms I think we are in the 1989 phase of the cycle. 88/04 peak SE, 89/05 lagging boom in regions accompanied by big overall fall in sale volumes and early signs of nominal price reductions in SE. Then it took at least 2, 3 and even 4 years (ie 1990-1992) depending on the area from market peak until serious nominal falls were widely reported. That would equate to 2006 through to 2008 in this cycle. I also think this cycle will be elongated downwards by the relatively low nominal interest rates - part of the explanation for some bears' impatience I suspect. However, although an interest rate rise or two in 2006 would be enough to tip things quite quickly IMO, we do not need that as long as consumer debt levels continue to build and all available liquidity at these rates is exhausted (already happening as we are seeing) and the wider economy continues to languish/suffer. Just my view. Edited November 9, 2005 by Tempest Quote Link to comment Share on other sites More sharing options...
lampkin Posted November 9, 2005 Share Posted November 9, 2005 So do all bulls think that the next generation are basically all going to be renters? When the house price crash occurs i hope these people stand up and admit to being wrong and causing a lot of harm to people. Quote Link to comment Share on other sites More sharing options...
Bedsprings Posted November 9, 2005 Share Posted November 9, 2005 I agree with your analysis Tempest. As houses just aren't actually moving off the EA books where I live (East Surrey), I am certain that a significant fall in prices is coming, but it will take time. Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted November 9, 2005 Author Share Posted November 9, 2005 Why do you bother to post nearly 4,000 times on a website called House Price Crash when you think there isn't a crash ? Do you get some sort of perverse pleasure out of it ? I am here because I'm speaking as an FTB who has every right to be angry at the present situation. What are you really here for ? Answer: I post on HPC because I DON'T think there will be a crash. What a great location to make such a statement!!!! Quote Link to comment Share on other sites More sharing options...
geranium Posted November 9, 2005 Share Posted November 9, 2005 (edited) And prices are set to rise further, with two leading estate agents predicting increases of between 3% and 7% next year. Have you ever read: "And Company X shares are set to rise further, with two leading brokers predicting increases of between 3% and 7% next year"? No, because: 1. Nobody in financial markets is allowed to promise anything these days because these markets (unlike housing) are regulated to protect the private investor. Everyone knows very well that share prices go up & down, it's just a fact of life that seems to have been forgotten about housing. 2. Nobody in financial markets would even bother to recommend an investment if they really thought it would only go up 3-7% in a year! I can get 3% post tax on my cash, thank you very much. Edited November 9, 2005 by geranium Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted November 9, 2005 Author Share Posted November 9, 2005 Have you ever read: "And Company X shares are set to rise further, with two leading brokers predicting increases of between 3% and 7% next year"? No, because: 1. Nobody in financial markets is allowed to promise anything these days because these markets (unlike housing) are regulated to protect the private investor. Everyone knows very well that share prices go up & down, it's just a fact of life that seems to have been forgotten about housing. 2. Nobody in financial markets would even bother to recommend an investment if they really thought it would only go up 3-7% in a year! I can get 3% post tax on my cash, thank you very much. Once again I feel the need to point out the benefits of leverage. If you have £20,000 in the bank, 3% will get you £600 If you have £20,000 as a 10% deposit on a £200,000 property, 3% will get you £6,000. In fact a 30% return on your cash investment. Quote Link to comment Share on other sites More sharing options...
since the beginning Posted November 9, 2005 Share Posted November 9, 2005 Once again I feel the need to point out the benefits of leverage. If you have £20,000 in the bank, 3% will get you £600 If you have £20,000 as a 10% deposit on a £200,000 property, 3% will get you £6,000. In fact a 30% return on your cash investment. Have to look at is as more like a spread bet though really. Maximum possible losses are smaller in the first option. Surely the banks are spreading the risk as well, if houses were such a one way bet why bother with the private investor surely they would buy the f*cking lot themselves. Quote Link to comment Share on other sites More sharing options...
Guest Bart of Darkness Posted November 9, 2005 Share Posted November 9, 2005 3% of 300k = 9k 7% of 300k = 21k Both difficult amounts to save from a salary, so in the absence of an HPC, there really is only one option, if you can buy, do buy. Speak for yourself mate. Quote Link to comment Share on other sites More sharing options...
