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willing

Buy? Rent? Looking Back Over 10+ Years As An Hpc Member

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Hi guys,

It's been years since I last posted but thought my experience might help someone:

When I joined HPC (not this forum but the one that preceded it) I was a renter at the start of my professional career. I had to rent because of money, work and location. In fact when I joined this "new" look HPC in 2004 I was saving to get married, not for a house which I really thought was beyond me.

Time moved on and this forum kept me going as I had kids, saved and waited for the right home at the right price to crop up. In 2010 things finally all came together and I bought a the large family home that I had been waiting for at the right price.

In thought again about this forum the other day when some neighbour was gleefully telling me how much his house was now valued at and seemed surprised I was not as happy about it as him. You see I now worry about my kids affording property not myself, strange how life moves on!

So I guess that's really the message if I have any "Life moves on"

This forum is great for keeping you going while you save for a home (if that's want you want), but be careful of being brainwashed - life moves on out there in the real world.

When should you buy a home? Well, you will get your own home if that's your goal, but do not wait for the fanfaire of a national HPC, it's all about individual local oppertunities, so keep your eyes open and save in the meantime as they happen all the time. You won't get the first, but you will get a home - it took me 4 years of searching, so keep going.

So do I believe there will be an HPC? Well I hope so, but sadly no, we got as close as we could in 2009-12 and the powers that be made it perfectly clear that UK PLC could not afford one by moving heaven and hell to prevent a huge dip.

The most confusing thing? Why OO's still believe rising prices are a good thing. OK, for downsizers it has benefits, but for everyone else it sucks. Trying to explain this is like banging your head against a brick wall!

Oh and for anyone about to press the flame button - seriously, really? Remember, I was you 10+ years ago - will your future self agree with what you write now in 10 years time...or will you be a different person? Think before you flame - life moves on, and you're part of it whether you want to be or not. ;)

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@TMT - Man! Didn't know you still were around mate - proper oldschool reunion!

I should have bought.

Thought you did and before me too?!

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In 2004 people thought they lived in something vaguely similar to a capitalist society, and the fundamentals were clear there was a bubble that by 2007/8 was enormous.

In hindsight clearly most will have wished they bought, but did anyone who bought in this bubble really think that 0.5% interest rates, QE, FFLS, H2B 1 and 2 .... and the myriad of other scams our corrupt scum politicians would occur to bail out the financially illiterate?

Not to mention the fact that banks can now lend hundreds of billions knowing full well the government will steal from the people of the nation to bail them out.

Edited by Corruption

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In 2004 people thought they lived in something vaguely similar to a capitalist society, and the fundamentals were clear there was a bubble that by 2007/8 was enormous.

Actually, to most that I knew it wasn't clear at all - I thought there was a bubble, so did a lot of posters on here, but I certainly doubted if I was right as things just kept on going up. *Most people* (the one's in the big wide world outside HPC) didn't even think about it, they just got on with the cashing in, putting the bins out and feeding the cat for the next 3 years.

In hindsight clearly most will have wished they bought, but did anyone who bought in this bubble really think that 0.5% interest rates, QE, FFLS, H2B 1 and 2 .... and the myriad of other scams our corrupt scum politicians would occur to bail out the financially illiterate?

Nope, I certainly didn't expect it. I thought at the time that houses would continue falling and I'd lose money - but money wasn't what it was about - I just wanted to own a home for my family that I could afford. I locked into a 5 year fix that would protect me if inflation started, but in hindsight it has been expensive at 4%. That's the thing about hindsight - you never seem to have it until after the event ;)

However, if I had my time again I'd do exactly the same thing - every decision I made was made honestly, with forethought and based on my personal situation. That's the measure for life.

Bottom line: don't try and game the market if you're in it for a home, rather than profit.

Edited by willing

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I have been reading since 2004 and joined up in 2005. We were definitely right about something being seriously wrong with the property market - internationally it brought about a financial disaster. Not so much in London, but there was a drop of nearly 20% across the nation. Against my better judgement, I bought in 2005 and fortunately did not believe the dogma that the average house price will and must return to 3x the average salary.

The house price insanity has continued and has probably strengthened further since the crisis - property did better than shares. There is a massive mis-allocation of resources and a crash is the only thing that can save the UK's economy. It is probably too late now. The bubble is too big.

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The wheels will come off, it is just a matter of time. 10 years ago was the epicentre of the credit explosion, and the bubble had a fair bit to run then, but the PTB have fired all their big bullets since 2008 IMO. They are struggling to keep it afloat now. If you think of the interest you pay over the term of an average mortgage, not to mention the ridiculous asking price, then for me it is not worth it. I can`t give that much of my life to a bank for basic shelter I`m afraid.

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There is a massive mis-allocation of resources and a crash is the only thing that can save the UK's economy. It is probably too late now. The bubble is too big.

There's certainly a big job ahead - but I doubt it's all over for UK PLC. Complex systems have a habit of self correcting despite attempts to steer them (believe me I know, as steering them is my job). I don't think that means an HPC sadly, as that's the focus of every politician's/banker's attention, but some emergant property will cause an affordability correction in the system over time. So I have faith.

