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Buffer Bear

The Sheeples Perspective

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Speaking with my husband's cousin this weekend. She wants to buy a btl with her brother. They are both in their twenties and neither own a home. She knows my views on the housing market but does not accept that there will be a correction. We haven't spoken about this issue for a while so I decided to ask her some basic questions to establish her knowledge base and determine any research she may have since undertaken. Her answers are as follows:

Has unemployment increased? NO

Have repossessions increased? NO

Have bankruptcies increased? NO

Has inflation increased? - NO

Have interest rates increased recently? - Bingo. She replied YES

I then asked by how much. Her response - 3%!! :o:unsure::blink::lol:

I haven't laughed so much in ages. I even told her that I would have to post our conversation on this forum I was so amused.

Edited for spelling!

Edited by Buffer Bear

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Tragically there are so many like her, haven't a clue and they don't realise the impact they are having by shooting themselve in the foot.

not that tragic IMO. It's her and others like her that allows this market to correct. If they were all mega clued up, un herdable, unpanicable, and knew what they were doing I would have been well and truly fcuked many cycles ago. Tis total muppets and their ilk that allow half muppets like myself to prosper.

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Speaking with my husband's cousin this weekend. She wants to buy a btl with her brother. They are both in their twenties and neither own a home. She knows my views on the housing market but does not accept that there will be a correction. We haven't spoken about this issue for a while so I decided to ask her some basic questions to establish her knowledge base and determine any research she may have since undertaken. Her answers are as follows:

Has unemployment increased? NO

Have repossessions increased? NO

Have bankrupticies increased? NO

Has inflation increased? - NO

Have interest rates increased recently? - Bingo. She replied YES

I then asked by how much. Her response - 3%!! :o:unsure::blink::lol:

I haven't laughed so much in ages. I even told her that I would have to post our conversation on this forum I was so amused.

I despair, I really didn't think there were people out there with so little common sense or awareness of financial matters.

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I despair, I really didn't think there were people out there with so little common sense or awareness of financial matters.

She has a first degree and masters as does her brother :unsure::o:blink::lol:

Edited by Buffer Bear

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Guffaw!

:lol:

Nothing like slating and dehumanising the "sheeple", especially when they were so dumb as to buy at the right time and most here were so bright and economically aware as to stay out of the market. They can't be that daft, because most have ended up in a much better situation than the perma bears that lurk on HPC.

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Guffaw!

:lol:

Nothing like slating and dehumanising the "sheeple", especially when they were so dumb as to buy at the right time and most here were so bright and economically aware as to stay out of the market. They can't be that daft, because most have ended up in a much better situation than the perma bears that lurk on HPC.

Yes - in the above mentioned case it is clearly due to financial and economic astuteness that the person is intending to enter the BTL market at this juncture. :rolleyes:

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Speaking with my husband's cousin this weekend. She wants to buy a btl with her brother. They are both in their twenties and neither own a home. She knows my views on the housing market but does not accept that there will be a correction. We haven't spoken about this issue for a while so I decided to ask her some basic questions to establish her knowledge base and determine any research she may have since undertaken. Her answers are as follows:

Has unemployment increased? NO

Have repossessions increased? NO

Have bankrupticies increased? NO

Has inflation increased? - NO

Have interest rates increased recently? - Bingo. She replied YES

I then asked by how much. Her response - 3%!! :o:unsure::blink::lol:

I haven't laughed so much in ages. I even told her that I would have to post our conversation on this forum I was so amused.

They probably think (like I'm sure many BTL'do) that if anything goes wrong they won't lose anything 'cause they'll be able to sue someone for misselling. Many BTL's don't realise that they are Investing in a risky highly geared investment. They don't understand thay are running a business which is likely to go bust along with themselves.

