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Am I Imagining This!

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This week I had dinner with afriend who told me that about a year ago he purchased a new build house for £420,000.He has about £120,000 of deposit equity in the property.Thinking that he might downsize ,he has had the property valued and was told he should consider dropping the price by between £30,000 to £50,000 from the original purchase price.He was not bothered as he said he would hang on a bit until the price picked up!Oh yes and by the way the mortgage is an IO arrangement!

This tale fits in well with another friend of mine.He has 2 properties on IO mortgages.One he lets out which probally covers the rent as he purchased that one about 5 years ago and the other he lives in which he aquired in 2004.Again his total mortgages amount to £300,000.Mind yiou ,as he told me,he cant possibly loose as house prices will go up by 8% year on year!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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Mind yiou ,as he told me,he cant possibly loose as house prices will go up by 8% year on year!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Did you ask why?

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Warren Buffet might describe this phenomena as the natural trend when people are no longer buying value. IO mortgages fit the bill because they are paying off nothing for nothing. In the real world something for nothing does not exist hence IO mortgages in the miracle world of HPI. HPI is the anithesis of a value driven model.

Edited by Realistbear

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This week I had dinner with afriend who told me that about a year ago he purchased a new build house for £420,000.He has about £120,000 of deposit equity in the property.Thinking that he might downsize ,he has had the property valued and was told he should consider dropping the price by between £30,000 to £50,000 from the original purchase price.He was not bothered as he said he would hang on a bit until the price picked up!Oh yes and by the way the mortgage is an IO arrangement!

This tale fits in well with another friend of mine.He has 2 properties on IO mortgages.One he lets out which probally covers the rent as he purchased that one about 5 years ago and the other he lives in which he aquired in 2004.Again his total mortgages amount to £300,000.Mind yiou ,as he told me,he cant possibly loose as house prices will go up by 8% year on year!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I've had very similar conversations. It's a collective madness. If enough people tell you the sky is green you'll believe it too.

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I've had very similar conversations. It's a collective madness. If enough people tell you the sky is green you'll believe it too.

If enough people tell you Salt and Vinegar crisp packets are Green it might start to happen too... :D

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Warren Buffet might describe this phenomena as the natural trend when people are no longer buying value. IO mortgages fit the bill because they are paying off nothing for nothing. In the real world something for nothing does not exist hence IO mortgages in the miracle world of HPI. HPI is the anithesis of a value driven model.

Wait for the responses that say inflation will eat away at it ...

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Guest Bart of Darkness
If enough people tell you Salt and Vinegar crisp packets are Green it might start to happen too.

Aren't Walkers S&V packets green or am I hopelessly out of touch?

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Aren't Walkers S&V packets green or am I hopelessly out of touch?

They are now! :ph34r::ph34r::ph34r:

(Salt and vinegar was always blue and Cheese and Onion Green - this used to be a universally understood unspoken rule)

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Mind yiou ,as he told me,he cant possibly loose as house prices will go up by 8% year on year!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Hmmm. Wages seem to go up by about 3% year on year. If he is right about house prices then parhaps he would like to talk his way out of the fact that, if his theory is true, there will eventually come a day when Britain's richest person won't be able to afford a ground floor bedsit on a council estate.

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Warren Buffet might describe this phenomena as the natural trend when people are no longer buying value. IO mortgages fit the bill because they are paying off nothing for nothing. In the real world something for nothing does not exist hence IO mortgages in the miracle world of HPI. HPI is the anithesis of a value driven model.

Yes.. it's the greater fool theory. People stopped buying because of fundamentals but instead because they saw prices going up and assumed they could sell their houses for more to an even bigger mug. As Mr Buffett has also said, it's only when the tide goes out that you find out who's been swimming naked...

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if his theory is true, there will eventually come a day when Britain's richest person won't be able to afford a ground floor bedsit on a council estate.

Yeah but just think about how rich we'll all be. (edit - I'm in a sarcastic p1ss-taking mood today - not of you bingley)

As Mr Buffett has also said, it's only when the tide goes out that you find out who's been swimming naked...

:lol: That's why HousePriceCrash.co.uk hand out free cozzies when you join the site...

Edited by megaflop

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They are now! :ph34r::ph34r::ph34r:

(Salt and vinegar was always blue and Cheese and Onion Green - this used to be a universally understood unspoken rule)

You see, they're playing with our minds. :unsure::blink:

I'M NOT AN FTB, I'M A FREE MAN. (runs off down the beach chased by a huge bubble).

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You see, they're playing with our minds. :unsure::blink:

I'M NOT AN FTB, I'M A FREE MAN. (runs off down the beach chased by a huge bubble).

He he he... thats a good line. "I'M NOT AN FTB, I'M A FREE MAN. (runs off down the beach chased by a huge bubble)." :lol:

:blink: Just had a revelation... was "The Prisoner" also about the houseing market?

Wasn't he force to live in flatpack accomodation and work his way up the pyramid scheme?

Edited by coolaftershave

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I'M NOT AN FTB, I'M A FREE MAN. (runs off down the beach chased by a huge bubble).

:lol::lol::lol: I like it! I must remember this one!

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You see, they're playing with our minds. :unsure::blink:

I'M NOT AN FTB, I'M A FREE MAN. (runs off down the beach chased by a huge bubble).

I am going to have a T-Shirt made up with that slogan.

he he he... things to email your friends.. and advertise this site? Approved?

bubble.jpg

rehpc.jpg

post-3448-1139580470.jpg

post-3448-1139580487.jpg

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I am going to have a T-Shirt made up with that slogan.

he he he... things to email your friends.. and advertise this site? Approved?

bubble.jpg

rehpc.jpg

nice work Afterburn. I want a % of the T-shirt sales! :)

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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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