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In a discussion with my sister trying to dissuade her from jumping on the BTL bandwagon, I explained that if/when house prices come down, she could be trapped in negative equity. She replied "but surely the bank will shrink the size of the mortgage too?". That is the level of stupidity we're up against.

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About 30% of the UK population are functi0nally illiterate - cannot follow written instructions.

My rough + ready guess is that 50% of the UK population do not understand percentages.

Any attempt to explain compounding interest will fail.

 

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2 minutes ago, Kiwi_Muncher said:

In a discussion with my sister trying to dissuade her from jumping on the BTL bandwagon, I explained that if/when house prices come down, she could be trapped in negative equity. She replied "but surely the bank will shrink the size of the mortgage too?". That is the level of stupidity we're up against.

She is doing her decision based on her beliefs, ignoring facts.

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Just now, Wayward said:

that is astonishing...where did that idea come from?

No idea. She has never bought a house, or done any financial research, on anything. She has no savings or pension. After a £50k inheritance recently I suggested investing the bulk of it in a SIPP which I could manage for her. But no, she wants to do BTL. 

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17 minutes ago, spyguy said:

About 30% of the UK population are functi0nally illiterate - cannot follow written instructions.

My rough + ready guess is that 50% of the UK population do not understand percentages.

Any attempt to explain compounding interest will fail.

 

BTLer version

50% of LLs said they don't give a shit about percentages

40% said it's all about "putting the rent up innit!"

20% said S24 means homes will vanish in thin air.

http://www.propertytribes.com/london-prices-predicted-t-127627912.html

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43 minutes ago, spyguy said:

 

My rough + ready guess is that 50% of the UK population do not understand percentages.

 

 

But at least there are 60% who do, hey?

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During my days of baiting EAs on estateagenttoday, I was banging my head against a brick wall trying to explain real prices. I asked a poster whether they would be happy if they sold their property for £1 more than they bought it ten years ago and they said they would - it was still a profit. When I tried to explain the concept of measuring prices against inflation, I was accused of creating an entirely new way of measuring house prices which no-one else had thought of before.

:rolleyes::rolleyes:

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10 years ago(and more) I was explaining to anyone that would hear that they are buying into an historic housing bubble and they would lose their shirts.  10 years later I look like a plonker and they look genius.

I actually lost one long time friend over this rubbish advice.

I didn't factor in the govt and the BoE throwing the kitchen sink at it, neither did they.

I take cold comfort in the maxim, "rather be ten years early than 1 day late" in a bubble.

That's my story and I'll stick to it LOL !

 

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1 hour ago, Kiwi_Muncher said:

In a discussion with my sister trying to dissuade her from jumping on the BTL bandwagon, I explained that if/when house prices come down, she could be trapped in negative equity. She replied "but surely the bank will shrink the size of the mortgage too?". That is the level of stupidity we're up against.

There are plenty of people spending more time researching trivial purchases like their next mobile phone and much less on the implications of house price, mortgages, interest rates, and arrangement fees.

Seems the UK and much of the Western world has reclassified all monies associated with housing as funny money... unless you're renting where it becomes 'dead'.

What is the real idea of money anyway? We'll forgo the convenience of a 5p carrier bag and instead choose to juggle armfuls of messages back to the car park.

And at what point do you become 'competent' to decipher and understand the complex contracts that are part of everyday life. Even a £500 quid limit credit card has a contract that can span into 20+ pages of legalese.

Of course, back on topic... there are plenty of ignorant and stupid people that have use this 'god-given' right to be a British, self important, and entitled... ones that for some reason or other evolution has decided to pass over.

Edited by cashinmattress

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2 hours ago, spyguy said:

About 30% of the UK population are functi0nally illiterate - cannot follow written instructions.

My rough + ready guess is that 50% of the UK population do not understand percentages.

Any attempt to explain compounding interest will fail.

 

Anecdotal:

A young woman I was working with was in the passenger seat of the work vehicle we were in. She totally flipped out when a stunned bee landed on the centre console.

I got rid of it, but the hysterical lass was worried about another one.

In a misguided attempt to appease her I said "Not to worry! That bee represents 100% of the total number of bees I've encountered in such circumstances".

To which she replied "Don't you mean 1%?".

:/

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I had to explain to my Mrs the concept of negative equity, but then to be fair to her stuff like that has never been her strong point.

