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Andy*

After The Crash Will You Try To Profit From The Next Bubble?

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Hi All,

I'm a long time lurker on the forum, but this is my first post.

Hello :)

I can see a crash coming ever closer...

We currently rent (me, wife and 3 kids)... Over the last couple of years I've been trying to sort our finances so that when the next price crash happens we can buy a family home to live in.

However... I can't help thinking that if another bubble starts in years to come that naturally I would try to profit from it - after seeing what's happened this time round.

Does anyone feel the same?

Andy :)

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I honestly have to say I'd struggle not to - a classic case of the abused becomes the abuser.

I doubt I'd ever become pro-HPI, but if a bubble forms it would tricky stopping myself from trying to profit from it.

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Hi All,

I'm a long time lurker on the forum, but this is my first post.

Hello :)

I can see a crash coming ever closer...

We currently rent (me, wife and 3 kids)... Over the last couple of years I've been trying to sort our finances so that when the next price crash happens we can buy a family home to live in.

However... I can't help thinking that if another bubble starts in years to come that naturally I would try to profit from it - after seeing what's happened this time round.

Does anyone feel the same?

Andy :)

I think it's like shares its about timing and if there is going to be a crash, personally I don't see it more a slow deflation. Because of the volatility of stocks and low interest rates houses have become a store of value.

So if you try to play it whose to say the rebound will be the same as traditional booms ? when it is has been artificially created in the first place.

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We'd like an extra bedroom, but only need one house to live in and so will only own one house.

Despite the volatility of stocks and shares I like the liquidity, and also the fact that no one 'phones me at 4am to tell me they've blocked the toilet expecting me to sort it out.......

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There wont be a next bubble for a long time.

and a crash.........in the UK

The crash happened quick 2007 -2010 there were bargains to be had. Looking back on it it was a bit like how HFT can move the markets quickly.

There will be a softening which will be a good thing, perhaps BTL will be obliterated which would be good.

Edited by Greg Bowman

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The crash happened quick 2007 -2010 there were bargains to be had. Looking back on it it was a bit like how HFT can move the markets quickly.

Were there ?

I never seen any. I just saw greedy old people hanging out for their 2007 price + 10% per year on top.

Even with this greed the land registry away from the S.E. shows prices still below the 2007 bubble prices, so I guess these are still bargains ?

Despite no pay rises, higher cost of living, insane governmental bubble/pyramid support ?

I have to ask,. not what planet you are on but what galaxy are you in ?

Edited by TheCountOfNowhere

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No. I'm in a good position to buy to let now, despite all the obvious disadvantages. I have free accommodation through my job in a boarding school, and could buy a decent house for cash, albeit further north. Almost all my colleagues seem to have at least one place they rent out (or some have a holiday home), and a few are up to their necks in BtL. Sensible in a way, to have somewhere secured ready for retirement, and I'm constantly urged to do so. But I can't bring myself to be a landlord, and if I make money I want it to be off my own back, or through genuine investment, not by monopolising something essential and using it to capture a huge chunk of someone else's wages.

If I think they're good value after the inevitable crash, I'll probably buy, but I'll then rent it out to a family I consider to be 'deserving poor' in exchange for simply covering bills and keeping it in good order.

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and a crash.........in the UK

The crash happened quick 2007 -2010 there were bargains to be had. Looking back on it it was a bit like how HFT can move the markets quickly.

There will be a softening which will be a good thing, perhaps BTL will be obliterated which would be good.

FLS stopped the the correction dead in it`s tracks ,HTB then took the market back to where it was (mostly sentiment driven via media ramping) the market is trading at all time lows concerning volumes around my way but i am seeing the bottom end of the market weakening

I think around my way the crash .2 might have already started ,i could be wrong as it`s mostly BTL offloading ATMIT

As for the OP`s question i could see a bit of flipping if the circumstances looked favourable but as for BTL not a chance, i could do that now if i was that way inclined, 20 miles up the road from me yields looks doable but the hassle is something i could do without and the question i ask myself is why are they bailing ,the only answer i come up with is they realise there bet on HPI is not going to happen and the principle of the IO mortgage is never going to be payed back as they have been spending the profit from the last ten years on i pads and holidays

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It must have happened so quick that I didn't actually see it.

