Nearing the end of my sanity..

[Wayward]

1 minute ago, longgone said:

both 

Yes i expect so. The progress we have made impresses me...such as the house once within reach of a milk man and his family now only in reach of a law firm partner or an experienced surgeon....progress.

[Si1]

2 minutes ago, prozac said:

Dont give up, they have to go down, it is only a question of time.

 

Very slowly, well into the 2030s 

[longgone]

Just now, Wayward said:

Yes i expect so. The progress we have made impresses me...such as the house once within reach of a milk man and his family now only in reach of a law firm partner or an experienced surgeon....progress.

i really try not to think too much about it now. 

[ebull]

On 04/01/2019 at 19:09, chiefofwales said:

I've been a long time lurker and very rare poster. I have followed and studied this forum and lots of associated reading (Say Goodbye to all that buy to let to name one) for the last few years. It has been such a fantastic resource and breath of fresh air. 

However, my HPC confidence  has come at a cost with my family and friends who think I am an absolute idiot. This is because for the last 5 years or so of my wife and I not buying a house, we've seen prices rise where even if there were a correction now we'd still be in worse off. The amount of times I have been told to buy now, what are you waiting for, rent is dead money etc is probably symptomatic of everyone else on here! But my belief is also being tested and I don't know how much longer we can all wait. 

The point of my post is do people believe this is going to happen and within the next couple of years? We want to start a family and the thought of renting while raising a child is not something we want to do (given our current experiences to date). I am losing faith and this is the only place which seems sane.

Sorry for my last horribly-off-topic-post. To make up for that I'll post a view.

This is impossible to answer without knowing the details of your situation.

IMO Almost all UK leaseholds are a rip off contract so if that's all you can afford, the answer is wait until you can afford a freehold.

IMO house prices are double or triple what they sensibly should be BUT that does not mean a crash is in any way guaranteed even in the next few decades.

One of the reasons prices are so high is that credit is so easy so if you are able to buy a freehold house with enough space to stay there for decades, my advice would be a very long mortgage fix [10 years, more if possible] and do it.

At the moment you are short a house. That's a market position and one with almost unlimited cost [space in places like HK or Singapore costs far more than UK]. If you have at least an inadequate [too small] house as I do, you at least have somewhere to stay even if it's not what you want.Of course if you're in one of the most expensive places of UK or means are limited the only option may be leasehold, in that case I would consider emigrating [or drink a lot]. Only constructive suggestion: make a plan to increase income.

Edited January 10, 2019 by ebull

[simvastatin]

10 minutes ago, Si1 said:

Very slowly, well into the 2030s 

....................................another poster who wished he had never discovered HPC

 

Not you, the OP

Edited January 10, 2019 by prozac

[Guillotine]

It’s a good thing to have the courage of your convictions.  You also need to be aware that you might not be right and that you are allowed to change your mind.

i sat out the market for over 15 years.  I literally could not commit largely because I wanted a better house than I could afford.  It’s not something I therefore regret.

I ended up buying a dump when I was actually in a position to deal with it emotionally and so much notional money had been lost it just didn’t matter anymore.

There will be a sharp fall in prices. I’m ready for it and I do hope you are too and things go your way..

 

[ebull]

Oh and if you want to get some balance with respect to those who are cheer leading for be-a-HPCer, don't let the HPI-mob win etc, simply go read posts on this forum from 2006-7-8 and consider what happenned after that. Especially in the South East/London where everyone here insisted the crash was guaranteed.

I agree it [a crash in real terms] still is guaranteed.

Which decade however is not guaranteed.

If you are planning to buy using a salary to pay a mortgage you are mostly limited to age 20-65 so there is not total free choice about when you buy.

[Bluestone59]

11 minutes ago, Si1 said:

That was a pretty mild though sharp recession.

Credit crunch was much worse.

In the South East it seemed dire but that could have been partly because the region had fared a bit better than elsewhere in the past. The downturn did more damage to white collar workers I believe.

The credit crunch may well have been worse but then efforts were made to ameliorate it. Do I not recall in the early nineties a government minister saying "if it isn't hurting it isn't working?" 

[Dorkins]

On 04/01/2019 at 18:09, chiefofwales said:

We want to start a family and the thought of renting while raising a child is not something we want to do (given our current experiences to date).

If you want to have a kid just have a kid. We are raising one in a private rental and her sibling is on the way. It can be done. A small child does not need a 4 bed detached with a double garage, they just need your time.

Don't let landlords/estate agents/bankers/politicians decide your life for you.

Edited January 10, 2019 by Dorkins

[Dorkins]

26 minutes ago, ebull said:

At the moment you are short a house.

Bzzzt, wrong.

