Is It Game Over?

[Bruce Banner]

I'd still be a little wary though if the SHTF big time and only the first few percentage able to get their funds out and off elsewhere quickly, what happens if banks freeze all their transaction for days or weeks whilst a crisis is occuring ?, by then it could of all collapsed in a bad way for you.

There is no way I'd wait until the SHTF. If I'm uncomfortable holding Sterling my money will be elsewhere, as a considerable amount was between 2007 and 2011.

[Spoony]

The property bug is so strong that even otherwise sane people would consider buying one somewhere else even though they can't live in it, because they can't afford one here.

Great comment - that's about right. Apart from I can't afford to buy one. I can, even at these stupid prices because I worked and saved like hell. But I can't bring myself to buy an overpriced house that will eventually fall. Seems like a waste of the savings and I want at least some reward for my lost decade. This my issue hence the thought of get one outside the UK

[wherebee]

Spoony - I've held off commenting to see what others have to say. My view is that there is a lot of wisdom in this thread. A lot of ****** too, mind. My ten nuggets of advice are:

1. Be careful not to fall into the trap of houseowning defining who you are - otherwise you will feel 'life on hold'. I miss having a house, but it does not define me

2. Recognise that you cannot blame yourself for things outside your control. I doubt more than 1 or 2 people on HPC saw just how batshit crazy a Tory lead coalition would be in kicking the can down the road

3. Recognise that renting gives you freedom - I am earning 5x what I did in 2007, and paying a tax rate of 15%. Only possible because I moved across three continents. If you stick in one place through habit, then you are giving up one of the major advantages of renting, which is moving to where the money is. Distance does not destroy family or friend relationships, by the way - often you work harder and they get better

4. Get fit. It sorts the mind, and gives you energy to build a real life

5. Put yourself out there to meet new mates and new birds. When I was newly single I was working on both almost every day. Found a great woman in the end, but numbers do matter. The biggest difference to my previous relationships is that this one understands the value of money and how destructive debt is. I made it clear from the get go to about 10 women in five years who were possible relationships, and 9 did not get how a dollar spent today on credit is a week more working when you are 60. 1 did. I married her. I must have met 50-100 other women in that time, via internet dating, work, random meets on the street, hobby clubs, sports clubs (but NOT bars). I also have mates in 5 countries now, whch gives us a network for holidays and intelligent talk

6. A strict five year plan never works. Events, dear boy, events. All I do is have a loose goal 'I would like a house I can feel at home in and a garden big enough for vegies and fruit trees'. I do not know where or when, but that goal keeps me sane. Also keeps me saving hard. I could end up in UK, EU, Oz, NZ, Asia......

7. Diversify. If things do turn bad, governments and banks WILL take your money. Spread the love.

8. Don't be a miser whilst you save. We spend a lot on travelling to see family and friends, but very little on material things, so we can still save - but we don't feel that we miss out. NB It's also not on credit.

9. Don't sweat the small stuff. Idiots, parking tickets, etc, just think how in a million years no one will care

10. You ARE right not to have taken part in the insanity. You are unhappy, but can get happy if you think differently. If things go badly wrong, as they may do (or may not do), there are MILLIONS of people in the UK who will be shattered and destroyed mentally until the day they die, because the debt they took on will cause them to lose everything. You are not at risk of that.

Finally, have a *****. Often makes everything seem better*, and decreases your chance of prostrate.

*as long as you don't use horse pron or something that makes you feel dirty....

Edited July 29, 2013 by wherebee

[Spoony]

If you scratch hpc enough you will believe it or not find some happy people. Some of them bought a house and some rent. Some have partners/wives and some don`t.

Spend a piece of your STR fund on you and do exactly what you want to do. Have a little fun and instead of sitting in traffic... Go Off Road and see where you end up.

Love and Peace Brother Spoons !!

Thanks and points taken I will try to do that

[Bloo Loo]

Great comment - that's about right. Apart from I can't afford to buy one. I can, even at these stupid prices because I worked and saved like hell. But I can't bring myself to buy an overpriced house that will eventually fall. Seems like a waste of the savings and I want at least some reward for my lost decade. This my issue hence the thought of get one outside the UK

dont think of it as buying/not buying a house.

think of it as taking/not taking a LIAR LOAN.

