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94% of property transactions to still go ahead.


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HOLA441
1 hour ago, “Nasty Piece of work” said:

If you also count being anally abused with a broken bottle, 2020 price minus 10% is fair.  Fair hasn’t featured in house prices for 20 years plus.

Thing is, I actually agree with you. I remember selling an inheritance property in 1998 that a relative had left my brother, father and I, and we were all of the opinion that we got a crazy price for it. £240k I think it was we sold it for from memory, and off we went thanking our lucky stars we got out before the impending doom we all saw coming down the line. Houses on that street now go for £750 - £900k depending on condition and location. I don't need to spell out how much better off we would have been just renting that out for the past two decades or so...

I am going into this with my eyes (and backside) wide open. The thing is that if you want to own a property (I do), then there is a ticking clock for when you can make that happen. I've got a couple more years before I won't be able to get a standard term mortgage, so the ability for me to sit around any longer has gone. Even if this does result in a huge crash, it will take time for people to realise what is going on, adjust their expectations down etc etc. It could be what, 12 - 18 months until prices filter through into the wider public psyche, and we start to see significant drops in the month on month property graphs. By this time with lending criteria no doubt tightened, I am done for in terms of owning something that I can bring a family up in. It is the bird in the hand versus two in the bushes conundrum hey!? I have the ability now to buy a house that we both love, can see ourselves in for decades to come, and is affordable in that it will cost about £100 a month more than we are currently paying in rent - about 25% of our joint post tax take home pay. If a baby comes then I can happily service the mortgage on my salary alone.

Or, I sit and wait for the crash that has been coming since that chat with my dad in 1998, and then what if it doesn't? What if the majority on this site are wrong, and things maybe have a slight wobble for a year or so, and then the house price express rumbles on forever up? For me, the only downside to buying now is if interest rates shoot up rapidly over the next 2 years that my fixed term mortgage runs for, house prices tank by 30% or so, and I lose my job or some other such catastrophe. I am making what I think is a best guess that interest rates are not going to increase wildly in the next two years, there won't be a large crash in prices in London (10% at best, but with a quick recovery), and I work on the front line of the NHS so unless I make some sort of clinical error that sees me struck off, my job is about as secure as anything could ever be. My other half works alongside me - I do the medicating, she does the chatting...The point of all this being, I am happy to pay what I am paying, and as long as things don't wildly deviate from what they were before COVID, then I will have zero issues with servicing the debt. Do I think that what has happened to house prices over the past 20 years or so is fair or good for society? Absolutely not. Am I of the opinion that there is so much vested interest in maintaining the status quo that things won't be allowed to go that wrong? Absolutely yes. Am I at the point where it is now or never? 100% yes.

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HOLA442
4 minutes ago, Twenty Something said:

Thing is, I actually agree with you. I remember selling an inheritance property in 1998 that a relative had left my brother, father and I, and we were all of the opinion that we got a crazy price for it. £240k I think it was we sold it for from memory, and off we went thanking our lucky stars we got out before the impending doom we all saw coming down the line. Houses on that street now go for £750 - £900k depending on condition and location. I don't need to spell out how much better off we would have been just renting that out for the past two decades or so...

I am going into this with my eyes (and backside) wide open. The thing is that if you want to own a property (I do), then there is a ticking clock for when you can make that happen. I've got a couple more years before I won't be able to get a standard term mortgage, so the ability for me to sit around any longer has gone. Even if this does result in a huge crash, it will take time for people to realise what is going on, adjust their expectations down etc etc. It could be what, 12 - 18 months until prices filter through into the wider public psyche, and we start to see significant drops in the month on month property graphs. By this time with lending criteria no doubt tightened, I am done for in terms of owning something that I can bring a family up in. It is the bird in the hand versus two in the bushes conundrum hey!? I have the ability now to buy a house that we both love, can see ourselves in for decades to come, and is affordable in that it will cost about £100 a month more than we are currently paying in rent - about 25% of our joint post tax take home pay. If a baby comes then I can happily service the mortgage on my salary alone.

