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Brian Potter

Why Do You Want A Crash?

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Just wondered what drives forum users to hope for a crash?

There must be many reasons.

We bought our second house in 2002 - all seemed lovely. Its increased by 70% and is in a great area. Problem is our neighbours are totally inconsiderate b*stards. Slamming doors at all hours of day and night plus drilling at 7.30 am sunday mornings etc. etc. Upon confrontation neighbour threatened to put his fist down my throat. (hey ho, he is a police officer after all).

Anyhow, I digress.

We have vastly increased our financial position cash wise and would like to move up but frankly the thought of the falls and a ridiculas mortgage scares us. There must be many in a similar position who want to move up but daren't.

A question: what do people think about letting out their own house in order to rent a larger property. I seems pretty logical given the current climate. I read an article about it in the times. Be interesting to see what people think.

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A question: what do people think about letting out their own house in order to rent a larger property. I seems pretty logical given the current climate. I read an article about it in the times. Be interesting to see what people think.

Sounds like a great idea. I'd do exactly the same in your situation.

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Perhaps so ordinary first time buyers/young people on average salaries can afford to buy a home of their own.

How about that as a good reason to hope for a crash!

PS Seeing some greedy buy to letters brought to their knees will just add entertainment value.

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Perhaps so ordinary first time buyers/young people on average salaries can afford to buy a home of their own.

How about that as a good reason to hope for a crash!

PS Seeing some greedy buy to letters brought to their knees will just add entertainment value.

totally agree. as a parent I worry what my daughter will be able to afford in years to come. I really dont know how average people cope with these prices. Whilst we all have our own issues, I have every simpathy with the first time buyer. I bought my first house in 95 at the bottom of the cycle (fluke), but on todays prices I would have had no chance.

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'Let to Rent' We've considered that ourselves and may be forced to do in the next two years.

Whats in it for me? Bigger house for less money. Simply can't afford a big enough house anywhere, let alone the area we'd like to move back to. Badly need to upgrade and relocate.

Bigger house with a bigger kitchen and a bigger garden, a bigger drive with bigger cars, a bigger bathroom with a bigger bath. The usual really.

Also hoping the crash might bring a glut 5 door saloons for less than a grand ;) and maybe a widescreen tele for a ton.

In short, I want a higher standard of living without resorting to credit cards, mew, or lying about my income.

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A question: what do people think about letting out their own house in order to rent a larger property. I seems pretty logical given the current climate. I read an article about it in the times. Be interesting to see what people think.

Seems reasonable. Our landlords do just that. We're in a 5-bed terraced townhouse, in a nice street, but with woeful schools (N4). Hence they moved.

They've moved to Highgate, with better schools, but cannot afford to buy there. We're paying their mortgage here, while they pay someone else's. We're happy in this house - they're happy in theirs.

Everyone is happy, and no one is losing money. Sort of.

As for the "why do we want a crash", essentially so prices become affordable. And if there's a recession, well boo hoo. That's life under capitalism. And yes, I do expect I'll lose my job. I don't have any debt though, so not that fussed. But if I don't then, I can afford to live somewhere under my own roof and within my means.

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Just wondered what drives forum users to hope for a crash?

There must be many reasons.

We bought our second house in 2002 - all seemed lovely. Its increased by 70% and is in a great area. Problem is our neighbours are totally inconsiderate b*stards. Slamming doors at all hours of day and night plus drilling at 7.30 am sunday mornings etc. etc. Upon confrontation neighbour threatened to put his fist down my throat. (hey ho, he is a police officer after all).

Anyhow, I digress.

We have vastly increased our financial position cash wise and would like to move up but frankly the thought of the falls and a ridiculas mortgage scares us. There must be many in a similar position who want to move up but daren't.

A question: what do people think about letting out their own house in order to rent a larger property. I seems pretty logical given the current climate. I read an article about it in the times. Be interesting to see what people think.

Perhaps there is a far more fundamental reason for wanting a house price crash and rather more altruistic.