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There's certainly a big job ahead - but I doubt it's all over for UK PLC. Complex systems have a habit of self correcting despite attempts to steer them (believe me I know, as steering them is my job). I don't think that means an HPC sadly, as that's the focus of every politician's/banker's attention, but some emergant property will cause an affordability correction in the system over time. So I have faith.

How much would your house have to drop in value before it started to concern you?

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Good thread. I have sold 2 houses in those 10 years, the first I sold at the top of the original boom where we were (2006) as that house had almost doubled in value in the 3 years or so we had it and I grew up in the 80s housing bust so cashed in my chips when we had the chance. We then rented for a while before buying a house again in 2009 due to wanting a stable base to start our family. The house was a credit crunch repo and the bare minimum we would be happy with if everything went belly up for us work wise etc but never intended as our final family home. I actually remember floating the idea of renting that house on here rather than selling it and joining the amateur BTL's which as you can imagine went down well but instead we eventually sold that in 2011 breaking even after all the improvements and mortgage payments we made whilst living there - just!

We then rented again for just over 12 months before buying our forever home in 2012 which is in a great area, met our needs, was what we could comfortably afford and at the same price similar houses on the street sold for in 2002 / 2003. In the 2 years or so since then we have slowly improved the house whilst enjoying life and I suspect we could get around 25% pure profit if we sold it for the prices others have gone for locally however we won't be moving again and getting a house at 2002 / 2003 prices is unlikely to ever come around again IMHO.

If I'm wrong and house prices do go back to 2002 / 2003 prices from here then that will be about a 40% fall from where we are now which despite me not believing in the economic recovery smokescreen our masters want us all to believe in I just can't see happening or if if it did the UK would be such a mess I would be leaving as quickly as I could with the house keys in the post!

Edited by GeordieAndy

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Actually, to most that I knew it wasn't clear at all

Bottom line: don't try and game the market if you're in it for a home, rather than profit.

Myself and a lad who is a brickie were saying in 2002ish that prices were overvalued, its been common conversation for years. Even amongst those who those on HPC look down on.

And your advice at the bottom is ridiculous what should i do run out in the morning and buy a house as im not in it in for profit.

You come across as a smug homeowner.

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If house prices go back to 2002 / 2003 prices from here then that will be about a 40% fall from where we are now which despite me not believing in the economic recovery smokescreen our masters want us all to believe in I just can't see happening or if if it did the UK would be such a mess I would be leaving as quickly as I could

Why was England so bad for you before 2002/3?

Why didnt you clear off in 2008 when the stock market crashed by this amount?

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I should have bought.

Well, yes, certainly, in hindsight. I, for instance, could have become a minor btl emperor, but alas hindsight is only a reflection in the rear view mirror. If we are intelligent, we make our decisions based on what is infront of us, and do not waste time with regrets, as we look back see idiots find fortune based on making bad economic decisions. Inflation, sends false price signals and distorts economic thinking, rewarding the foolish, while punishing the wise.

It's like building a house on a dormant volcano, you do all the research, become an expert in volcanology (if thats even a word). Ultimately, you take the decision not to build that house, based on all your knowledge. For ten years you see people who don't understand the risks, build houses, houses that go up in value, some become Volcano BTL landlords. You feel like you missed out big time, sure, but thats only in hindsight. You know this thing is about to blow, it rumbled in a terrifying way in 2007, and the government did everything it could to mitigate the danger, so much so, that there is nothing left that can do the next time it blows.

Edited by enrieb

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Good thread. I have sold 2 houses in those 10 years, the first I sold at the top of the original boom where we were (2006) as that house had almost doubled in value in the 3 years or so we had it and I grew up in the 80s housing bust so cashed in my chips when we had the chance. We then rented for a while before buying a house again in 2009 due to wanting a stable base to start our family. The house was a credit crunch repo and the bare minimum we would be happy with if everything went belly up for us work wise etc but never intended as our final family home. I actually remember floating the idea of renting that house on here rather than selling it and joining the amateur BTL's which as you can imagine went down well but instead we eventually sold that in 2011 breaking even after all the improvements and mortgage payments we made whilst living there - just!

We then rented again for just over 12 months before buying our forever home in 2012 which is in a great area, met our needs, was what we could comfortably afford and at the same price similar houses on the street sold for in 2002 / 2003. In the 2 years or so since then we have slowly improved the house whilst enjoying life and I suspect we could get around 25% pure profit if we sold it for the prices others have gone for locally however we won't be moving again and getting a house at 2002 / 2003 prices is unlikely to ever come around again IMHO.

If I'm wrong and house prices do go back to 2002 / 2003 prices from here then that will be about a 40% fall from where we are now which despite me not believing in the economic recovery smokescreen our masters want us all to believe in I just can't see happening or if if it did the UK would be such a mess I would be leaving as quickly as I could with the house keys in the post!

The UK is already a mess, it will only start to function for the majority again when house prices are allowed to correct. Unless there are massive wage rises expect houses to go back to about 1997 prices.

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Why was England so bad for you before 2002/3?

Why didnt you clear off in 2008 when the stock market crashed by this amount?