Shorting is when you borrow an asset, then sell it to somebody with the intention of buying it back in the future in order to repay the original owner.

https://www.investopedia.com/terms/s/shortselling.asp

You can do this with shares. Ever heard of anybody doing it with a house?

[Si1]

22 minutes ago, Bluestone59 said:

In the South East it seemed dire but that could have been partly because the region had fared a bit better than elsewhere in the past. The downturn did more damage to white collar workers I believe.

The credit crunch may well have been worse but then efforts were made to ameliorate it. Do I not recall in the early nineties a government minister saying "if it isn't hurting it isn't working?" 

That was Prime Minister Major. The thing with the credit crunch was that it was so much bigger and so global that the govt response was so much greater. 

[jiltedjen]

Value will go down, but the sterling figure will never go down. 

i didn’t think that way in 2008, but having seen the lengths they will go to to support endless HPI since then I think you would be mad to see a HPC in Sterling terms

 

[bushblairandbrown]

1 hour ago, Dorkins said:

Bzzzt, wrong.

Shorting is when you borrow an asset, then sell it to somebody with the intention of buying it back in the future in order to repay the original owner.

https://www.investopedia.com/terms/s/shortselling.asp

You can do this with shares. Ever heard of anybody doing it with a house?

If you don't own a house you are short a house because you need somewhere to live. You will pay rent just like you would pay a charge on borrowing shares you sold short. The cash flows are identical. Incidentally, historically you didn't need to borrow shares to short sell. This is called naked short selling now. 

[Bluestone59]

22 minutes ago, jiltedjen said:

Value will go down, but the sterling figure will never go down. 

i didn’t think that way in 2008, but having seen the lengths they will go to to support endless HPI since then I think you would be mad to see a HPC in Sterling terms

 

I'm tempted to agree but I also think there must be an upper limit to what people will/can pay. Ok you don't have the money, HMG says as you're a bit short take out the biggest mortgage you can, now how much on top do you need?

£300k, ok tell you what, we'll lend you that and you don't have to make any repayments we'll just take it out of the proceeds when you come to sell. It won't ever go down in price we'll make sure of that. So what do you think then, deal?

Ridiculous example maybe, which I made up for a reason.  If they ever get to that stage even the thickest person in the country can see that the emperor has no clothes. And hadn't for a very long time. Then what about non-owners or the effect on confidence? Given that we run a trade deficit what is imported food going to cost?  Just thinking aloud.

Have to admit they have already succeeded far beyond my expectations but why assume the future must be like the past? It often isn't.

Also how far would you trust a government guarantee of any kind?

Despite what I just said I am pretty certain that, funds permitting, HMG will "write off" any unpaid HTB before anyone is evicted, probably using the M O above. 

 

[Ah-so]

2 hours ago, Si1 said:

Very slowly, well into the 2030s 

Which would be just over 25 years since this site was founded - you could potentially have waited a whole mortgage worth of time waiting for prices to fall.

While I would like to see an almighty crash, I can't really see one coming. We may well have a cyclical dip coming over the next couple of years with prices perhaps down 10 or 15 percent. That might be the best time to buy.

[honkydonkey]

2 hours ago, Dorkins said:

Bzzzt, wrong.

Shorting is when you borrow an asset, then sell it to somebody with the intention of buying it back in the future in order to repay the original owner.

https://www.investopedia.com/terms/s/shortselling.asp

You can do this with shares. Ever heard of anybody doing it with a house?

Yes it’s called renting. You borrow the house, pay for that borrowing, then buy it after the price has fallen. You’re also off the hook if prices go up, so win win ?

Edited January 10, 2019 by honkydonkey

[Si1]

17 minutes ago, Ah-so said:

Which would be just over 25 years since this site was founded - you could potentially have waited a whole mortgage worth of time waiting for prices to fall.

While I would like to see an almighty crash, I can't really see one coming. We may well have a cyclical dip coming over the next couple of years with prices perhaps down 10 or 15 percent. That might be the best time to buy.

I'd agree with that.

I certainly don't think saving in cash has or will be a good strategy during this period.

[nothernsoul]

Unfortunately, neither can i see a sterling value crash, purely because of the extent of the lengths to which the government will go. The thing about the emperors new clothes, was everybody DID know the emperor was naked, but it was politically expedient to pretend otherwise. If that story was more realistic, the little boy who called out  would have been swiftly dragged away by the Emperors secret police while everybody fearfully ignored him. I sort of think that sums up the housing market. 