Or, I sit and wait for the crash that has been coming since that chat with my dad in 1998, and then what if it doesn't? What if the majority on this site are wrong, and things maybe have a slight wobble for a year or so, and then the house price express rumbles on forever up? For me, the only downside to buying now is if interest rates shoot up rapidly over the next 2 years that my fixed term mortgage runs for, house prices tank by 30% or so, and I lose my job or some other such catastrophe. I am making what I think is a best guess that interest rates are not going to increase wildly in the next two years, there won't be a large crash in prices in London (10% at best, but with a quick recovery), and I work on the front line of the NHS so unless I make some sort of clinical error that sees me struck off, my job is about as secure as anything could ever be. My other half works alongside me - I do the medicating, she does the chatting...The point of all this being, I am happy to pay what I am paying, and as long as things don't wildly deviate from what they were before COVID, then I will have zero issues with servicing the debt. Do I think that what has happened to house prices over the past 20 years or so is fair or good for society? Absolutely not. Am I of the opinion that there is so much vested interest in maintaining the status quo that things won't be allowed to go that wrong? Absolutely yes. Am I at the point where it is now or never? 100% yes.

What?

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HOLA443
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HOLA444
52 minutes ago, A.steve said:

I don't think you're experiencing an unusual feeling. I don't think you'd feel differently if there were a functioning economy. I don't think you would feel differently if, worldwide, the media and governments had not adopted policies to promote a hysterical fear of death.  I don't think you'd feel differently if the NHS were continuing to provide routine healthcare to promote quality of life.

From where I observe, the long term economic, social and political implications of interventions will have dramatically more significant effects than the direct consequences of a virus - for any reasonable way of trying to measure outcomes.  House prices seem as good a proxy for a meaningful metric as any other numbers we see promoted.

If house prices fall - that is one thing.  If (as seems to be happening) the housing market  (and asset markets in general) catastrophically fail... then that is another.  With the former scenario, there's a transfer of wealth between demographics.  With the latter, there is a systematic failure of 'free' civil society... and, after that... who knows?  Perhaps health care will be the least of our worries?  In 1918, there was a "Spanish Flu" (yes, I know it didn't originate in Spain, but it was reported, lots, from there) and by 1936 there was a full-blown civil war - where anarchists and communists overthrew government... and, with that, the overthrow of existing civil conventions.  After 3 years of that reality, I suspect (having read Orwell's personal account of it) the Spanish had moved on from being afraid of the flu.

 

It wasn’t really a Spanish flu anyway. It reportedly started in the US and France amongst soldiers packed in together in barracks.

Spain was just the first to report cases as they weren’t at war, had a free press and there was no censorship. 

It didn’t really affect them anymore than anyone else.

Despite the fact it killed more Brits and Americans than WWI it is strangely rarely mentioned or covered in movies or tv dramas. Indeed the only example I can think of is where it was used as a plot device to reunite Mary and Matthew in Downton Abbey - his fiancé died from it in the show.

Perhaps we will try to pretend this pandemic never happened and it will fade from public discourse and films or dramas in a decade or more?

Edited by MARTINX9
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HOLA445
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HOLA446
5 minutes ago, MARTINX9 said:

It didn’t really affect them anymore than anyone else.

Unless there's a connection from the media handling of the (wider) flu problem and the subsequent poltiical strife where the flu was actively reported.

I only have that one event followed the other.  I don't have causality. 

Of course, the other countries just prepared for a World War during the Spanish Civil War... so it wasn't like other countries experienced the best of times, either.

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HOLA447
13 minutes ago, MARTINX9 said:

Perhaps we will try to pretend this pandemic never happened and it will fade from public discourse and films or dramas in a decade or more?

Perhaps, it does have something of a "dream-like" quality - doesn't it?

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HOLA448
1 hour ago, MARTINX9 said:

It wasn’t really a Spanish flu anyway. It reportedly started in the US and France amongst soldiers packed in together in barracks.

Spain was just the first to report cases as they weren’t at war, had a free press and there was no censorship. 

It didn’t really affect them anymore than anyone else.

Despite the fact it killed more Brits and Americans than WWI it is strangely rarely mentioned or covered in movies or tv dramas. Indeed the only example I can think of is where it was used as a plot device to reunite Mary and Matthew in Downton Abbey - his fiancé died from it in the show.

Perhaps we will try to pretend this pandemic never happened and it will fade from public discourse and films or dramas in a decade or more?

sometimes nations want to forget, i have heard that about WW1

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HOLA449

There comes a moment when the bank of England runs out of ammunition to continue propping up house prices as it has done for 20 years, and lets the chips fall where they may.

It looks like that moment could now arrive. 

All the certainties that we've known for 20 years could be about to be swept away.

We can either hope the world returns to what it was, minimum wage slavery, or we can sit on the sidelines and wait to recalculate the odds in the new era. 