[Spoony]

Thought id throw my 2p into this

.....My new place thats just going through I have a 65% LTV and the fanatics amongst us will chirp up what happens if prices fall by 35%. Well the answer is simple really ill still have the house, woman, job and lifestyle i currently love! Thats if society hasn't collapsed. If that happnes who gives a sod about how much money you have in the bank.

There are probably gonna be dark times ahead so find yourself a good woman and get back to enjoying life. Make sure you buy somewhere you can get a short mortgage on or overpay. Then you can stop worrying about crap you have no control over like inflation/rates/currency etc

Think I've just snapped recently, i want to get back not not giving a stuff about anything but myself, friends and family. The world can go to hell if it wants ive got bugger all control anyway.

I know its all a bit anti-hpc but there you go.

Take it easy

CaptainHangover

Thanks, all that noted. I hope it all works out for you. Yes, I would like to go back to being a happier person who looks forward to the good times to come. Somebody who is positive about the economy and the future. Being so 'doom and gloom' is depressing for people who hang around me even if it is true and realistic. I think when you buy house you hope for the positive and almost switch side. But the reality is, ZIRP will end and the UK will face its demons. It would be nice not to worry anymore about inflation, interest rates the exchange rates etc and just enjoy life. If I did buy I wouldn't have to take on that much of a mortgage - I can't bring myself to do it - it would be like the last 10 years of waiting were for nothing, especially once the market did correct. It would be sods law that once of the oldest bears here did it - that the market would go south and I would kick myself. What keeps re-occuring on this thread is that HPC'ers have to stop focusing just on HPI/HPC, and live some more. It just that whenever a new government scheme comes out or rates go lower or RPI goes higher, the anger I have towards the government and system just makes me save harder, spend less and live less, become more miserly if you like. I've even become strategic when I shop at Tesco now, going around with a calculator to make sure I don't spend a £ over their £40 spend to get my £6 off when I have one of those vouchers! Nothing I buy is full price. I know everything I buy and the cycle of when they have them at full price and then weeks later on offer on 2 for 1's or half price etc. I hate Tesco but I like to buy all their loss leaders.

[winkie]

...or this.

[Spoony]

I'm 41 and have jut been through a divorce after 18 years of marriage. It doesn't matter though, I'm now free and for the first time in my life - happy!

You're using the lack of a HPC as the barrier between you and happiness, it's not. The barrier is you.

More wisdom. Maybe that is true. I suppose there is nothing stopping me getting out there and living more. I just hope if I meet a new gf she won't want to buy a bloody house!

[Tired of Waiting]

Do you not think a UK government might use hyper inflation to reduce the real value of Government debt (and your money)?

I didn't say it was a good idea for anyone but for people with savings in GBP it is even worse than for home owners (unless they get it out quickly which history says most wouldn't).

Sure, I think we will keep having inflation, probably even higher than now, and sterling devaluation. And in my case I moved most of my savings out of sterling in Sept 2009 (I started a thread about it back then). But that's why I made a point of writing that "even low yielding sterling savings accounts" (a bad investment) wouldn't be as bad as house prices, coz with high inflation IRs will go up, protecting at least partially a sterling savings account, whilst crashing HPs.

[Tired of Waiting]

History from how far back? Presumably before it was possible to transfer funds and switch currencies on a phone call or instantly at the touch of a button!

That too.

Perhaps before this Thursday? Just in case?

[motch]

More wisdom. Maybe that is true. I suppose there is nothing stopping me getting out there and living more. I just hope if I meet a new gf she won't want to buy a bloody house!

The more you get out and about the more opportunities arrise and unexpectedly which are often the best experiences.

Keep your options open and honest early on so no-ones getting hurt, gets harder later on.

[winkie]

There is no earthly way of knowing which direction we are going.

[Bland Unsight]

No it is not. The 1945 - 1980 maybe was the truly extraordinarily (lucky) economic times for the Western population who managed to grow into the working age during that time - even that, it lacks certain nice stuffs like Ipad obviously.

The time were are in is crazy, but it is in no way extraordinary from historical perspective. I think it was like 10% or so of the people owned a house at the turned of the last century.