I'd agree that the basic maths skills of many is terrible and most don't understand the concept of APR, compound interest and all these other potentially very important figures and terms attached to all the consumer crap they waste their money on.. most simply default to the "oh, they'd only ever do what's best for me, won't they?" mentality; when of course "they" are there solely to rob you of as much as they can.

Of course, this is just the way the establishment want it..

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2 hours ago, evetsm said:

10 years ago(and more) I was explaining to anyone that would hear that they are buying into an historic housing bubble and they would lose their shirts.  10 years later I look like a plonker and they look genius.

I actually lost one long time friend over this rubbish advice.

I didn't factor in the govt and the BoE throwing the kitchen sink at it, neither did they.

I take cold comfort in the maxim, "rather be ten years early than 1 day late" in a bubble.

That's my story and I'll stick to it LOL !

 

Similar. I don't speak to a long-term uni chum much any more, sad....he went full btl-perplectic, 6/7 gaffs including a 'luxury' caravan and a place in Portugal all let to some degree. We used to share solid values, even though he was a socialist taking a state wedge and I am a free market capitalist having been made redundant and starting a business without a pot to p1ss in.

Now its all about property portfolios this ( My warnings against werent considered in the slightest), and pension and early retirements that on rare meet ups, did my head in. He now can't sell the main house in SW London 3 bed terrace 850k. This is becoming more and more obvious from anecdotal reports (5 or 6 in my network). I often put my head in to the NUMEROUS EA's in the area and laugh...doesnt upset punters, as there aren't any! It's a shame they really don't know whats about to hit them....but unforunately they get away with trying to look busy so they don't actually think.

I'd pay to speed this b'stard up. Reckon the current stock market rally is turning the last of the bears....I say hold firm. Greed is in full swing...pleasure, then pain.

 

p.s. Oh yeah, when I ask for a paragraph of text from clients, I mostly don't get a response...2 in 5 sounds about right in terms of illiteracy.

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3 hours ago, Wayward said:

that is astonishing...where did that idea come from?

Presumably from the ever growing notion that we are all like children, to be 'looked after' by the benevolent system.

I mean, 'they' won't ever let anything bad happen to me, right?

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4 hours ago, Kiwi_Muncher said:

In a discussion with my sister trying to dissuade her from jumping on the BTL bandwagon, I explained that if/when house prices come down, she could be trapped in negative equity. She replied "but surely the bank will shrink the size of the mortgage too?". That is the level of stupidity we're up against.

What profession is she in .. dont tell me teaching ... ?

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12 minutes ago, moneyfornothing said:

What profession is she in .. dont tell me teaching ... ?

No ... customer services manager.

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She wants to go into BTL.   Does she have her own home already?

How much of a deposit does she have for the BTL?  Intelligent to earn money, as a Customer Services Manager, save money toward deposit for BTL.

Continuation of all this and all the heavy lifters in the economy will be renting and all the 'innocents' will have the nicest houses at mad high prices.

Pretty close to that already - years of it.

It's an active decision to take someone else's home via claim on BTL, and seek to live on them for rent.

If she is a homeowner (likely) then doesn't want to be renters themsevles as homeowner, but happily do it (BTL) to others - and make it harder for others to become homeowners.

TBH - hope she does and loses the lot.  Sweetest innocence.  No.  Active part of rentierism. 

I am sure she would suddenly 'become less stupid' if tenants told her they were shrinking the rent each month.

Blod, on 03 Apr 2016 - 07:27 AM, said:snapback.png

I can't blame the banks, they need BTL gristle for their grinder. Their attitude makes them ideal.

BTL is fiscal fly paper. Entrapping those of a certain mindset. I remember a conversation once where a colleague announced that her husband's pension lump sum was being put into 'bricks and mortar'. One wag quipped 'faites vos jeux' , place your bets in French. She couldn't understand the need to diversify and treat all advice as sales patter. It emerged that they had 'friends' who had followed that route and were willing to share their inside contact.

A BTL and their money as soon parted.

 

On 4/3/2016 at 11:13 AM, Neverwhere said:

+ 1

A culture which does not value its young and presumes that they are somehow less than human - that they lack basic human desires for home, security, family - and should bear the majority of the costs of society with few of the benefits is deeply unhealthy, and ultimately self-destructive.