I wouldn't bet 25 years on no major change, which is what a mortgage means,  

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HOLA4410
16 minutes ago, 24gray24 said:

I wouldn't bet 25 years on no major change, which is what a mortgage means,  

Very few people are. What most people think is that there will be ups and downs, some even significant, but in the long run I am yet to meet anyone with a brought and paid for house who regrets their decision. My parents who now earn state pension plus a modest income from private pension funds I bet have a better standard of life in their brought and paid for house than their equivalents losing £xxxx a month in mortgage / rent payments before they've even started to think about a night out every now and again. Who doesn't need a bit of luck in life? Maybe I'll get cancer in 5 years, maybe world war 3 will start, but at the same time maybe it will all just be ok? Maybe in 25 years time, I will have finished paying any sort of rent or mortgage, and with on debt live in a nice house with £2k per month to do with what I will as opposed to my neighbour paying £1200 a month in rent until he's drops dead. If renting suits you and your personal circumstances, then have at it, and I really don't care - I'm not going to sit next to you at a dinner party and boast about how much my house is worth. However, I defy you to suggest that anyone taken 25 years into the future and asked to pick between a fully paid off house or continued renting would choose the later. 

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HOLA4411
3 hours ago, 24gray24 said:

There comes a moment when the bank of England runs out of ammunition to continue propping up house prices as it has done for 20 years, and lets the chips fall where they may.

It looks like that moment could now arrive. 

All the certainties that we've known for 20 years could be about to be swept away.

We can either hope the world returns to what it was, minimum wage slavery, or we can sit on the sidelines and wait to recalculate the odds in the new era. 

I wouldn't bet 25 years on no major change, which is what a mortgage means,  

We are not even close to that. House prices may well and probably will fall but it won't be because the BoE has run out of money. 

The BoE is now locked into years of money printing, it could go on for 20 years.   

 

 

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HOLA4412
9 hours ago, Twenty Something said:

However, I defy you to suggest that anyone taken 25 years into the future and asked to pick between a fully paid off house or continued renting would choose the later. 

Spot on it’s all about security and achieving a soft landing - over borrow , stretch and generally enjoy life when your younger then aim to have minimum overheads as you approach a more fixed income retirement. Renting is simply not compatible with that.

Its a bit of a universal truth applies in business as well - my business beggared ourself to buy our own office in 2006 and as we completed in 2007 remember the bank manager saying not great timing lads !

Our mortgage payment was our rent but to ourselves - got about a £100k left on modern office freehold of nearly 3000 sq ft. We can adjust the ‘rent’ to ourselves if need be - compare that to people begging their commercial landlord for a break 

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HOLA4413
16 hours ago, Belfast Boy said:

Really? OK… at this moment health... soon, (un)employment... soon after, loss of wealth. The everything bubble is going to unwind. You must not read this forum much :P

I would add to that draconian loss of privacy, freedom of speech and civil liberties.

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HOLA4414
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HOLA4415
4 hours ago, The Spaniard said:

This website is arguably a bit fanciful, but nevertheless pertinent to your perceptive comment.

"A bit fanciful"? I might have to put that forward for an understatement award!

The site appears to be putting forward a very science-fiction, cyberpunk view.  I've no objection to it existing, but I don't find it helpful.  I agree that our bizarre situation, despite feeling entirely artifical, is being used by various parties (perhaps everyone) for other motives.  The justification for every extraordinary measure can only be taken "on faith"... There are allusions to scientific knowledge - but, in fact, this is technocratic influence on politics.  The judgements, for example, between freedoms and mitigation of biological threats can not be scientific - because there can be no way to meanifully, empirically, test the consequences.

I have noticed that there's a prominent demographic, who seem to hold a lot of sway, who have some pretty peculiar ideas (and/or behaviours) relating to this domain.  I'm thinking here about the likes of Gates, Besos, Musk - et al.  Their interests seem to be seved pretty well in this new reality - don't they?

Edited by A.steve
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HOLA4416
20 hours ago, Twenty Something said:

What if the majority on this site are wrong, and things maybe have a slight wobble for a year or so...

Am I of the opinion that there is so much vested interest in maintaining the status quo that things won't be allowed to go that wrong?

It would still be prudent to wait a year and see, before indebting yourself for the rest of your working life.

Your argument seems to be that it is better to get a mortgage now because it will be more difficult in a years time and house prices will remain high. Please explain to me how house prices will remain high if it becomes more difficult for everyone to get a mortgage? Surely those 2 things are mutually exclusive?

I learned a new term yesterday 'Mortgage Prisoner'.

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HOLA4417
3 hours ago, A.steve said:

I have noticed that there's a prominent demographic, who seem to hold a lot of sway, who have some pretty peculiar ideas (and/or behaviours) relating to this domain.  I'm thinking here about the likes of Gates, Besos, Musk - et al.  Their interests seem to be seved pretty well in this new reality - don't they?

