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CrashIsUnderWay

No Such Thing As 'free Money'

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just thought I'd remind everyone that

there is no such thing as free money

anyone who says house prices can never crash is not only ignoring the oh-so-familiar lessons of history, but also arguing with that fact.

This has been an incredible year - from 20% plus inflation to near zero at best, -4.7% at worst, it really has gone faster and harder than any of us really should have expected. The original set of bullcrappers have rolled over and died, to be replaced by a new set of substandard types who can do nothing but bleat mantras about 'wasted money renting' or 'boat missing' or 'look, it's bottomed'...

Another 10% down next year and a realization among the general public that they are fooked wouldn't surprise me in the least.

And also in 2006 - record numbers of repos as sad numpty jonny come loser-lately BTLs give up the ghost and bail, amid the chaos of newbuild flat companies dumping stock at any price they can get and agressively driving the market down in order to just survive.

It's downhill from here folks, see y'all at the bottom!

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CIUW

spot on mate the bull run has shot its last load, housing markets are all about sentiment it's just a matter of time. I suspect it could be a drawn out affair, but least ways if people can see it's happening it will nodoubt cheer them up.

Builders will as always lead the way down, they make their profits from building and selling houses, not from sitting on sites full of overvalued properties dropping in value by the day.

Edited by Catch22

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too true, 22.

Seen it all before. This time, I'm gonna sit out the mess - come back in a bit when the dust has settled, and the blame-throwers have run out of fuel...

Life goes on, of course. The main effect will actually be to rudely awaken a fairly large section of people who thought they 'had it made' and could 'retire rich soon'. They will unfortunately have the rather unpleasant experience of finding out how having an 'asset' turn into a 'liability' can eat up YEARS of your life.

2010 before things are back to where they were in 2005 (HP-wise)

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last year was tough, but i think the back of this housing bull has been broken.

possibly the ememy will break and run in 2006. i cant see them standing past 2007.

they claim its a stand off, but it isnt. we have no choice. they have to financially die for their folly and greed.

let the games commence !!!!

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Eighteen months ago the house I lived in had a PhD German economist over for three months on a visiting fellowship. He said that until he came here, he'd been one of many Germans in awe, almost, of the success of the British economy. Then he lived here for a few months...and reckoned, pretty much, that the whole thing is a delusion, a pack of cards built on debt. My landlady's son wanted to MEW more equity out of her house to "buy" a second BTL (they'd already bought one this way), and my German friend was trying, fairly gently, to point out that what's too good to be true generally is. Son wouldn't have it - property only ever goes up, market will be stable for a couple of years then keep going ever upwards.

My German went home, rents a decent flat for the cost of a room in a shared house where I live, if not disillusioned at least somewhat less illusioned about the UK economy. There is no such thing as free money, as eventually we're going to have to learn.

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housing markets are all about sentiment

No they are not, they are about affordability.

Sentiment only seems to have an effect when prices drop to rock bottom, interest rates become affordable again and yet nobody can see a bargain even if it was place on the end of their nose.

Post last recession houses were being sold for less than cost of building and the excluded the land costs. Clearly they were bargains but sentiment ensured that people could not see it. When they did finally wake up to it, they bought like mad, hence todays fiasco.

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just thought I'd remind everyone that

there is no such thing as free money

I do hope that prices fall, but statements like 'there's no such thing as free money' are confusing to me. Are you saying things can't rise in price, purely due to market conditions e.g. lack of supply, high demand etc.?

Edited by Londoner

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I do hope that prices fall, but statements like 'there's no such thing as free money' are confusing to me. Are you saying things can't rise in price, purely due to market conditions e.g. lack of supply, high demand etc.?

House prices still rising where I am My house has gone up by 90k this year and streets full of sold boards

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House prices still rising where I am My house has gone up by 90k this year and streets full of sold boards

You could be a troll, a desperate OO maxed out on an IO mortgage, or MEWed to the hilt on your so called new found wealth. Post and run do you ? Must say love your name Noddy :D

Edited by fedupwaiting

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Guest pioneer31

No they are not, they are about affordability.

and affordability is just about the lowest ever

case closed

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No they are not, they are about affordability.

Sentiment only seems to have an effect when prices drop to rock bottom, interest rates become affordable again and yet nobody can see a bargain even if it was place on the end of their nose.

Some people thought they were getting a bargain when they bought dotcom shares 50% reduced from their peak, they were affordable, especially if you never required your money back.

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I think affordability is relative only to your own personal circumstances.

Lets be honest here, there are people who are earning a lot of money in public service that would have commanded minor salaries a few years ago. Its all part of the Blair wealth re-distribution programme.

