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wherebee

How did mis judging the lateness of the HPC cost you?

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As per title.

For me, I sold a house during my divorce (2011) for what I paid for it in 2005.    Adding in moving and legal/tax costs, probably lost 50k.  I was convinced the market was going to crash, so priced it aggressively to free up capital for the divorce settlement.

It's now probably marketable for almost 200% of what I paid for it (south east) due to government bubble policies.

Edited by wherebee

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Just now, GreenDevil said:

You need to the add the cost of dead rental money paying your landlords mortage, so about 12k a year on average on top.

The rent I pay barely covers the maintenance costs of the house I live in.  Roof work three months ago, redecorating 2 months ago, electrical issues last month, the boiler has started making funny noises this month.  I'm more than happy to be "wasting" my rent this way.

The housing market in the UK is very risky at the moment.  Even if some people have made money over the last few years, others have lost a great deal of money as well.  My partner works with someone who really stretched themselves to buy a flat in prime central London two years ago.  He probably lost his entire annual salary last year from the fall in the value of the flat.

.  

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Worked out not buying in 2004 when I had a chance and choosing to rent in NW1 and then SE1 has cost me £3000000 over 12 years

Assumed repayment Mortgages and stepping up ladder every 5 years using 10-25% deposits. (185K 1ed flat 2004, 400K 2bed flat 2009, 800K 4 Bed House 2014

Deducted Opp Cost of savings as well as transaction costs and delta versus renting.

using logic and reasoning and risk aversion has cost me BIG as a Londoner :(

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Dunno how much it has cost me but the longer it goes on the more vicious the correction will be. To be honest I am not sure that western civilization can survive as we know it after the inevitable correction.

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2 minutes ago, Roman Roady said:

Dunno how much it has cost me but the longer it goes on the more vicious the correction will be. To be honest I am not sure that western civilization can survive as we know it after the inevitable correction.

x2.

 

I used to worry about me,now I worry about my kids.

Edited by Sancho Panza
spelling

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8 minutes ago, Quicksilver said:

Worked out not buying in 2004 when I had a chance and choosing to rent in NW1 and then SE1 has cost me £3000000 over 12 years

Assumed repayment Mortgages and stepping up ladder every 5 years using 10-25% deposits. (185K 1ed flat 2004, 400K 2bed flat 2009, 800K 4 Bed House 2014

Deducted Opp Cost of savings as well as transaction costs and delta versus renting.

using logic and reasoning and risk aversion has cost me BIG as a Londoner :(

I'd wait till the dump is behind you before assessing how much you've won and lost.

There's a lot of inventory stacking up in Londinium.I wouldn't want to be the wrong side of this trade with 75%+ of my capital.

This is from the inventory/transaction thread:

 

 

'I've been pondering the situation in SW3 and decided to go back a few years.

It turns out he demand/supply imbalance is the worst it's been since 2007.SW3 is leading the charge it appears.

This is a nasty set up for anyone wanting to sell there.

Sep 2007 361/51=7 months supply

Sep 2008 550/25 22 months

Sep 2009 465/49=9 months

Sep 2010 430/34=12 months

Sep 2011 382/49= 8 months

Sep 2012 444/26=17 months

Sep 2013 442/43=10 months

Sep 2014 549/49= 11 months

Sep 2015  504/31=16 months

Sep 2016 596/14=42 months supply

 

Edit to add-raw unadjusted data warning.DYOR.'

Edited by Sancho Panza

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Sancho, whats happening with new build flats in Nine Elms is of little interest to me now. I am too old to be looking at flats and am looking at 4+ bed detached houses now as I approach 40. in said areas i am looking there is 8 months supply (consistent over last 2 years) and very steady prices (5% a year increases over the last 10 years) so I doubt there will be a collapse in that area on detached houses beyond 10-15%. But I AM WAITING 18-24 months anyway.

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2011 was when I settled down... Just back from travelling, married, first child due. I've spent £60k in rent since then... Hard to know how to work it out... If I buy a house for £60k less then 2011 prices have I broken even?

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10 minutes ago, Quicksilver said:

Sancho, whats happening with new build flats in Nine Elms is of little interest to me now. I am too old to be looking at flats and am looking at 4+ bed detached houses now as I approach 40. in said areas i am looking there is 8 months supply (consistent over last 2 years) and very steady prices (5% a year increases over the last 10 years) so I doubt there will be a collapse in that area on detached houses beyond 10-15%. But I AM WAITING 18-24 months anyway.

Prices spiking higher in Leicester-my patch-on shrinking inventory.

Experience has taught me to watch the hot money areas.SW3 and assorted central London postcodes are the hot money of the last ten years.SW3 trebled between 2008-2014.Leicester went nowhere.

I'm a big fan of Dow theory-price/volume etc.We're getting some conflicting signals nationally but the hot money areas are pointing down.Inventory building on shrinking liquidity....pays yer money etc.

 

Obviously DYOR...

Edited by Sancho Panza

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In 4 years amid rampant HPI, typical house im after has put on 40,000.

Plus 12k rent a year, so about 88k. Or 22k PA.... After tax thatd be about 30K PA

Edited by GreenDevil

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I don't think I'd worry too much about the bubble bursting in most parts of the country. You could get hit for a few tens of k (some people balls deep a bit more, granted) but you could recover. I would not, however,  buy in the South-East now. There is simply too far to fall, get on the wrong end of that trade and for a lot of people that'd be difficult to ever recover from. A friend of mine has just put everything he has into a s**thole flat in London (off the back of his inflated salary) - I liken it to going all in on tech stocks in the late 90's. A couple of years of mad gains to come potentially but if it collapses when you're still holding you're finished. It is clearly a gamble now, a million miles away from a value investment. I don't think I'd want to risk everything for so little (a poxy flat).