Careful, you might annoy the conspiracy-phobes. ?

But yes, repeated mandatory vaccinations, global dominance of retail commerce and supplying the satellites for the ubiquitous 'internet of things' will generate trillions in revenues. Thank goodness the motivations of these fine people are wholly humanitarian!

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HOLA4418
28 minutes ago, Belfast Boy said:

It would still be prudent to wait a year and see, before indebting yourself for the rest of your working life.

Your argument seems to be that it is better to get a mortgage now because it will be more difficult in a years time and house prices will remain high. Please explain to me how house prices will remain high if it becomes more difficult for everyone to get a mortgage? Surely those 2 things are mutually exclusive?

I learned a new term yesterday 'Mortgage Prisoner'.

Then you have missed the crux of my reasoning completely. I cannot wait a year due to planned life changes (starting a family), and the fact that I am approaching my mid 40's (bye bye mainstream 25 year mortgage term). I also have said that I expect that prices are going to fall in the short to medium term, so I don't expect prices to remain as they are, although they will still be 'high' I guess in the context of the past. My argument for no huge drama in my case is that I am buying in a reasonably affluent area of London. There are a lot of people who will not be affected in the slightest by the ongoing COVID-19 drama, or who have already paid off all / large amounts of their mortgage.

When you are finished with your crystal ball, can you lend it to me? I have been waiting since about 2005 when I first joined this site for 'the crash', and as I have said on multiple replies, I'm not waiting any longer. We could go round and round about what if this, what if that, but I am pretty certain that any downside is going to be short term and recover within 3 years for my part of the world. Besides, my mortgage payment is about £100 a month more than my rent payment, so what real difference does it make to anything? Yup, interest rates could go up of course, but if I am right and they stay reasonably steady for the next two years, then I'll look for a 5 or 10 year fixed rate and get on with my life. 

It will become more difficult for some people to get a mortgage, but not everyone. Those with LTV's of 60% or better will still find it very easy to get a mortgage. I'm not blind to the risks, but there comes a time in life I think where you just go to hell with it. I have no control over what the economic future holds, and I'm done with waiting. 

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HOLA4419
On 02/05/2020 at 13:10, Twenty Something said:

it'll be interesting to revisit posts like this in a decades time and see if it was the right or wrong decision. I strongly suspect I won't begrudge being halfway through a mortgage on a London house whatever happens to prices in the short to medium term...

If London prices drop 50% you won't be halfway through a mortgage in a decade's time, you will be in negative equity.

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HOLA4420
1 hour ago, The Spaniard said:

Careful, you might annoy the conspiracy-phobes. ?

In this case, I'm not hinting at any conspiracy (though I'm sure they do happen...)  Rather, I've noted that personal (economic) objectives may bias the intuition of certain demographics.  I don't think of that as being a controversial idea.

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HOLA4421
Just now, A.steve said:

In this case, I'm not hinting at any conspiracy (though I'm sure they do happen...)  Rather, I've noted that personal (economic) objectives may bias the intuition of certain demographics.  I don't think of that as being a controversial idea.

More like a truism, I would think.

So when a whole raft of globalist multi-billionaires all benefit hugely from the same events then perhaps it is no more than a coincidence. Phew, imagine if it wasn't ...

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HOLA4422
Just now, The Spaniard said:

More like a truism, I would think.

So when a whole raft of globalist multi-billionaires all benefit hugely from the same events then perhaps it is no more than a coincidence. Phew, imagine if it wasn't ...

Small group of people want to get insanely rich are we talking about the Greeks , Romans ? Conspiracy or similar interests ? 

They actually don’t have to be actively doing much apart from going along with it 

 

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HOLA4423
15 minutes ago, Dorkins said:

If London prices drop 50% you won't be halfway through a mortgage in a decade's time, you will be in negative equity.

Yup, and if they go up by 50% then etc etc. Should I never buy because there is uncertainty in life!? How would you ever leave the house if you thought like that? At present, I can easily afford the mortgage, it's about 4 x joint salary that we're borrowing, we've found a house we love, and I want to get more security than paying rent to a landlord provides (school catchment areas, not being kicked out because he's moving back to the UK etc etc). 