No fully functioning human adult is so stupid that they can't learn to practice caution if they know that noone else is watching their back, and that the consequences of their poor decisions won't be forced onto those who actually are innocent of making them.

The only way for them to successfully learn that is for them to be allowed to fail. Those who believe that society will always protect them from the consequences of their own actions will always be able to find something so ingeniously foolish and foolhardy that it was not accurately predicted or immediately understood by those who should supposedly be protecting against it.

Where did the idea come from?  Easy money and HPI forever, and "mug renters".  Homeownership for me - my renterierism for you.  No innocence.  Own choices.

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4 hours ago, Kiwi_Muncher said:

In a discussion with my sister trying to dissuade her from jumping on the BTL bandwagon, I explained that if/when house prices come down, she could be trapped in negative equity. She replied "but surely the bank will shrink the size of the mortgage too?". That is the level of stupidity we're up against.

No she is right. Of course they will shrink the mortgage if she is in negative equity.  Have you not seen their adverts "we are the caring bank and nothing is more important than our customers". All she has to do is phone their Help Line and ask for some shrinking. 

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4 hours ago, Kiwi_Muncher said:

In a discussion with my sister trying to dissuade her from jumping on the BTL bandwagon, I explained that if/when house prices come down, she could be trapped in negative equity. She replied "but surely the bank will shrink the size of the mortgage too?". That is the level of stupidity we're up against.

Was around a mates and the discussion turned to BTL S24 and IO mortgages ,they are not into BTL but when i explain it was a bet on HPI because the mortgage would never get paid off as the profit is next to nothing ,the reply was all mortgages are paid off at the end of 25 years,i explained IO are not ,they looked worried

His miss`es then chirped up our`s is IO and the amount/balance on the statement goes down every month ,i not sure whether she got what i meant by IO or if they actually have an IO and the balance is the interest due which would go down if it was the case , dose anyone know if the latter could be/or is the case ,as i did not want to pry any further but if it is the case i think they need to know sooner rather than later 

They went through a bad financial patch 5-6 years ago due to health problems and i vaguely remember him saying they sorted out the mortgage ,ie lower payments i thought they extend the term,,but the bank could have put them on IO and they are none the wiser 

 

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I remember a very young primary teacher being interviewed on TV not so long ago - she was delighted with her first flat, bought with Help to Buy. 

The interviewer asked whether she was at all worried about the prospect of interest rates going up. 

Such an idea had never even occurred to her.   I honestly don't think she had even realised that they could. 

 

 

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4 hours ago, Kiwi_Muncher said:

In a discussion with my sister trying to dissuade her from jumping on the BTL bandwagon, I explained that if/when house prices come down, she could be trapped in negative equity. She replied "but surely the bank will shrink the size of the mortgage too?". That is the level of stupidity we're up against.

C1V9b-_XEAAq_j9.jpg

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3 hours ago, interestrateripoff said:

Her view may sadly be correct the financial would likely be bailed out and mortgages might be reduced.

Although thats a big gamble.

Haha this was my first thought. "Nope... she is probably right mate." My bet: there will not be mass repossessions, so she will be correct one way or another.

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2 minutes ago, Mrs Bear said:

I remember a very young primary teacher being interviewed on TV not so long ago - she was delighted with her first flat, bought with Help to Buy. 

The interviewer asked whether she was at all worried about the prospect of interest rates going up. 

Such an idea had never even occurred to her.   I honestly don't think she had even realised that they could. 

Some see that, others see no HPC.

According to you it's very doubtful house prices will fall in nice areas. (days before S24 announced)

I call it a market.

That's right.  Life isn't fair, as some HPI and BTL heads are set to find out, finally - imo.

On 5/2/2015 at 0:37 AM, Mrs Bear said:

I am well aware that BOMAD is very unfair on those who can't expect any help, but sadly life never was fair, and most parents like to help if they can. Of course I wish prices had come down to realistic levels - I would not give a toss if the value of our own house halved tomorrow. But at best all I can see now is dribs and drabs, and maybe not even much of that, at least not in expensive areas.

What's the other solution?  Protect the HPI, BTLers and keep on farming younger people who are more intelligent and so hardier to the ordeals of life that protects others in the comfortable magnificence, their HPI and BTLism, in a bubble?

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