Harry Sacks Posted November 9, 2005 Share Posted November 9, 2005 Once again I feel the need to point out the benefits of leverage. If you have £20,000 in the bank, 3% will get you £600 If you have £20,000 as a 10% deposit on a £200,000 property, 3% will get you £6,000. In fact a 30% return on your cash investment. £6000! But the interest on the £180k is >£8000. Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted November 9, 2005 Author Share Posted November 9, 2005 Speak for yourself mate. Actually I was speaking for people in general. You may speak for yourself though. £6000! But the interest on the £180k is >£8000. As would be the cost of renting. Or is that not obvious to you? Quote Link to comment Share on other sites More sharing options...
Harry Sacks Posted November 9, 2005 Share Posted November 9, 2005 Actually I was speaking for people in general. You may speak for yourself though. As would be the cost of renting. Or is that not obvious to you? £8100 is the interest at 4.5%. Are there any mortgages at that rate(genuine question)? My folks rent a £300k house for £7200. Quote Link to comment Share on other sites More sharing options...
kevino Posted November 9, 2005 Share Posted November 9, 2005 (edited) As would be the cost of renting. Or is that not obvious to you? TTRTR, you are dead right about the rental cost!!! Most people forget that in their calculations on here. Statements like "I have"X" amount in the bank making me "y" a year. They don't lke it when you tell them "and you are using your interest to pay off your landlord's mortgage"!!!!!! And before you all jump in slagging me off and even accusing me possibly of being TTRTR or Property Guru under another name. I'm not. I think prices will fall but I have to say, some people's desire to bring/wish financial apocalypse on the UK financial system because it is "Their right" to own a home is rather unhealthy I think, maybe you should all get out more........................... Edited November 9, 2005 by kevino Quote Link to comment Share on other sites More sharing options...
geranium Posted November 9, 2005 Share Posted November 9, 2005 £6000! But the interest on the £180k is >£8000. Does a 200k property rent out at £250/pw? Sounds a bit expensive but if so that's 13k rent a year. Less 8k interest leaves you with 5k. But the 5k is before - income tax (40% for a higher rate tax-payer in work) - repair & maintenance (even if that helps offset the tax) - stamp duty, survey, legal fees - rent voids - service charges - management costs (unless you take the time to do that yourself) What is a higher rate tax payer with a job already, who is looking for an investment, really left with TTRTR? Of course, I'd expect a much higher return from property than cash. Cash is moreorless risk free and ...er ... stress free. Quote Link to comment Share on other sites More sharing options...
kevino Posted November 9, 2005 Share Posted November 9, 2005 £8100 is the interest at 4.5%. Are there any mortgages at that rate(genuine question)? My folks rent a £300k house for £7200. Yes, so they pay off their landlord's mortgage and save themselves 900 pounds??? Who's the winner there (assuming the landlord is pretty clued up and professional)??? Quote Link to comment Share on other sites More sharing options...
Harry Sacks Posted November 9, 2005 Share Posted November 9, 2005 TTRTR, you are dead right about the rental cost!!! Most people forget that in their calculations on here. Statements like "I have"X" amount in the bank making me "y" a year. They don't lke it when you tell them "and you are using your interest to pay off your landlord's mortgage"!!!!!! And before you all jump in slagging me off and even accusing me possibly of being TTRTR or Property Guru under another name. I'm not. I think prices will fall but I have to say, some people's desire to bring/wish financial apocalypse on the UK financial system because it is "Their right" to own a home is rather unhealthy I think, maybe you should all get out more........................... No, you are using your savings to pay the BANKS interest, it would cost even more if it was your own mortgage. My folks rent a £300k house for £7200. That's probably less than half the BLT mortgage rate, 2.4%! Their STR fund pays out more than the rent. The mortgage payments they would normally make go in their savings. They don't pay for repairs, insurance and all the appliances are included. No buyers survey if they move no fees no stamp duty No stress! Quote Link to comment Share on other sites More sharing options...
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