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Inflationary Pressure

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I STRed exactly one year ago and consequently placed all my belongings in storage. I got a call today informing me that my rental was being increased by 10%. Apparently they justify the increase because ...... wait for it: "House prices have gone up, it's inflation mate init!?"

So there you have it. Inflation is running at 2%, house prices in the South have levelled off or gone down but some Chav in the storage depot reckons "It's house prices init!".

I was going to refer ****nuts to this site but somehow it didn't seem worth it. It makes me wonder if inflation is out of control. I'm not worried about a house price crash; I'm more scared of the obvious recession the UK is now facing. There really is a different feeling from even a year ago.

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Guest muttley

I would also be scared of a recession if I were you. Those ultra-low mid/post recession rates on your STR cash will make the mistake painfully obvious......

Yes.You wouldn't want to have any cash in a recession.Go get some debt.

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I would also be scared of a recession if I were you. Those ultra-low mid/post recession rates on your STR cash will make the mistake painfully obvious......

Is that low rates like the 40 odd% my Fidelity Special Situations fund ISAs have increased by in the last 13 months? A spread of cash in high interest rate accounts plus some canny stock/fund investment can produce relatively safe returns way above any landlord/BTLer return in a shorter timeframe.

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Is that low rates like the 40 odd% my Fidelity Special Situations fund ISAs have increased by in the last 13 months? A spread of cash in high interest rate accounts plus some canny stock/fund investment can produce relatively safe returns way above any landlord/BTLer return in a shorter timeframe.

Did you put that in my Help me Invest thread? No, why not?

Haven't you just been lucky in a minor way & conveniently forgotten the losses?

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I would also be scared of a recession if I were you. Those ultra-low mid/post recession rates on your STR cash will make the mistake painfully obvious......

I don't think you're wrong as it happens! I'm heading for the States to a place where HPI hasn't hit that hard. In the current economic climate it's pretty pointless holding onto cash or a house in this country. It's no wonder the smart people choose gold coming into a recession. Wish I'd listening to that Bubb fella a year ago!

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I don't think you're wrong as it happens! I'm heading for the States to a place where HPI hasn't hit that hard. In the current economic climate it's pretty pointless holding onto cash or a house in this country. It's no wonder the smart people choose gold coming into a recession. Wish I'd listening to that Bubb fella a year ago!

Well good luck then, at least you're being realistic. Not sure about the U.S. thing though, who knows?

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Yes.You wouldn't want to have any cash in a recession.Go get some debt.

Its six of one and half a dozen of the other..

debt crippled people last time because inflation didn't happen..

and as merv warned.. salaries increasing by over 2.5% and IR's go up

Inflation is all they are fighting at the MPC...

Not with huge marked success... granted..

but apart from taxes... what has gone up..?

House prices?

But surely they are just a matter of opinion..

Can't quite help thinking how real debt is though..

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Inflation is running out of control, especially if the service/product is effectively a monopoly like govt services or oil. I've just reduced my next years IT support contracts by 5% for my customers becuase I can see their sales are down this year and so far Jan has been the worst month in years and they are getting hit by companies going bust. Talking to one of them today they said its "b*ll*cks when people say the economy is doing well, everyone seems to be talking about recession except the tv and papers". And I have to agree this country is going into recession yet the papers and tv are not mentioning it. Its as if the Govt or someone has said no bad financial news and I wouldnt be surprised if its some sort of Govt experiment to see off the recession by not having media mention the word becuase of the lessons learned after the 90's recession.

Hopefully your Clients will see that as a goodwill gesture and it will see you through if things do hit the fan. It is all spin and b*llocks from the tv and papers though!!!!

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Its not the inflation you should be scared of...

deflation - is the real killer you want to be VERY afraid of.

sure prices go up by 10% now but when Cash goes up by 25% a year compound. then the low interest rates on your savings account won't seem too bad at all.

thats the perversity of the markets often the very worst investment could actually be one of the best investments.

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Did you put that in my Help me Invest thread? No, why not?

Haven't you just been lucky in a minor way & conveniently forgotten the losses?

No. I am no Bubb or trader. I gave my money (and my wife's and my kids etc) to Anthony Bolton and a couple of other top fund managers to invest in the form of ISAs up to the limits and non-ISA'd beyond that. No losses (well, if the fund had any losses last year on any investments it was more than offset by profits elsewhere to make up my 40%). Actually I've just checked the statements, its 43% in 15 months, correction.

It really is that simple. If I am lucky then so is Anthony Bolton and his compound >20% per annum average return on his Special Situations fund since 1979. That is a professional investor. Luck my *rse. Is buying at the bottom of a cycle in property and leveraging off it lucky in some way? Usually. Do BTlrs make 20% on their capital per annum on average over 25 years? Who cares. I was only trying to show the safeish investments that could be used to put STR funds in. The point is absent a sentimental bull run, property is a long way off the compound returns that everyday savers can make by letting the experts manage their investments.

On the subject of saving generally, a friend of mine has opened a PEP/ISA every year since the late 80s. 18 of them I think and a lovely seven figure tax free investment it is currently given compound returns in growth funds. Or, he could have put a 10% deposit on a one bedroom flat in London at the top of the market instead in 1988, paid the same amount in interest on the loan for 25 years and waited until 1996 until it was worth what he paid for it. Then, by luck, he would have had it (maybe) triple in value since then. If he was lucky his property "investment" would be worth £250-300k now. Instead the poor sod put his savings into PEPs and bought a property in 1992 for family reasons rather than "investment" ones. To some he looks "lucky" - to me he looks both sensible and canny.

Edited by Tempest

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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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