I know that you might find it difficult to believe, but I when I suggested that we are living through extraordinary times, I wasn't thinking mostly about house prices and levels of home ownership.

What I think is extraordinary is how the UK banking sector has been consolidated to just a handful of lenders, (the 2011 market share figures from the CML show that just 6 lenders account for 80% of the mortgage market), that most of those lenders are in distress (RBS and Lloyds are in public hands, Barclays and Nationwide are getting lent on pretty hard by the PRA and both are getting stuck into the FLS scheme which gives you some indication of the quality and quantity of sound assets they have on their balance sheets to offer prospective creditors as collateral, Santander are presumably no stronger than the Spanish banking sectors and Spanish economy taken as a whole , which just leaves HSBC as a vaguely legit business). That means that 70% of UK mortgages are held by banks and building societies, that were it not for the actions of the state would all be bankrupt. (In fact, as the remaining 30% includes power houses like the Co-op, 70% is conservative)

To my mind, that's extraordinary.

[Spoony]

I genuinely don't get the people on this site. It's like you're putting your lives on hold waiting to be proved right.

Seriously, take a step back and look at yourself. You're almost forty. If you don't get on with it soon you'll be looking at mortgages below a 25 year term and then things are going to get impossible for you. I hope that you have a seriously good pension because in twenty years time when you start to think about retiring, you're going to realise that you're f*cked.

There comes a point when you just have to start living your life. If you don't to buy a house that's fine, but stop wailing about the unfairness of it all. We all have the same opportunities - you just have to work for it.

I'm 33 and have just purchased my first house. It was on for £250k, and we got it for £225k. It needs work and the mortgage is about £200 more than my rent was, but I'm very happy with the situation as it gives me a direction that I'm happy to go in. In 25 years I'll have paid it off and will be able to live whatever life I have left with some level of security. I also won't have spend the majority of my life waiting for a train that's never going to arrive. You need to roll the dice at some point, or leave the casino. That crash you have been waiting for has never happened, and it isn't going to happen in the way you are depending on it to. You lost the hand - don't go bankrupt on the game of life just because of money. It's clearly ruining your life and turning you into bitter and twisted individuals.

I think you have the best intentions. But your thinking is of a newbie who I think does not understand the laws of economics, the history of house price booms and busts. I feel like I am preaching to someone at my workplace or something or someone who has joined from the singing pig or MSE. But I shall go on. It is rampant house price inflation and inflation of other assets causing a bubble which was fuelled by an uncontrolled speculative credit bubble of large proportions. This has caused an abnormal housing bubble, again speculative and very large which did start to fall a fair bit thus proving this site and others right but then the QE and 0% rates were used and the falls stopped. Not many of us predicted this would happen but all it has done is put off the inevitable. Never have so many tools and schemes been used to keep house price high. What is happening now is not normal You approach of buying a house and it will go up and in 25 years.... this is a traditional approach which I don't think is suited for the times we are now living in. Yes it worked for your parents etc but that was then this is now.

The big question is what will happen next?

10 + years of small falls and rises evening out to be a real terms fall until correction is completed?

Or a trigger to remove the support over which the government will no control over this time. End of QE, Double digit inflation, interest rates at 4%, this will be a nightmare for those especially who stretched to buy at these prices with HTB etc. Its like nobody HAS LEARNT A THING from all the bail outs and financial crisis.

[chronyx]

And in my case I moved most of my savings out of sterling in Sept 2009

How, and into what?

[Spoony]

Spoony - I've held off commenting to see what others have to say. My view is that there is a lot of wisdom in this thread. A lot of ****** too, mind. My ten nuggets of advice are:

1. Be careful not to fall into the trap of houseowning defining who you are - otherwise you will feel 'life on hold'. I miss having a house, but it does not define me

2. Recognise that you cannot blame yourself for things outside your control. I doubt more than 1 or 2 people on HPC saw just how batshit crazy a Tory lead coalition would be in kicking the can down the road

3. Recognise that renting gives you freedom - I am earning 5x what I did in 2007, and paying a tax rate of 15%. Only possible because I moved across three continents. If you stick in one place through habit, then you are giving up one of the major advantages of renting, which is moving to where the money is. Distance does not destroy family or friend relationships, by the way - often you work harder and they get better