If an economy relies for its strength not on its innovation application competitiveness and skills but instead derives a vast amount of its notional "wealth" from individuals paying each other larger and larger amounts for items of marginal utility such as domestic housing that economy is built as if of straw. There is no effective reason to continue to invest in something when to rent it would cost you considerably less. As that gap widens the market becomes more and more overstretched, debt increases etc etc - there is no actual benefit to the economy except to increase the Chancellors tax take.

As I have posted before as the average house price rises beyond the IHT threshold and as personal income tax levels fail to keep pace with an overheating housing market - the only person who ultimately benefits is Gordon Brown or the incumbent Chancellor.

There are short-term beneficiaries to a housing boom but remember a profit is not a profit until you take it - so if you don't sell now and then you see the new home of your dreams in 2 years time at an affordable price then presumably your own rental property will also have fallen. Personally I would try to sell my existing property not least because I have PPR tax relief at this stage rent a larger house and then prepare to pounce.

If you are scared of falls then surely you should sell and if you are scared of a big mortgage bank your profit await the fall and then borrow less. Or are you holding on to this other place because you are keeping a foot in both camps? Also could work on the assumption that both a 300k house and its 600k big brother could lose 30% then you are still 90k "better off".

The Fox

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What's in it for me?:

1.My 3 kids will be able to buy a house without crippling themselves

2. The satisfaction of being proven and acknowledged as having correctly predicted the crash again (just like I did in 1990)

3. Silencing all the smug batsards who always tell me how much money they've made in property.

Not much to ask is it?

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FOXYTRADER - WHAT A LOSER!!!

MY MUM'S HOUSE HAS MADE 300K OVER THE PAST 15 YEARS!!!!!!!!

OF COURSE IT'S GOOD FOR THE ECONOMY! IT'S LIKE A FECKING GOLDMINE!

BUY PROPERTY NOW BEFORE IT'S TOO LATE!!!!!!!

etc etc ad nauseam until the market falls flat on its face, flats get repossessed, made bunkrupt...

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So, to sum up.

It's a mess, a total and utter shambles.

What we, somewhat older, thought made an economy is now out of the window.

Only we, the majority here, can analyse and see that this situation cannot continue ad infinitum.

The fallout and, to my mind, the future, is very bleak.

All imo, and maybe an asset merry go round is the future.

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See this is the problem. Due to the over pricing of the current market thanks to the greedy Estate Agents we find that not only are FTBs unable to buy property but also PPL who are already on the ladder are struggling to move up it to the next step. The EAs have "check mated" the whole system and at current we're all stuck where we are. We don't outrightly want a "crash" just for some sort of normality to return to the Propery Ladder and get value for money once more rather than having to go 50/50 with a friend/stranger/bank/government/chris tarrant etc etc etc.

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Just wondered what drives forum users to hope for a crash?

We have vastly increased our financial position cash wise and would like to move up but frankly the thought of the falls and a ridiculas mortgage scares us. There must be many in a similar position who want to move up but daren't.

I think you have answered your own question as to why some people might hope for a crash.

It may seem counter intuitive but you have just said that despite the fact that you have made a lot of money from the house price boom you cannot move up or dare not do so. Many others are in the same position, the next rung of the property ladder is still too high, which means that some people have been trapped in first time buyer properties when they need more space.

As a would be first time buyer I would like to see the amateur speculators move out of the market and those who would like to trade up given the opportunity to do so, so that I can move onto the first rung of the property ladder.

A crash quite simply means a return to affordability, a return to mortgages which can accept a small change in circumstances (at least) and that is a good thing for most people and a good thing for the economy overall.

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Just wondered what drives forum users to hope for a crash?

There must be many reasons.

We bought our second house in 2002 - all seemed lovely. Its increased by 70% and is in a great area. Problem is our neighbours are totally inconsiderate b*stards. Slamming doors at all hours of day and night plus drilling at 7.30 am sunday mornings etc. etc. Upon confrontation neighbour threatened to put his fist down my throat. (hey ho, he is a police officer after all).

Anyhow, I digress.

We have vastly increased our financial position cash wise and would like to move up but frankly the thought of the falls and a ridiculas mortgage scares us. There must be many in a similar position who want to move up but daren't.