I think here lies the crux of the issue. People on this site think very financially in terms of purchasing a house. It is an investment, there is a game to be played through analysing indices and trying to predict the future. A lot of the housing market is driven however by sentiment. I'm not going into this with a business mind, I'm going into it more from the emotional side, and I think this is how the vast majority of people act. Yes I have done my maths, I have budgeted for interest rate rises, one of us losing our job, the boiler needing repair etc etc, but there comes a point where you can plan no more. It's like the new BMW that loses 10% of it's value the second it leaves the dealership - does it stop people buying new BMW's? No. They understand they will lose money, but they don't care as the emotional side of owning a flashy car is what they want. New build houses are another one - fall in price the minute you turn the key in the front door, but people are still buying them in their masses. You get the idea. I'm not bothered about being a property millionaire, and even taking a ridiculous suggestion that prices in London might drop 50% in 10 years, well actually, yes I will be halfway through the mortgage as we are planning on overpaying, and we have a bit of money coming our way in a few years anyway off the back of a personal agreement. So I still break even even in a catastrophic scenario such as yours. 

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HOLA4424
1 hour ago, Twenty Something said:

Then you have missed the crux of my reasoning completely. I cannot wait a year due to planned life changes (starting a family), and the fact that I am approaching my mid 40's (bye bye mainstream 25 year mortgage term). I also have said that I expect that prices are going to fall in the short to medium term, so I don't expect prices to remain as they are, although they will still be 'high' I guess in the context of the past. My argument for no huge drama in my case is that I am buying in a reasonably affluent area of London. There are a lot of people who will not be affected in the slightest by the ongoing COVID-19 drama, or who have already paid off all / large amounts of their mortgage.

When you are finished with your crystal ball, can you lend it to me? I have been waiting since about 2005 when I first joined this site for 'the crash', and as I have said on multiple replies, I'm not waiting any longer. We could go round and round about what if this, what if that, but I am pretty certain that any downside is going to be short term and recover within 3 years for my part of the world. Besides, my mortgage payment is about £100 a month more than my rent payment, so what real difference does it make to anything? Yup, interest rates could go up of course, but if I am right and they stay reasonably steady for the next two years, then I'll look for a 5 or 10 year fixed rate and get on with my life. 

It will become more difficult for some people to get a mortgage, but not everyone. Those with LTV's of 60% or better will still find it very easy to get a mortgage. I'm not blind to the risks, but there comes a time in life I think where you just go to hell with it. I have no control over what the economic future holds, and I'm done with waiting. 

 

9 minutes ago, Twenty Something said:

Yup, and if they go up by 50% then etc etc. Should I never buy because there is uncertainty in life!? How would you ever leave the house if you thought like that? At present, I can easily afford the mortgage, it's about 4 x joint salary that we're borrowing, we've found a house we love, and I want to get more security than paying rent to a landlord provides (school catchment areas, not being kicked out because he's moving back to the UK etc etc). 

I think here lies the crux of the issue. People on this site think very financially in terms of purchasing a house. It is an investment, there is a game to be played through analysing indices and trying to predict the future. A lot of the housing market is driven however by sentiment. I'm not going into this with a business mind, I'm going into it more from the emotional side, and I think this is how the vast majority of people act. Yes I have done my maths, I have budgeted for interest rate rises, one of us losing our job, the boiler needing repair etc etc, but there comes a point where you can plan no more. It's like the new BMW that loses 10% of it's value the second it leaves the dealership - does it stop people buying new BMW's? No. They understand they will lose money, but they don't care as the emotional side of owning a flashy car is what they want. New build houses are another one - fall in price the minute you turn the key in the front door, but people are still buying them in their masses. You get the idea. I'm not bothered about being a property millionaire, and even taking a ridiculous suggestion that prices in London might drop 50% in 10 years, well actually, yes I will be halfway through the mortgage as we are planning on overpaying, and we have a bit of money coming our way in a few years anyway off the back of a personal agreement. So I still break even even in a catastrophic scenario such as yours. 

So it's a 4x joint salary mortgage which you could easily pay on your frontline NHS wage alone to buy a 4 bed detached house in an affluent London suburb and the mortgage is only £100 more than your current rent payment? It all seems a bit too good to be true... Is there some big wodge of cash going into this that makes these numbers all work?

50% off current prices in London is far from catastrophic, given London wages houses would still be expensive even at that price. 70-80% down is what it would take to put London house prices back in touch with London wages.

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HOLA4425
3 minutes ago, Dorkins said:

50% off current prices in London is far from catastrophic, given London wages houses would still be expensive even at that price. 70-80% down is what it would take to put London house prices back in touch with London wages.

I mean, it really is catastrophic for lots of people. Anyone who bought in say the last 10 years with a huge deposit borrowed from family and friends.

£400,000 flat with £80,000 deposit, £60k of which came from family and friends.

Prices drop to £200,000, even if they want to upsize, they still owe a feckload in negative equity, even after amortisation.

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