Not much happened in the SE, prices were down by 10-20% but as there were so few forced sellers, sellers just sat and waited!

To the OP, I say. Everyone will always try and jump in on any bubble. Just look at the recent short term bubbles in PM and bitcoins. After the next HPC I suspect that no-one will want to own a house as we will again be living in a new normal where house prices are cheap, yields to rent are ridiculously cheap and prices don't move upward for years, AKA Japan. Plus everyone will be more interested other bubbles in other things where they think they can make a quick buck!

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2012 was a good time to buy bought a bungalow (probate) needing work that was up for 280k for £235k, now worth £330 spent £25k on it, bought a 2 bed bungalow in 2012 up for 125k bought it for 114K they snapped my hand off worth £145K (at present!),although not interested in retail prices as these are 40 year keepers,didnt trust the banks,was earning 6.5% on my money and was happy renting a modest house,I STR in 2007 as I had witnessed the last crash,I was making more by renting a cottage with my money in the bank then BOOM interest rates bottomed so I bought, 2013 could not get a look in,2015 seeing reductions,Im 46,and got in early (1991) it appears the Govts just want to peddle debt on the young trying to buy,Ive got a 4 and 8 yr old, hopefully this mess will get sorted by the time they want to leave the nest, hopefully they will want to go to NZ and take their Dad!

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Were there ?

I never seen any. I just saw greedy old people hanging out for their 2007 price + 10% per year on top.

Even with this greed the land registry away from the S.E. shows prices still below the 2007 bubble prices, so I guess these are still bargains ?

Despite no pay rises, higher cost of living, insane governmental bubble/pyramid support ?

I have to ask,. not what planet you are on but what galaxy are you in ?

The galaxy out of woe betide me of HPC. Who hasn't had a pay rise my people have ? Higher cost of living ? got rid of Sky, Petrol gone right down and cars more economical than ever. Cheap to lease we have just put one of our young sales guys in a Merc (21) at £270 a month because it was a run out model, cheaper than 15 years ago. But then he again he joined us from the Microsoft apprentice ship scheme which has worked well.

My last House sold at peak in 2007 rented to late 2009 early 2010 and brought a house for £140,000 less than the guy paid for it in May 2007.

I am not unusual and I am not a banker or trustafarian, I have lots of close friends in Manchester and their experience mirrors mine as do some of my Scottish family so not a all Londoners are lucky B***** sort of thing either

I like my Galaxy - yours seems a little well miserable

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No.

To be honest I would if I thought I could make it work, but the market is too manipulated and the cycle between peaks and troughs too long - even without the manipulation - to make dealing in big illiquid assets like houses for profit attractive to me. I'd also probably fall for either the bull trap, bear trap, or both (as I have before with other investments:))

Saying that, I would take advantage of a proper "trough" if I perceived there to be one to move to a bigger house in a better area if I could afford to do so. But that's not seeking to benefit from a bubble, just buying the best house I can reasonably afford at any point in time to live in until I croak.

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Amen to that,although I recon the winter will get you before the bears,NZ looks the best ! WTF is poutine?

LOL - you are probably right about the winter. I worry about getting an infestation of hobbits in NZ.

Poutine is delicious -- it's basically chips, soft cheese and gravy.

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The galaxy out of woe betide me of HPC. Who hasn't had a pay rise my people have ? Higher cost of living ? got rid of Sky, Petrol gone right down and cars more economical than ever. Cheap to lease we have just put one of our young sales guys in a Merc (21) at £270 a month because it was a run out model, cheaper than 15 years ago. But then he again he joined us from the Microsoft apprentice ship scheme which has worked well.

My last House sold at peak in 2007 rented to late 2009 early 2010 and brought a house for £140,000 less than the guy paid for it in May 2007.

I am not unusual and I am not a banker or trustafarian, I have lots of close friends in Manchester and their experience mirrors mine as do some of my Scottish family so not a all Londoners are lucky B***** sort of thing either

I like my Galaxy - yours seems a little well miserable

Sounds like you timed the market almost perfect! What made you sell in 2007? Can you tell me when you sell again, so I can time the market with you?

