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MattW

I Wouldn't Touch London Real Estate With A Ten Foot Pole

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Interesting bit about the value of assets 18 minutes in...

He then added that the time to get out of the London market was back in the mid '80s! Has London property been overvalued for the last three decades? :unsure:

Edited by MattW

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What's to say?

Investing in something that 'everybody' else is kind of precludes that it's a bust.

Investing is something that is 'pumped' by newspapers daily?

Calling yourself a saavy investor because you signed away your name to a huge mortgage?

Property. UK. Mugs.

Haha. Say the banks.

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Interesting bit about the value of assets 18 minutes in...

He then added that the time to get out of the London market was back in the mid '80s! Has London property been overvalued for the last three decades? :unsure:

TIme to get IN to London property was the 80`s was what he said

Edited by long time lurking

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+1

Unbelievable.

No wonder they're happy to farm you all now, so ruthlessly.

You're up against hyperinflated prices and all you think back to is wishing you were back in the game to buy loads of houses early enough.

I wish they're has been strict rules stuck to for lending and borrowing, and limitations on BTL and investment property.

And that base rates and QE hadn't been the policy to bail out homeowners... with hpc cheerleaders inviting them to go that way with "ordinary families just wanted a home and were misled into buying as they watch too much property-porn and didn't want to waste money renting."

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I wish I'd bought a dozen in 1985

So then your only problem with the situation is that it wasn't you.

Living in a fair society is what would be nice.

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Given I have no influence over the fairness of society, or macroeconmics. I am now firmly in the camp that says it is best to play the system as it is, rather than fruitlessly try to change it.

Govopoly sets it out nicely

So yes, spotting a government manipulated market and riding the bubble would have produced a better outcome for me than spotting the same bubble and thinking (as I did) that's a bubble, it will pop so I will stay away.

Proof in the pudding for any one buying the s&p and holding it throughout the QE period. Fortunes have been made at, essentially, zero risk, by doing nothing else

Edited by JPJPJP

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Given I have influence over the fairness of society, or macroeconmics. I am now firmly in the camp that says it is best to play the system as it is, rather than fruitlessly try to change it.

Govopoly sets it out nicely

So yes, spotting a government manipulated market and riding the bubble would have produced a better outcome for me than spotting the same bubble and thinking (as I did) that's a bubble, it will pop so I will stay away.

Proof in the pudding for any one buying the s&p and holding it throughout the QE period. Fortunes have been made at, essentially, zero risk, by doing nothing else

so speaks a man with cash.

The property market has encouraged millions in with BORROWED MONEY...it is that leverage that has put, and is putting the masses, the banks and society itself at massive risk, as Government does all it can to keep the PONZI going...they are balloons deep in it too...so everyone with power has an in in this game...

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Moderation in all things except moderation, including leverage.

There is no need for an individual to shy away from a little leverage on some portion of their financial life

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Moderation in all things except moderation, including leverage.

There is no need for an individual to shy away from a little leverage on some portion of their financial life

most tend to disagree.

BTL

HTB

BOMAD

125%

Alphabet help for the masses.

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most tend to disagree.

BTL

HTB

BOMAD

125%

Alphabet help for the masses.

Nothing wrong with leverage, provided you define your risk. Most normal people don't have access to leverage other than through a residential mortgage. Most property speculators or home buyers don't bother defining risk, because years of government induced HPI have made it a relatively safe bet. I kind of agree with JPJPJP, that its pointless knocking your head against a brick wall and one should go with government sponsored bubbles, but London is looking incredibly unsafe to me.

When I spread bet or CFD trade, I define and accept my risk, say a 20 pip stop loss below the previous swing low or 100/200 SMA. Once you define the risk you have accepted the risk. I guess most home owners I guess only work on the pound notes they will earn if the property moves up 1-2% forgetting, bankruptcy and total wipe out with only the smallest movement the other way. A lot of BoMaD's are going to get wiped out in London methinks.

Edited by aSecureTenant

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Unbelievable.

No wonder they're happy to farm you all now, so ruthlessly.

