Jump to content
House Price Crash Forum
Sign in to follow this  
Mancghirl

Is It Me?

Recommended Posts

Eating lunch at work yesterday, the topic turned, as it often does, to HPI.

One of my collagues tried the old 'rent is dead money' tack.She couldnt understand why, on a decent salary, I wasnt sprinting to the estate agents.

I pointed out that the flat next door to me had gone up for sale for £150k, whereas I only pay £570/pm in rent, which includes a decent management service and instantaneous repairs.

She said it would be much cheaper to 'buy' on an IO mortgage. One of her friends and hubby have 'bought' a 400k house on IO with no repayment vehicle and are busy p*ssing their disposable income away on hols and St Tropez tanning sessions.

I pointed out that they had not bought their house, would never own their house and were in fact renting money from the bank. I further asserted that if one of them got ill or lost their jobs they would be royally screwed.

Oh no, she said, it would be fine, they would just pay off the mortgage by selling and therefore 'releasing the equity' in the house.

She didn't seem to understand that £400k mortgage and £400k selling price = no equity.

£400k mortgage and selling price>£400k = you are screwed.

Are people really this thick?

Share this post


Link to post
Share on other sites

Most of them, yes.

They've all been brainwashed by previous HPI and rampant inflation to inflate away debts that they haven't stopped to think....

Share this post


Link to post
Share on other sites

Alas, yes.

A friend of mine bought a place, did it up, and successfully sold it (apparently for more money, although no figures were mentioned) a year or so ago.

After that he moved to another, bigger, house, where he intends to do the same thing.

Except it turns out that this place (and, I'm guessing, the last place) is on an IO mortgage.

"It's a way of building up equity," he says - except if house prices don't keep rising above the costs of his renovations (and I might add, he appears to be steadily spending more and more money on fancier and fancier tatt) I don't think he'll be building up any further.

An awful lot of people don't seem to understand the concept that a mortgage has to be repaid at some point - they just think the house prices will go up through the roof forever and that wage inflation will do much the same, thus conveniently removing the problem.

Share this post


Link to post
Share on other sites

Well, since he hasn't given any figures it's hard to tell.

He did mention monthly repayments and he pays slightly less than me in rent, but having said that the place I rent is slightly bigger.

As for the rest of "them" - well, I guess it's a case of ask me in a few years.

Share this post


Link to post
Share on other sites

Yes but who has been right so far, you or them?

That Mr TTRTR is the pivotal question upon which the whole of this site hangs. I have frequently pointed out that this site cried wolf too early - some posters point to a sea of troubles and that they will eventually lead to a serious crash. Others are like those strange old nutters with a billboard proclaiming the end of the world is happening tommorow.

However even you must acknowledge that this all has to end with a bang at some point. I have friends on frankly rubbish wages with few career prospects being offered and taking morgages of 200K! Over the next 5 -10 years if rates rise by even 0.75% they are utterly screwed.

Share this post


Link to post
Share on other sites

Yes but who has been right so far, you or them?

Them for the lat 5 years,clearly!

But cycles cycle. Thats what cycles do. This something neuveax(?) rich(?????) investors fail, or refuse to understand.

This epitomizes the difference between bull and bear psychology.

Bears are all former bulls and are bears so they can be bulls again.

Bulls universally need there guts slashed out to understand this.

Share this post


Link to post
Share on other sites

Eating lunch at work yesterday, the topic turned, as it often does, to HPI.

One of my collagues tried the old 'rent is dead money' tack.She couldnt understand why, on a decent salary, I wasnt sprinting to the estate agents.

I pointed out that the flat next door to me had gone up for sale for £150k, whereas I only pay £570/pm in rent, which includes a decent management service and instantaneous repairs.

She said it would be much cheaper to 'buy' on an IO mortgage. One of her friends and hubby have 'bought' a 400k house on IO with no repayment vehicle and are busy p*ssing their disposable income away on hols and St Tropez tanning sessions.

I pointed out that they had not bought their house, would never own their house and were in fact renting money from the bank. I further asserted that if one of them got ill or lost their jobs they would be royally screwed.