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26 minutes ago, Quicksilver said:

Sancho, whats happening with new build flats in Nine Elms is of little interest to me now. I am too old to be looking at flats and am looking at 4+ bed detached houses now as I approach 40. in said areas i am looking there is 8 months supply (consistent over last 2 years) and very steady prices (5% a year increases over the last 10 years) so I doubt there will be a collapse in that area on detached houses beyond 10-15%. But I AM WAITING 18-24 months anyway.

2 minutes ago, Sancho Panza said:

W8 Kensington

535/14=38 months supply

SW7 Knightsbridge

561/8=70 months supply.......... a new leader

SW10 West Brompton

538/9=59 months supply

W11 Notting Hill

464/24= 19 months supply.

 

 

 

I thought I'd check 5 of the most expensive postcodes in London in addition to SW3 Chelsea.

All feature higher inventory,lower transactions and sometimes sharply lower prices.

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I quit my job in 2003 and went traveling. My bank was offering me a ludicrously big mortgage no questions asked, but I knew that houses were overpriced, so I spunked my deposit up the wall. I bought in 2010 at the insistence of my wife I haven't done the maths on what difference buying in 2003 would have made. :)

My sister bought in 96. The best investment decisions she ever made was to get knocked up at 19 smack bang in the middle of what would turn out to be the low point in the house price cycle. Her and her now husband bought in Cathays in Cardiff which was about to have a student BTL boom. They paid circa  £37k if I remember correctly..

 

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Its rather academic now as I have given up any hope of ever buying frankly.

Renting till I die as they say!

Just a question of where I retire to that isn't the UK.

 

Edited by MARTINX9

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Bought in 2000, moved once.  I think as a rough estimate I've paid what I would have paid if I had bought the 2nd house originally in 2000.  So if prices go back to 2000ish levels the money wasted is the same.  If they fall below that then in one sense I've lost money but it was going to be drained from me in rent or mortgage so as a living cost I've not lost anything.

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2 hours ago, Sancho Panza said:

I'd wait till the dump is behind you before assessing how much you've won and lost.

There's a lot of inventory stacking up in Londinium.I wouldn't want to be the wrong side of this trade with 75%+ of my capital.

This is from the inventory/transaction thread:

 

 

'I've been pondering the situation in SW3 and decided to go back a few years.

It turns out he demand/supply imbalance is the worst it's been since 2007.SW3 is leading the charge it appears.

This is a nasty set up for anyone wanting to sell there.

Sep 2007 361/51=7 months supply

Sep 2008 550/25 22 months

Sep 2009 465/49=9 months

Sep 2010 430/34=12 months

Sep 2011 382/49= 8 months

Sep 2012 444/26=17 months

Sep 2013 442/43=10 months

Sep 2014 549/49= 11 months

Sep 2015  504/31=16 months

Sep 2016 596/14=42 months supply

 

Edit to add-raw unadjusted data warning.DYOR.'

Wait for the new government prop to buy these up and offer them as affordable rent flats. Ticks the boxes for the JAMs, props the builders and stops the market collapsing. I can see this happening in the areas of new build flats which haven't sold

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could have bought in 2007 but the financial thing happened so held off and rented in a house share. best years of my life ensued so took my eye off the the ball and ended paying maybe £75k more than i could have when i finally got around to buying in 2015.

i don't view the extra paid and the "dead money" rent as a loss because those days were priceless

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tried to buy a flat in 2011 in bradford (of all places) for 89k, fell through. Just checked in 2017 and they are going for around 79k so 10k 'saved' there.
Rented for 3 years so lets say 18k spent on rent, but i would of been paying interest on the mortgage also, so at a guess that would be £9,000 in interest. 

so roughly im 'up' £1000 as the losses from price falling and mortgage interest outweigh the losses of renting.

Then lived with parents in 2014 so thats £36,000 saved in rent and/or mortgage interest since then. Houses at the start of 2014 were around 130k in these parts, currently around 168k (down from a peak of 185k) so thats me down £2,000, but then you add in the yorkshire thing, and im down £1,000 overall.

i can cancel out the commuting costs (as i would of bought near to work, but parents are 1 hours drive away), as i dont have council tax etc to pay. 

but £1,000 down doesn't seem too bad, but the ball-ache of commuting and living with parents has terrible. Maybe im up if you include a new boiler or something. Outside of london i wouldnt say renting/living with parents is really that bad financially, although you can end up down. But not life changing amounts of money. 

i think by the end of June my savings at living at home, combined with the housing market cooling much further i should end up a few grand up, but a bit touch and go.

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18 minutes ago, hotairmail said:

I had paid my house off. I sold October 2006. The capital I released has more than paid my rent over the last 10 years by speculating on the markets. Indeed it has replaced my prior salary too. This is not London though.

That's closest to me. Bought 1998, took a redundancy 2003 and decided to use the cash to speculate. That went well paid the mortgage off 2005 and sold 2007. Not worked since 2003.

Looking at the opportunity cost/income only as interest on savings against rental costs, I'd say I'm just about level now after previously being well ahead. With the 6%+ on savings now down to 2.5% (NS&I closed to new money).

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3 hours ago, GreenDevil said:

You need to the add the cost of dead rental money paying your landlords mortage, so about 12k a year on average on top.

No

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Some (not all) posters on this thread are subject to the dunning-kruger effect.

Yeah man, by a house vs keeping it in a building society account.

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2 hours ago, GreenDevil said:

In 4 years amid rampant HPI, typical house im after has put on 40,000.

Plus 12k rent a year, so about 88k. Or 22k PA.... After tax thatd be about 30K PA

I know mortgage rates are small but you need to also subtract mortgage interest re any loan or subtract interest/gain on investmen t(for capital) 

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