A question: what do people think about letting out their own house in order to rent a larger property. I seems pretty logical given the current climate. I read an article about it in the times. Be interesting to see what people think.

Not everyone here wants a crash.

Anyway, it doesn't matter what people want, the crash is coming.

What are you going to do when it happens? How do you profit from it (when do you buy? After a drop of 10%, 15%....)?

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If you have a small house decide not to sell and move up but decide instead to rent out and rent yourself, this is simply a neutral position in terms of risk management.

Or a hedging of bets erring on the side of caution.

You start with a house, meaning you are long the market. People buy any asset (in market terms, ignoring consumption) when they expect the value to go up. The longer they are (the more they have invested) the more they expect it to go up.

If you were a total bear then you sell, or become short. That means you benefit if the price falls because you can buy the same thing back for less money.

The 'rent out your own and rent a bigger property' method is because you don't want to risk investing more, but neither do you want the risk of selling your house and it subsequently going up in value which would hurt you.

It seems sensible to you because you aren't sure of a crash, just fear one.

If you were sure/more confident of a crash then you would sell as this is the most rational action before a bear market.

We can discount the issue putting off most STR's, that of hassle, because you are already considering the hassle of moving anyway.

THis action will have a similar but smaller effect to STR because the demand for housing will fall but to a less er extent. This is because as a natural market player ready for a larger house you are not participating in terms of full ownership.

So I will revise my view of your position to be neutral-to-slightly bearish!

If you were sure of a continued boom, you would do your best to buy the max you can, this would be the most rational action in a bull market.

I work in risk management and many people don't even understand their own position or prefered view fully.

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If you have a small house decide not to sell and move up but decide instead to rent out and rent yourself, this is simply a neutral position in terms of risk management.

Or a hedging of bets erring on the side of caution.

You start with a house, meaning you are long the market. People buy any asset (in market terms, ignoring consumption) when they expect the value to go up. The longer they are (the more they have invested) the more they expect it to go up.

If you were a total bear then you sell, or become short. That means you benefit if the price falls because you can buy the same thing back for less money.

The 'rent out your own and rent a bigger property' method is because you don't want to risk investing more, but neither do you want the risk of selling your house and it subsequently going up in value which would hurt you.

It seems sensible to you because you aren't sure of a crash, just fear one.

If you were sure/more confident of a crash then you would sell as this is the most rational action before a bear market.

We can discount the issue putting off most STR's, that of hassle, because you are already considering the hassle of moving anyway.

THis action will have a similar but smaller effect to STR because the demand for housing will fall but to a less er extent. This is because as a natural market player ready for a larger house you are not participating in terms of full ownership.

So I will revise my view of your position to be neutral-to-slightly bearish!

If you were sure of a continued boom, you would do your best to buy the max you can, this would be the most rational action in a bull market.

I work in risk management and many people don't even understand their own position or prefered view fully.

Correct, but also...

If you anticipate prices to remain flat, renting a bigger house make sense since the yield (rent) for larger properties is much smaller.

As an example, in Surrey you could easily rent something valued at 650K for 2200 pcm (yield of 4.1%) but it seems that anything valued around 400K is rented for more than 1370 pcm.

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Quite simply, pure, evil unashamed greed.

And the knowledge that I am right, and the masses, as per usual are wrong. I never have followed the crowd and never will. You end up walking over cliffs if you follow crowds. B)

The fundamentals are all half-**** for both the UK economy and the housing market, i believe. So why buy a 2 bed-maisonnette now when I can rent for 300 quid a month and afford my 4 bed dream cottage in 3 years?

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Not everyone here wants a crash.

Anyway, it doesn't matter what people want, the crash is coming.

What are you going to do when it happens? How do you profit from it (when do you buy? After a drop of 10%, 15%....)?

Hi,

No future for the kids as things stand. Wishing things will not change the outcome, anyway now, the market has gone beyond sentiment a long time ago now, it's hard, cold, economic reality pulling the market down now. The longer it stagnates, the longer the damage, the worse the fallout for the wider economy.