Oh no, she said, it would be fine, they would just pay off the mortgage by selling and therefore 'releasing the equity' in the house.

She didn't seem to understand that £400k mortgage and £400k selling price = no equity.

£400k mortgage and selling price>£400k = you are screwed.

Are people really this thick?

PMSL!

"Rent is dead money"... whereas paying thousands in interest to the bank on a never-diminishing capital sum is a much more sensible way to spend your cash!

She's just renting the house from the bank. Only THEY don't pay for the repairs and upkeep like a landlord would.

What genious. No wonder we have such a crappy government if this is the level of intelligence of the average voter.

Share this post


Link to post
Share on other sites

Depending upon your age and any entitlement to live elsewhere, the ability to up sticks quickly may prove to be useful in the not to distant future.

There are some intense pressures building in the UK.

Our most recent history would seem to indicate that pressures have been, if not subdued, at least put on the back burner. For how much longer?

I'm trying to work out whether there really could be social breakdown leading to perhaps a form of civil war.

Sound far fetched?

It is perhaps too easy to assume such things couldn't happen in the UK.

Anyway, imo, IO, a nonsense without a repayment vehicle with a reasonable chance of providing the capital repayment.

Well, unless you want to be a chancer (or BTLer, leveraging away) and happy to go bankrupt if neccessary.

Share this post


Link to post
Share on other sites

That Mr TTRTR is the pivotal question upon which the whole of this site hangs. I have frequently pointed out that this site cried wolf too early - some posters point to a sea of troubles and that they will eventually lead to a serious crash. Others are like those strange old nutters with a billboard proclaiming the end of the world is happening tommorow.

However even you must acknowledge that this all has to end with a bang at some point. I have friends on frankly rubbish wages with few career prospects being offered and taking morgages of 200K! Over the next 5 -10 years if rates rise by even 0.75% they are utterly screwed.

Quite so.

Share this post


Link to post
Share on other sites

I guess thats why HPC is addictive, everyone is attempting to predict/deny the end of the uk economy, its fked up but its really interesting to watch...

Share this post


Link to post
Share on other sites

PMSL!

"Rent is dead money"... whereas paying thousands in interest to the bank on a never-diminishing capital sum is a much more sensible way to spend your cash!

She's just renting the house from the bank. Only THEY don't pay for the repairs and upkeep like a landlord would.

What genious. No wonder we have such a crappy government if this is the level of intelligence of the average voter.

Getting a I/O is worthwhile in a rising market as youv'e locked in your price. Renting is good in a falling market as you can buy for cheaper further down the line.

Share this post


Link to post
Share on other sites

It makes evil endowment mortgages look cuddly doesn't it? IO will turn into a blood bath, and I'm certainly not going to help fund 'compensation' for peoples' own stupidity

Yes but who has been right so far, you or them?

As the worker who fell off the top of the Empire State shouted to his colleagues half way down - "so far, so good!".

Edited by BuyingBear

Share this post


Link to post
Share on other sites

I might be a boring old *****? but when I bought my first House in 1982 you could only get two types of mortgage - Repayment or IO with an Endowment. For goodness sake what on Earth is happening? IO mortgages that people will never pay back and repayment mortgages at 8X earnings! Of course it's all going to go pop - it's just a question of when.

Share this post


Link to post
Share on other sites

Getting a I/O is worthwhile in a rising market as youv'e locked in your price. Renting is good in a falling market as you can buy for cheaper further down the line.

Agree:

I know someone that ‘won’ on an IO mortgage.

A chap I worked with moved up the property ladder when interest rates

dropped to 3.75%, not just one step... he stretched to his limit!!!

working all the hours god sends to pay when the rates moved up slightly.

He sold a year ago making a huge profit. (now a STR)

He told me that if IR went to 5% he would have been repossessed.

Some win some lose.

Share this post


Link to post
Share on other sites

I have friends on frankly rubbish wages with few career prospects being offered and taking morgages of 200K! Over the next 5 -10 years if rates rise by even 0.75% they are utterly screwed.

What do you mean by "rubbish wages"?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.