If I was living in almost any other part of the country on the same salary I currently am, I would have bought something. But I live and work in London and around here the correction lasted for about a Tuesday afternoon! I exaggerate, of course. I was looking for a place back in 2010-11 but had to look further afield from where I live. The closest places I looked were places like Collier Row, Harold Hill, Dagenham and Hainault, basically dumps, sorry up-and-coming areas, were the only places I could dream of buying. And what did I find, I would have to borrow to the max, in a ridiculously low interest rate environment, to be able to buy fairly basic house. I started to look even further afield, places like Harlow or Basildon (more dumps, although I believe that there is a nice road somewhere in Basildon but the houses are double the average price on it :P). These places, although affordable, would have increased my commute times to what I considered an unreasonable level and my wife would have had to quit her job as the public transport in these places is either too expensive or non-existent.

Anyway, I started to realise that this was all the correction we were going to get on this cycle (once HTB was announced and on seeing the early effects of it, that was wake up time for me. Before that I thought there could be a long decline) and I couldn't help to think how ridiculous the trickle-down and HPI Ad infinitum argument was. How far do people have to move, how long do people have to commute? Something would had give sooner or later. Did I really want to take on the huge debt, that there are no guarantees of me paying back, to buy a house in a location I didn't want to live. I then stopped looking and got on with my life in rented accommodation, although if London rents are going to get pushed up much more, I may have to look at renting in one of the dump I previously mentioned. Haha Funny, maybe you are always better off buying anywhere for any price that you can afford! Long term renting is for losers! (so I am told, over and over and..)

Everything is looking rosy again and we are in the boom phase of the business cycle, although they keep calling it a recovery? I've had some wage rises, last year as much as 2%. Food prices go down a bit and then up again, I notice that the packs keep getting smaller! I got rid of my car, didn't use enough to justify having it and I pay a premium to live in London so I may as well take advantage of the reasonably good public transport system! Obviously, I was a fool for not timing the market and I live in the miserable Galaxy you refer to! However something about ZIRP, HTB, fending for lending doesn't sit right with me and I don't really see how these prices can be justified even if people are finding the funds to buy them from somewhere.

One good thing though, I don't think about buying now! Isn't really an option for me, unless I move out as far as somewhere like Braintree which I really can't be bothered with, imagine the commute! :P

Edited by renting til I die

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The galaxy out of woe betide me of HPC. Who hasn't had a pay rise my people have ? Higher cost of living ? got rid of Sky, Petrol gone right down and cars more economical than ever. Cheap to lease we have just put one of our young sales guys in a Merc (21) at £270 a month because it was a run out model, cheaper than 15 years ago. But then he again he joined us from the Microsoft apprentice ship scheme which has worked well.

My last House sold at peak in 2007 rented to late 2009 early 2010 and brought a house for £140,000 less than the guy paid for it in May 2007.

I am not unusual and I am not a banker or trustafarian, I have lots of close friends in Manchester and their experience mirrors mine as do some of my Scottish family so not a all Londoners are lucky B***** sort of thing either

I like my Galaxy - yours seems a little well miserable

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Were there ?

I never seen any. I just saw greedy old people hanging out for their 2007 price + 10% per year on top.

Even with this greed the land registry away from the S.E. shows prices still below the 2007 bubble prices, so I guess these are still bargains ?

Despite no pay rises, higher cost of living, insane governmental bubble/pyramid support ?

I have to ask,. not what planet you are on but what galaxy are you in ?

Yes there definitely were. Even in London - parts of the east sank back to circa 2005 (and still very high) prices until Olympic mania took off around 2010. And in some parts outside of London/SE, the bubble never really inflated again. I paid 2003 prices for my place in 2012 - although it took a while to find a sufficiently motivated seller.

Those in London/SE will get their chance again.

Edited by StainlessSteelCat

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Yes there definitely were. Even in London - parts of the east sank back to circa 2005 (and still very high) prices until Olympic mania took off around 2010. And in some parts outside of London/SE, the bubble never really inflated again. I paid 2003 prices for my place in 2012 - although it took a while to find a sufficiently motivated seller.

Those in London/SE will get their chance again.

The problem is, will we notice these bargains or just get stuck in the mindset that they all still cost too much!

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The problem is, will we notice these bargains or just get stuck in the mindset that they all still cost too much!

This is why I asked on the 2008.2 thread what plans people had for buying after a crash. What level of falls is good enough to entice you to buy? Phrased in a better way, what would the price/mortgage payments on a place you're interested in have to be?

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