Anyway, BoE and Gordon don't think that house prices control the economy as much as they use to if you read the work BoE did a couple of years ago on the subject and if you read between the lines of his previous IMF and OECD addresses. Maybe he has got things in place for an orderly fall in prices without completely scuppering the rest of the economy. It's all been posted here before. Maybe he is right, maybe he can pull off a fall in house prices without trashing the economy, maybe that's why SIPPS doesn't really bother him much, lets see. I think the debt levels make it difficult mind, it's almost nailed down somekind of large scale retraction of credit. Not if you listen to old Henk Potts though, the tabloid economist. He was at it again this morning on the radio, saying inerest rate falls are nailed on for next year, going to 'reignite' house prices next year (his words). I think any FTB's who buy on his advice should be given his home address sometime down the line. Anyway, I digress.

It's like the cycles of nature, the cycles of the housing market. Like the summer forest fires that clear the spruce, revitalise the soil and allow new life to grow, the forest to renew and regenrate itself into a stonger forest. It's all natural, it's all for the good.

Boomer

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Just wondered what drives forum users to hope for a crash?

Q1. somewhere to live.

A question: what do people think about letting out their own house in order to rent a larger property. I seems pretty logical given the current climate. I read an article about it in the times. Be interesting to see what people think.

Q2. great idea... only it ain't mine (and thats not an STR situation)

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We have vastly increased our financial position cash wise and would like to move up but frankly the thought of the falls and a ridiculas mortgage scares us. There must be many in a similar position who want to move up but daren't.

No you haven't. You have fallen for the warped logic of the vested interests. How exactly has the fact that house prices have increased by 70% improved your financial position?

You give the answer yourself. It has not. It has made it worse. Because you would like to trade up to a bigger property, and high house prices increase the gap between the rungs of the property ladder making it more difficult for ordinary owner occupiers to move to a bigger house.

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No you haven't. You have fallen for the warped logic of the vested interests. How exactly has the fact that house prices have increased by 70% improved your financial position?

You give the answer yourself. It has not. It has made it worse. Because you would like to trade up to a bigger property, and high house prices increase the gap between the rungs of the property ladder making it more difficult for ordinary owner occupiers to move to a bigger house.

No I have not.

Read my later post - My assets are purely cash. Not MEW cash but pure savings.

Therefore, I haven't fallen for any warped logic. I never cash in on my property to line my pockets.

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No I have not.

Read my later post - My assets are purely cash. Not MEW cash but pure savings.

Therefore, I haven't fallen for any warped logic. I never cash in on my property to line my pockets.

What Bubble Pricker is saying, is lets assume the house you bought was 100K three years ago, and the house you would now like to buy was then 200K. And lets assume that HPI puts on +70% in those three years. Your house is now worth 170K the 200K house is now worth 340K. So three years ago if you had opted to finance the 200k house instead of the 100K House you were looking to fund an extra 100K, but now three years down the road 340K-170K= 170K extra funding required.

You think your better of, but in reality you have to service a bigger debt..what is it on a 25 years mortgage...did I see some one say it was a 1.8 multipule, borrow 70Kx 1.80 = 126K paided back over the term of the mortgage.

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Just wondered what drives forum users to hope for a crash?

There must be many reasons.

We bought our second house in 2002 - all seemed lovely. Its increased by 70% and is in a great area. Problem is our neighbours are totally inconsiderate b*stards. Slamming doors at all hours of day and night plus drilling at 7.30 am sunday mornings etc. etc. Upon confrontation neighbour threatened to put his fist down my throat. (hey ho, he is a police officer after all).

Anyhow, I digress.

We have vastly increased our financial position cash wise and would like to move up but frankly the thought of the falls and a ridiculas mortgage scares us. There must be many in a similar position who want to move up but daren't.

A question: what do people think about letting out their own house in order to rent a larger property. I seems pretty logical given the current climate. I read an article about it in the times. Be interesting to see what people think.

I don't "want" a HPC, I believe we will have one, and when it comes a lot of "regular folks" will be hurt, even some who don't own a home. People will loose their jobs etc. housing has to be affordable to "regular folks"

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  • 339 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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