[dances with sheeple]

2 hours ago, jiltedjen said:

Value will go down, but the sterling figure will never go down. 

i didn’t think that way in 2008, but having seen the lengths they will go to to support endless HPI since then I think you would be mad to see a HPC in Sterling terms

 

It`s not working though? Transactions and mortgage approvals are collapsing, the EZ is going to have a major crisis soon IMO, and we have massive votes for Trump, Brexit and probably a "populist" (or worse) wave will sweep across Europe the next chance people get to vote, the bailouts have really backfired on the PTB IMO, they have played the same hand (endless QE/low rates) to much and too long, unless it was all planned this way? UK house prices are a side show in a side show tent now, there are so many potential triggers for economic woe now that I almost feel sorry for people who loaded up on mortgage debt. Can`t think of anything worse than losing your job with a big mortgage, trying to sell to move with no buyers while going into negative equity, the bank taking it off you would probably be a relief.

[Captain Kirk]

3 hours ago, Dorkins said:

If you want to have a kid just have a kid. We are raising one in a private rental and her sibling is on the way. It can be done. A small child does not need a 4 bed detached with a double garage, they just need your time.

Don't let landlords/estate agents/bankers/politicians decide your life for you.

Also, you have the safety net of the welfare state once you have a kid. And with the ban on tenant fees coming in, and probably further changes in the private rental sector in favour of the tenant, renting could be a good choice. Plus with most people under 40 renting soon you'd be part of the voting majority.

 

[dances with sheeple]

1 hour ago, Bluestone59 said:

I'm tempted to agree but I also think there must be an upper limit to what people will/can pay. Ok you don't have the money, HMG says as you're a bit short take out the biggest mortgage you can, now how much on top do you need?

£300k, ok tell you what, we'll lend you that and you don't have to make any repayments we'll just take it out of the proceeds when you come to sell. It won't ever go down in price we'll make sure of that. So what do you think then, deal?

Ridiculous example maybe, which I made up for a reason.  If they ever get to that stage even the thickest person in the country can see that the emperor has no clothes. And hadn't for a very long time. Then what about non-owners or the effect on confidence? Given that we run a trade deficit what is imported food going to cost?  Just thinking aloud.

Have to admit they have already succeeded far beyond my expectations but why assume the future must be like the past? It often isn't.

Also how far would you trust a government guarantee of any kind?

Despite what I just said I am pretty certain that, funds permitting, HMG will "write off" any unpaid HTB before anyone is evicted, probably using the M O above. 

 

Mortgage approvals and transactions tell us that the banks, public and government are not playing the game as they were a few years ago, either the banks/government are spooked about loans going bad, or the public (or many of them) are waking up to the scam that is pumping up an asset with cheap loans so people have to borrow more for longer. I think a lot of people have awakened and realised that expensive property only really benefits money lenders.

[reginekierkegaard]

4 hours ago, Dorkins said:

Bzzzt, wrong.

Shorting is when you borrow an asset, then sell it to somebody with the intention of buying it back in the future in order to repay the original owner.

https://www.investopedia.com/terms/s/shortselling.asp

You can do this with shares. Ever heard of anybody doing it with a house?

In this case, if you are buying a house with a mortgage, you are effectively buying on Margin. You hope that the increase in prices would outpace the cost of borrowing. You make money on your 'margin'. 

[GreenDevil]

EAs driving new beemers mercs and range rovers now instead of honda civics. Whats that tell you?

[Dorkins]

4 hours ago, bushblairandbrown said:

If you don't own a house you are short a house because you need somewhere to live. You will pay rent just like you would pay a charge on borrowing shares you sold short. The cash flows are identical.

Difference is, if you borrow shares and then sell them you are taking a position on the share price because you will need to buy them back in order to repay the person you borrowed the shares from.

If you borrow shares and hold onto them you are not short selling.

[Voice of Doom]

8 hours ago, dances with sheeple said:

It`s not working though? Transactions and mortgage approvals are collapsing, the EZ is going to have a major crisis soon IMO, and we have massive votes for Trump, Brexit and probably a "populist" (or worse) wave will sweep across Europe the next chance people get to vote, the bailouts have really backfired on the PTB IMO, they have played the same hand (endless QE/low rates) to much and too long, unless it was all planned this way? UK house prices are a side show in a side show tent now, there are so many potential triggers for economic woe now that I almost feel sorry for people who loaded up on mortgage debt. Can`t think of anything worse than losing your job with a big mortgage, trying to sell to move with no buyers while going into negative equity, the bank taking it off you would probably be a relief.

Yes. The risks are legion. We might get lucky and muddle through, but it's like tip-toeing through a minefield.

And when we step on one of the mines and the next crisis hits, politicians won't be able to pull the same levers as before. "Trust us, we're the guys who gave you the long pre-crisis boom" is slightly different from: "Trust us, we're the guys who gave you austerity / rising inequality / poltical instability / perpetual Eurozone crisis, etc." So I don't think they'll be able to support asset prices as they did before.

So, back to the OP: I think the correction will be sooner than others on this thread think, but none of us can possibly know so I won't dispense advice other than to say continue to keep yourself informed. Make sure your economic bullsh*t detector is working well!