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Hmmmmm

My Friend Said This....

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If there's a big housing crash there is likely to be a

big economic crash at the same time so there will be

lots of job insecurity and high interest rates. There

won't be a dream time (again) of high wages, job

security, low interest rates and low house prices. Buy

while you can - it's the best pension you will ever

have. You've got loads of cash stashed away - the best

investment you can make is in property ya dope.

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If there's a big housing crash there is likely to be a

big economic crash at the same time so there will be

lots of job insecurity and high interest rates. There

won't be a dream time (again) of high wages, job

security, low interest rates and low house prices. Buy

while you can - it's the best pension you will ever

have. You've got loads of cash stashed away - the best

investment you can make is in property ya dope.

Well you tell him from me that last year houses rose in value by about 3%, if you believe 'em. Others say they fell by 5%.

I put my money in the bank and got 5%, so there!

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If there's a big housing crash there is likely to be a

big economic crash at the same time so there will be

lots of job insecurity and high interest rates. There

won't be a dream time (again) of high wages, job

security, low interest rates and low house prices. Buy

while you can - it's the best pension you will ever

have. You've got loads of cash stashed away - the best

investment you can make is in property ya dope.

Is he very young? or perhaps suffering from memory lapse?

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Well, if you are one of the people who keeps their job in the recession (ie the majority), falling house prices will be very good for you.

Especially if you weren't holding a property when prices started to fall.

Even more so if you had squirrelled away a large deposit earning a good interest rate.

As house prices fall the house-purchasing-power of your savings rises.

If you bought a high-priced house before a recession you would have a house and a large debt.

If you waited you would have a house and a smaller debt.

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so there will be

lots of job insecurity and high interest rates

Two good reasons not to commit to a mortgage right now ...

Unless you wouldn't need a mortgage at all of course - I would need rather a large mortgage to buy a house, despite the STR fund.

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All i know is in 1996 a large 4 bedroom detached house in worcester was 100k, and a two bedroom terrace house sold for 40k. Large detached houses are now 300k, and terraces are 140k Average income at the time was about 22k, average income today is about 28k? Such a large rise against incomes reinforces the fact that prices change against incomes, and the next few years house prices wont be going up against incomes, and incomes arent set to rise dramatically either.

You definatly dont want a morgage if you loose your job, although a bit of savings could be useful...

Edited by moosetea

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If there's a big housing crash there is likely to be a

big economic crash at the same time so there will be

lots of job insecurity and high interest rates. There

won't be a dream time (again) of high wages, job

security, low interest rates and low house prices. Buy

while you can - it's the best pension you will ever

have. You've got loads of cash stashed away - the best

investment you can make is in property ya dope.

Hrm, there is an alternative, grab half of the pile of cash you have stashed and burn it, it's basically the same strategy but this option will also keep you warm.

Aside from rising rates, rising unemployment, falling private incomes in real terms and prices at or just past their peak your friend is right.

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If there's a big housing crash there is likely to be a

big economic crash at the same time so there will be

lots of job insecurity and high interest rates. There

won't be a dream time (again) of high wages, job

security, low interest rates and low house prices. Buy

while you can - it's the best pension you will ever

have. You've got loads of cash stashed away - the best

investment you can make is in property ya dope.

I suspect it will be easier to pass his brain through the eye of a needle than persuade him of the potential economic situation we're facing, and why buying high figures at low interest rates is financial suicide.

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No, but he did buy a 2 bed flat last summer. <_<

People who blindly bought property recently aren't likely to suddenly see the light now. They will just screw their eyes up some more, and try to drag a few more people into their boat for company in the bumpy ride over the waterfall.

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If there's a big housing crash there is likely to be a

big economic crash at the same time so there will be

lots of job insecurity and high interest rates.

It is probably futile pointing out the gaping holes in his argument, but here goes nothing:

If there is a big economic crash aggregate demand in the economy will likely reduce, throttling back inflationary pressure and allowing the BOE to reduce rates to a point where they are "accomodative", ie have a net stimulative effect on the economy. So high interest rates are highly unlikely to coincide with a recession. Look at Japan; they had one of the biggest economic crashes of all time, and rates there are low, not high.

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If there's a big housing crash there is likely to be a

big economic crash at the same time so there will be

lots of job insecurity and high interest rates. There

won't be a dream time (again) of high wages, job

security, low interest rates and low house prices. Buy

while you can - it's the best pension you will ever

have. You've got loads of cash stashed away - the best

investment you can make is in property ya dope.

Unless you buy at the peak.. I know too many people whose lives are still shaped by buying at the peak last time.

also its a different world..

If they are serious about low inflation it is going to take several years for the new house prices of labours policies to take effect.

Lok at what you can change.

I ensured that I am in a stable, recession proof (ish) job..

What did you do..?

I bought a property at the peak. duh..

Also.. I can't afford it

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I suspect it will be easier to pass his brain through the eye of a needle than persuade him of the potential economic situation we're facing, and why buying high figures at low interest rates is financial suicide.

Given that the human brain is of a similar consistency to toothpaste, this would be perfectly feasible with a large syringe and a narrow bore needle. :blink:

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  • 302 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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