4. Get fit. It sorts the mind, and gives you energy to build a real life

5. Put yourself out there to meet new mates and new birds. When I was newly single I was working on both almost every day. Found a great woman in the end, but numbers do matter. The biggest difference to my previous relationships is that this one understands the value of money and how destructive debt is. I made it clear from the get go to about 10 women in five years who were possible relationships, and 9 did not get how a dollar spent today on credit is a week more working when you are 60. 1 did. I married her. I must have met 50-100 other women in that time, via internet dating, work, random meets on the street, hobby clubs, sports clubs (but NOT bars). I also have mates in 5 countries now, whch gives us a network for holidays and intelligent talk

6. A strict five year plan never works. Events, dear boy, events. All I do is have a loose goal 'I would like a house I can feel at home in and a garden big enough for vegies and fruit trees'. I do not know where or when, but that goal keeps me sane. Also keeps me saving hard. I could end up in UK, EU, Oz, NZ, Asia......

7. Diversify. If things do turn bad, governments and banks WILL take your money. Spread the love.

8. Don't be a miser whilst you save. We spend a lot on travelling to see family and friends, but very little on material things, so we can still save - but we don't feel that we miss out. NB It's also not on credit.

9. Don't sweat the small stuff. Idiots, parking tickets, etc, just think how in a million years no one will care

10. You ARE right not to have taken part in the insanity. You are unhappy, but can get happy if you think differently. If things go badly wrong, as they may do (or may not do), there are MILLIONS of people in the UK who will be shattered and destroyed mentally until the day they die, because the debt they took on will cause them to lose everything. You are not at risk of that.

Finally, have a *****. Often makes everything seem better*, and decreases your chance of prostrate.

*as long as you don't use horse pron or something that makes you feel dirty....

Thanks for all that. So you like a fair few here moved abroad. I wish I could do that, I am stuck in in my job or its a pay cut. Even to another part of the UK

[Spoony]

You are absolutely right!

Very well put.

Even low yielding sterling savings accounts are safer than UK houses. We can wait. No hurry.

Meanwhile we have flexibility, and freedom. Not bad.

To the OP: You had many great replies in this thread, like posts #47 #93 #169, and many others.

Regarding relationships, when issues of money and properties come up, I would just give a short explanation of your position, tell her that you are aware of data showing that properties are over-valued (more so in London/SE/SW), like prices/earnings, that you do have some savings, but prefer to wait until IRs normalise and house prices come back down to more normal levels. If she is sceptical you can show some links, data, articles, etc. Then, if your friend is unable to understand your quite logical and prudent attitude, well... in that case, would you really want this person as a life-partner, and mother of your children?

I have to reply to this. The ex concerned used to often say that if I keep saying something is going to happen for long enough then it probably will. That is an arguement starter as she would not listen to calmly explained reason. Her problem was she could not wait any more years. A lot of women are the same. But as wherebee said about finding the one who understood about the cost of credit, some would understand. Its hard to find beauty and brains, lots are already taken.

What a thread this is turning out to be btw, keep it coming. Hard hitting subjects like women combined with HPC and life advice I thank you all for the contributions. I think a lot have come back to HPC forums after Osbournes HTB PR last week. It certainly triggered off a lot of frustration in me

Edited July 29, 2013 by Spoony

[Priced_Out_GenXer]

This month, for instance, I haven't saved anything because I had to pay my car insurance, aa membership, and mot, and I bought myself a new bike. But from next month through to next spring I'll probably save £600 to £900 per month, with the exception of one month when I intend to buy a new iPhone.

Wait, so there really are people who can't afford to buy a house because they're spending all their money on iPhones?

I hope that was a joke. I make some pretty big sacrifices to keep saving and increase my deposit fund. I hardly think buying an iPhone once every three years is going to make any difference in the grand scheme of things.

Edited July 29, 2013 by Priced_Out_GenXer

[Dorkins]

I hope that was a joke.

Don't worry, it was!

[Lagarde's Drift]

Don't worry, it was!

I'm not so sure... £300 is >1.5% of £18k.