England wasn't bad for me before 2002 / 2003 but I had not long started my proper adult working life then so bought when we had a deposit and got out again when we realised how crazy the property market was in 06. We then actually made good use of some of our house price inflation profit to help us travel the World living life not worrying about house prices in the UK but for family reasons bit the bullet on the UK property ladder again when no one else was as it was a repo at a good price etc.

The UK is already a mess, it will only start to function for the majority again when house prices are allowed to correct. Unless there are massive wage rises expect houses to go back to about 1997 prices.

I agree the UK is a mess but it's a lot better than Australia and a lot of other countries people regularly tout as being better for me and my family overall. However my main point was there will be a LOT worse off people than us if prices go back to 2002 / 2003 levels due to what we decided was worth risking on our family home when a lot on HPC were warning us not to buy in 2012 even at 2002 / 2003 prices which I suspect in hindsight most would now concede that they would be happy buying at 2002/2003 prices now?

So I guess in summary what I'm saying is that I agree with a lot of what the OP said and would add that if someone sees a house at a price they can comfortably afford (after a minimum 20% deposit), it suits you and your family / circumstances and you could cope with rates rising by 3% potentially in the next 5-10 years then go for it.

ich I genuinely think would cause so much social unrest etc we

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For me buying has never looked like a sensible move even if prices were kept in line with rents, because over the 10 bubble years Ive moved around quite a lot. I moved to take advantage of work opportunities which has meant Ive earned more than I could have by staying in one place. Ive lived in different areas of the country, in different types of property, worked in different places, met a lot of people. I can't imagine staying in one house for long, and I certainly couldnt bear the thought of feeling trapped in the same workplace for too long.

Ive done the sums and if I had of bought I wouldn't be much better off. Certainly not by an amount that would have been worth the sacrifice of those experiences. No regrets.

Edited by cybernoid

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However my main point was there will be a LOT worse off people than us if prices go back to 2002 / 2003 levels due to what we decided was worth risking on our family home when a lot on HPC were warning us not to buy in 2012 even at 2002 / 2003 prices which I suspect in hindsight most would now concede that they would be happy buying at 2002/2003 prices now?

So I guess in summary what I'm saying is that I agree with a lot of what the OP said and would add that if someone sees a house at a price they can comfortably afford (after a minimum 20% deposit), it suits you and your family / circumstances and you could cope with rates rising by 3% potentially in the next 5-10 years then go for it.

ich I genuinely think would cause so much social unrest etc we

I'm not sure of the point you're making here.

A lot of younger priced out, with housing priced at bat-sh1t mental values, are suffering without kicking up a fuss. Why would I want to pay a lot more than I should for a house, because some owners can't handle falls back to 2001 values?

Go for it? No. Get crashed.

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England wasn't bad for me before 2002 / 2003 but I had not long started my proper adult working life then so bought when we had a deposit and got out again when we realised how crazy the property market was in 06. We then actually made good use of some of our house price inflation profit to help us travel the World living life not worrying about house prices in the UK but for family reasons bit the bullet on the UK property ladder again when no one else was as it was a repo at a good price etc.

I agree the UK is a mess but it's a lot better than Australia and a lot of other countries people regularly tout as being better for me and my family overall. However my main point was there will be a LOT worse off people than us if prices go back to 2002 / 2003 levels due to what we decided was worth risking on our family home when a lot on HPC were warning us not to buy in 2012 even at 2002 / 2003 prices which I suspect in hindsight most would now concede that they would be happy buying at 2002/2003 prices now?

So I guess in summary what I'm saying is that I agree with a lot of what the OP said and would add that if someone sees a house at a price they can comfortably afford (after a minimum 20% deposit), it suits you and your family / circumstances and you could cope with rates rising by 3% potentially in the next 5-10 years then go for it.

ich I genuinely think would cause so much social unrest etc we

Haven`t been in Australia for 19 years, but my relatives out there think they have a much better lifestyle than most people in the UK, they have been born out there for the most part and are not recent immigrants, maybe that colours their perception a bit, I don`t know. I don`t buy the social unrest bit, the people who will have to adjust their expectations are old (ish), and those who have over borrowed are too brainwashed to know anything other than running on the twin Hamster wheels of "career" and "mortgage", they will just suck up their losses when the crash comes and adjust their lifestyle downwards.

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The world won't end if prices fall to 2000 levels, only a third of households have mortgages and unless they've 'released equity' only those that bought in the last 10 years or so *might* be underwater… and so what if they are?

The vast majority would benefit.

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I'm not sure of the point you're making here.

A lot of younger priced out, with housing priced at bat-sh1t mental values, are suffering without kicking up a fuss. Why would I want to pay a lot more than I should for a house, because some owners can't handle falls back to 2001 values?

Go for it? No. Get crashed.

:P:P

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Might be wrong but I don't think anyone that bought in NI would be making a similar OP.

People have quickly forgotten the panic that swept the country when queues appeared outside banks.

Moving forward, the best protection against economic uncertainty isn't buying a house but ensuring your skillset and abilities allow you to earn money, with little or no re-training, across the broadest set of circumstances. Owning a house is no good if you can't put a table in it let alone food on it.

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