Some More Random Thoughts

[Robbrent]

Random Thought 11. Having a chat today with someone, talking about House prices, told him I would be quite happy for the value of property (including my house) to fall by 50% or more, I paid 38k for it nice terrace on the Fylde coast, now going for 90k +, cue to look of incredulity, “What you want to lose money on your house” My answer of course not, but if all property in this area went back to it’s normal price I would not lose out, in fact I would be able to move up the ladder without too much of a stretch, the fact that house is valued at 90k is neither here nor there, as everything else has gone up by similar or greater amounts, it’s a point I try to make to many people, that unless you are prepared to STR or go and live under the arches, the so called wealth is imaginary.

Random Thought 12: Since the BTL mortgage was introduced, (I can only speak for my town) it has had the effect of reducing the waiting list for social housing as the majority of tenants here come from what can best be described as from a particular strata of society, but there is a sting in the tail, average rents in the BTL market are up to 70% higher than in social housing, so in effect we are subsidizing private enterprise an enterprise that has screwed up the market for many FTB’s I think it’s time FTB’s wrote to their MP’s and asked them if they support this.

Random Thought 13: Given that many BTL landlords have over leveraged, can we expect a domino effect of repossessions when it becomes obvious that the model does not work in a higher interest rate world (i.e. they start to go bankrupt) I don’t know how many but I hear that some used there own abode in order to finance their first property, so in theory when the dominos start to fall, they will take the landlords house as well, perish the thought.

Random Thought 14: Does anyone remember those seminars that were being plugged over the last few years you know make a million from property, I remember there was an Australian guy doing it, does anyone know what has happened to the shysters that were running them?

[othello]

You're onbe of the few people in the property game with their eyes open. Congratulations.

[Guest]

Speaking to an Italian chappy at lunch. He verbalised Random Thought 11.

With this display of intellect I predict Italy as the next superpower.

* EDIT: CUz it aint goona be us.

Edited June 14, 2006 by megaflop

[Robbrent]

I got the add blocker thing installed it works a treat, I might do it with TTRTR an d IMupneorth.

Yes thought 11, I wonder why people can't see that teh only people making money out of HI are the Vi's

[Realistbear]

HPI is a scam and unless you sell and move abroad where HPI has been absent there is no gain. The winners are:

1. The government in the form of stamp duty, death tax, council tax, cgt where applicable

2. EAs and their commissions

3. Banks through lending and repossessing when things get rough

4. Newspapers who sell property ad space

The losers are:

1. FTBs

2. Homeowners who paid more to the above winners

3. BTLers when the cycle turns

4. Renters who pay more because the houses cost more thus benfiting the winners

How to beat the system:

Buy low and sell high

[Without_a_Paddle]

HPI is a scam and unless you sell and move abroad where HPI has been absent there is no gain. The winners are:

1. The government in the form of stamp duty, death tax, council tax, cgt where applicable

2. EAs and their commissions

3. Banks through lending and repossessing when things get rough

4. Newspapers who sell property ad space

The losers are:

1. FTBs

2. Homeowners who paid more to the above winners

3. BTLers when the cycle turns

4. Renters who pay more because the houses cost more thus benfiting the winners

How to beat the system:

Buy low and sell high

So your message to us all today, RB is that we should turn to property flipping?

[Realistbear]

So your message to us all today, RB is that we should turn to property flipping?

If you own an investment property I would not advise "flipping" but selling and staying out until the market bottoms out. If you bought low there may still be time to sell relatively high--if you beat the rush. As RICS recent report advises: sellers are multiplying and affordability is threatening.