[frederico]

I spoke to someone today who intends to get a BTL as a pension, he thinks house prices are only going to go up. If the worst comes to it, in 25 years its bound to have gone up he says and he will have paid of the mortgage.

I can see the point, but as many people have pointed out the real financial situation is unprecedented. I could not buy until either the market has crashed or some sort of normality has returned.

The current situation is plainly unsustainable.

Yes people need to get on with their lives, but a huge debt, negative equity and no job is not a life.

[zugzwang]

I spoke to someone today who intends to get a BTL as a pension, he thinks house prices are only going to go up. If the worst comes to it, in 25 years its bound to have gone up he says and he will have paid of the mortgage.

I can see the point, but as many people have pointed out the real financial situation is unprecedented. I could not buy until either the market has crashed or some sort of normality has returned.

The current situation is plainly unsustainable.

Yes people need to get on with their lives, but a huge debt, negative equity and no job is not a life.

It's Tokyo, 1993. Prices are bound to go up again because they always have in the richest and most successful economy the world has ever seen. Fill your boots.

Or maybe not.

[Its time to buy]

http://www.youtube.com/watch?v=itvJybdcYbI

^If you can wait 10 years, then you can sit through 2.07 minutes of this. "PLEASE SING" along in a lonely quiet dark room with a bottle of whisky....[hiccup]

----

And so I cry sometimes when I'm lying in bed

Just to get it all out, what's in my head

And I, I am feeling a little peculiar

And so I wake in the morning and I step outside

And I take A deep breath and I get real high

And I scream from the top of my lungs,

What's goin' on

And I say hey, hey, hey, hey hey

Hey, hey, hey

I said hey, what's goin' on

And I say hey, hey, hey, hey hey

Hey, hey, hey

I said hey, what's goin' on

And he tries

oh my God, do I try

I try all the time in this institution

And he prays

oh my God, do I pray

I pray every single day FOR REVOLUTION!

And I say hey, hey, hey, hey hey

Hey, hey, hey

I said hey, what's goin' on

Don't cry out loud

Just keep it inside

Learn how to hide your feelings

(Hey, hey, hey, hey hey)

(Hey, hey)

HEY EY EY

I say HEY

What's goin' on

YEAH

Edited July 29, 2013 by Its time to buy

[Democorruptcy]

I genuinely don't get the people on this site. It's like you're putting your lives on hold waiting to be proved right.

Seriously, take a step back and look at yourself. You're almost forty. If you don't get on with it soon you'll be looking at mortgages below a 25 year term and then things are going to get impossible for you. I hope that you have a seriously good pension because in twenty years time when you start to think about retiring, you're going to realise that you're f*cked.

There comes a point when you just have to start living your life. If you don't to buy a house that's fine, but stop wailing about the unfairness of it all. We all have the same opportunities - you just have to work for it.

I'm 33 and have just purchased my first house. It was on for £250k, and we got it for £225k. It needs work and the mortgage is about £200 more than my rent was, but I'm very happy with the situation as it gives me a direction that I'm happy to go in. In 25 years I'll have paid it off and will be able to live whatever life I have left with some level of security. I also won't have spend the majority of my life waiting for a train that's never going to arrive. You need to roll the dice at some point, or leave the casino. That crash you have been waiting for has never happened, and it isn't going to happen in the way you are depending on it to. You lost the hand - don't go bankrupt on the game of life just because of money. It's clearly ruining your life and turning you into bitter and twisted individuals.

Do you know the difference between real and nominal prices?

[Frugal Git]

What a thread this is turning out to be btw, keep it coming. Hard hitting subjects like women combined with HPC and life advice I thank you all for the contributions. I think a lot have come back to HPC forums after Osbournes HTB PR last week. It certainly triggered off a lot of frustration in me

It is a terrific thread, well done for starting it! A lot of very interesting contributions and it's like a combination of other threads in microcosm. It's got everything.

It makes me even more comfortable with my decision a few years ago to, rather than being frustrated just sit back and enjoy the soap opera of politics, economics, other peoples relationships and the housing market, and enjoy the opportunities, comfort and happiness in life that I've got from staying out of all that crap and just being a voyeuristic frugal git.

Edited July 29, 2013 by Frugal Git