You're up against hyperinflated prices and all you think back to is wishing you were back in the game to buy loads of houses early enough.

I wish they're has been strict rules stuck to for lending and borrowing, and limitations on BTL and investment property.

And that base rates and QE hadn't been the policy to bail out homeowners... with hpc cheerleaders inviting them to go that way with "ordinary families just wanted a home and were misled into buying as they watch too much property-porn and didn't want to waste money renting."

When i watch Dr Who on tele it may be one of things i would do when i go back in time in the tardis.

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Nothing wrong with leverage, provided you define your risk. Most normal people don't have access to leverage other than through a residential mortgage. Most property speculators or home buyers don't bother defining risk, because years of government induced HPI have made it a relatively safe bet. I kind of agree with JPJPJP, that its pointless knocking your head against a brick wall and one should go with government sponsored bubbles, but London is looking incredibly unsafe to me.

When I spread bet or CFD trade, I define and accept my risk, say a 20 pip stop loss below the previous swing low or 100/200 SMA. Once you define the risk you have accepted the risk. I guess most home owners I guess only work on the pound notes they will earn if the property moves up 1-2% forgetting, bankruptcy and total wipe out with only the smallest movement the other way. A lot of BoMaD's are going to get wiped out in London methinks.

I think you are right about most people not understanding leverage etc. I also agree with you that it could catch some people out big time. It might not, but it could.

If you buy a house for £200k with a 10% deposit and £180k debt, that is leverage. It is leverage that is only possible based on 2 things. i) the lender has first claim on any equity in the house if you default and ii) the lender can continue to pursue you for any debt remaining even after the house has been sold as per (i)

The lack of liquidity in property in comparison to spread bets makes direct comparisons difficult, but I think you would have look long and hard to find anyone that has bought a house in the UK in the last 20 years who has, or ever had, a stop loss in place. By that I mean, at what point would they sell the house for less than 'it is worth' today, clear the debt associated, crystallise the loss and be able to go on from there.

If you were to apply generally accepted sensible 'position sizing' models that are used to manage investment portfolios in shares, bonds, metals etc. to UK housing, the risk exposure of many people is, surely, ludicrously high. Anyone that has bought on a large salary multiple, with a small deposit and a variable interest rate is at considerable risk.

But, in the UK, recent history tells people that this is OK and its the only thing to do if you want to own a home - buy one as soon as you can and trade up as soon as you can, the value of houses will, over the term of your lifetime, always go up (quicker than you can save up).

The expectation of house buyers is that they will never experience negative equity and, even if they do, they will be able ride that out and that the value will increase again before the lender calls in the debt. There are examples where that hasn't happened (Japan springs to mind), but they aren't widespread enough to give the lesson to most people - especially given that "the meeja" in the UK is all about rising house prices being good.

That may indeed come to an end sometime, maybe even sometime soon. But it is easy to see why the evidence available to them does indeed encourage many people to take positions that, if it was any investable asset other than a house that was involved, would make that same person quake with fear.

Anyone who bought a London property in the mid 1980's that hasn't MEWed excessively or something similar should now be sitting on a house that is worth massively more than they paid for it.

But, unless they are downsizing, or moving out of London, or have more than one property, they will find it hard to realise that profit as ££ cash with which to do something else, because the reality of their situation is that need somewhere to live.

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But, unless they are downsizing, or moving out of London, or have more than one property, they will find it hard to realise that profit as ££ cash with which to do something else, because the reality of their situation is that need somewhere to live.

Totally agree - we have lost sight of the primary purpose of a house and a home. Its to provide shelter for your family and to provide a safe environment for your kids to grow up in.

My parents house in London is actually now 'worth' 80 times what they paid for it in the early 1970s - they actually paid less for it than my monthly salary. But the price is academic/irrelevant to them - cos its their family home - and they won't ever leave it now. The only time it becomes an issue is if they need social care.

So much for your home is your pension - why having spent 30 years in a house you own with a garden etc would you want to downsize to a flat?

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