Many Councils now have staff who average over 60K, unheard of under the Tories. Maybe they deserve the pay for being in charge of three dustbin men as I can imagine its considered a highly skilled job these days especially when you consider that children leaving school with five GCSE's in media and sports are considered high achievers, La Creme de la Creme. In my day the post would have been filled by an elderly dustbin man who had done his time on the streets and was happy to come in out of the cold for roughly the same money. Still thats progress!!!.

I went to a drinks party the other night at a house owned by a single parent who works for a council teaching drugs awareness to teachers, and magistrates. New House cost 650K now you have to earn some dosh to finance that one!!!.

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Dont forget that affordability has been redefined in the last 5 years.

When I bought my first houses, affordability included both the ability to repay interest, and the principal of a loan.

Today its defined only in terms of the ability to repay interest.

There are some good "angels on a pinhead" economic arguments to justify this shift, but in my guts I feel it is wrong.

On this older definition, affordability is very poor right now.

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You could be a troll, a desperate OO maxed out on an IO mortgage, or MEWed to the hilt on your so called new found wealth. Post and run do you ? Must say love your name Noddy :D

No I am not a troll have a repayment mortgage but not sure what an OO is?New you see I don't post and run at all I have other things to do!I can honestly say lots of friends have bought and sold this year and apart from a couple who took a while to shift all were profitable quick sales

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Guest Charlie The Tramp
We bought our house last year for 202000 and having spent just 10k on it it is now worth 310000 in about 14 months All houses in our street around that price have sold within 2-3 months and so we are cashing in and downsizing I am in Brighton BTW and there are sold boards everywhere

Wow, so it has increased by practically 33% in 14 months. Can you produce the LR figures for you postcode to substantiate this.

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Houseprices CAN rise forever into a form of land donimated economy, a form of feudal state, if you will.

A land economy is one in which property and land becomes the only real form of equity. This has occured many times in history.

A land economy is one in which property and land, amidst other assets one may own, like savings, ownership of business capital, climb from under 20% of a persons wealth, to represent over 75% of wealth.

The equity of property owners, (compared to the equity of other forms of ownership - businesses, savings) then dominates all other resources in the economy.

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There WAS such a thing as free money. A relation of mine won it when he sold a tiny house he had "bought" three years earlier for a whacking 65k profit at the top of the market, then emigrated to a place where his 65k is effectively worth 120k in real terms (housing, food, transport).

So he got a free gift by being in the right place at the right time.

The reason there is NOW no such thing as free money, is that the FTB mug who bought my relation's property PAID FOR HIS PROFIT, is now probably in negative equity and is also no doubt kicking himself for giving away a lottery win to someone else.

THAT is why there is going to be a crash, because all the profit made by those who sold last year is now something which FTB's are unwilling to continue. There are a few naive idiots around who think the property lottery is going to go on for ever, but not many.

The housing market has for the last ten years not produced a single penny in real profit. Rather, it has been an enormous excercise in re-distribution of wealth, and the FTB's have been fleeced repeatedly by distributing their wealth to others.

They are now beginning to say "F$$K YOU.....I'm not playing your game any more...I can rent for HALF the cost of paying for your profit by taking on a mortgage and paying your ludicrous price....Instead I'll have this reasonable flat thanks for £600 rent a month and YOU can carrying on paying your £1300 a month in a falling market."

VP

Edited by VacantPossession

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Houseprices CAN rise forever into a form of land donimated economy, a form of feudal state, if you will.

Only if wages rise forever, or aliens from Mars decide to buy up all the land in the UK. With wages static and no sign of aliens, prices are going to be stable at best.

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Wow, so it has increased by practically 33% in 14 months. Can you produce the LR figures for you postcode to substantiate this.

I think a rise of 100000 is 50% not 33

I can produce the figures or you can look them up I have no reason to lie but not sure about putting my address on here tbh!I was as surprised as you when we had agents round but all were in the same region.I have had similar rises in all my previous sales lucky or just good design skills who knows?

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Guest Charlie The Tramp

I think a rise of 100000 is 50% not 33

I say again WOW, ok then 50% annual rise in Brighton against 3% claimed Nationwide.

Just the first part of your postcode would be handy.

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I say again WOW, ok then 50% annual rise in Brighton against 3% claimed Nationwide.

Just the first part of your postcode would be handy.

I live in BN1 bought the houseAug/Sep 2004 and had it valued 4 weeks ago.Minimum it was valued at 289950 max 320 so went in the middle Hope to sell in The New Year and buy a small house outright Many people doing this.

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  • 301 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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