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What is her brothers opinion. Is he as willing as her. Is she hoping to go halves on a property needing modernising so that her brother can do all the work and she reaps the rewards (if any)

I don't meant to sound sexist but this is all to familiar on TV shows and every day life for that matter. The missus wants a house that requires a lot of hard work to make it how she wants. Guess who does all the hard work while the missus fuels him with cups of tea :D

It's crazy to btl before even owning a home themselves, imo.

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It's crazy to btl before even owning a home themselves, imo.

agreed - isn't that one of phil + krusty's favorite "ideas"

they call it mouseholding or somesuch ****** <_<

also, having a degree and a masters isn't indicative of anything, really

i know people with PhD's who don't understand that paying just the minimum payment on a credit card doesn't reduce the overall debt much... :blink:

Edited by gasket37

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Nothing like slating and dehumanising the "sheeple", especially when they were so dumb as to buy at the right time and most here were so bright and economically aware as to stay out of the market. They can't be that daft, because most have ended up in a much better situation than the perma bears that lurk on HPC.

I agree. "Sheeple" is a patronising term. Most people who have bought are better off and won't end up in trouble. They can afford their repayments and will do if interest rates go up quite a few more times, so they're hardly sheep.

Those who bought somewhere to live recently and overstrectched themselves may well end up in trouble, but if that happens they deserve our sympathy. After all, they've been the victims of a huge propaganda campaign.

As for the investors, they took their chances, and they have to accept whatever the market throws at them , good or bad.

Edited by NJP

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Those who bought somewhere to live recently and overstrectched themselves may well end up in trouble, but if that happens they deserve our sympathy. After all, they've been the victims of a huge propaganda campaign.

Now who's being patronising?! These poor unthinking victims deserve sympathy from those of us who are able to make informed decisions...sounds a little conceited doesn't it?

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Speaking with my husband's cousin this weekend. She wants to buy a btl with her brother. They are both in their twenties and neither own a home. She knows my views on the housing market but does not accept that there will be a correction. We haven't spoken about this issue for a while so I decided to ask her some basic questions to establish her knowledge base and determine any research she may have since undertaken. Her answers are as follows:

Has unemployment increased? NO

Have repossessions increased? NO

Have bankrupticies increased? NO

Has inflation increased? - NO

Have interest rates increased recently? - Bingo. She replied YES

I then asked by how much. Her response - 3%!! :o:unsure::blink::lol:

I haven't laughed so much in ages. I even told her that I would have to post our conversation on this forum I was so amused.

What is frustrating about all of this is that she will probably go out and buy somewhere with her brother, lay some cheap laminate, splash on some magnolia paint and decide 6 months later that she wants to sell up and go travelling. She will then be told by an EA that it is worth £40k more than she paid and subsequently go on and sell it. Then the next time you see her she will be asking you to explain why making £20k was such a bad idea again.

What is unfortunate about this housing boom IMO is that it has been the academics and economic savvy people that have lost out the most. Your builder/plumber/plasterer/electrician/painter&decorator has been earning fortunes as well as any moron with a paint brush and an addiction to property shows. These people have been earning 3 or 4 times what a lawyer/doctor/lecturer or small business owner have been earning. It is easy to intellectually put these people to the sword and there are no sound fundamental economic thoughts/research behind there actions but at the end of the day these people are now sitting on enough equity to cover any HPC and some are even semi retiring on their proceeds.

As for the academics and economists there denial and cautious approach along with a lack of building/DIY skills means they have been holding off on the property craze because it just never seemed sustainable. As a result they must hold on to their fundamnetal belief that prices will crash and that the bubble is already over stretched to stop themselves going mad. In the meantime house prices increase and Bob the Builder/Shazza the hairdresser down the road make another £50k.

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This is starting to sound very like the tech stock bubble, where everyone could get in on the action, even when markets peaked ill informed where filling their boots. When stocks dropped, not a problem, they will go up again. Then they dropped and dropped and dropped.

I know people who invested their life savings in Tech Stocks - every drop became a good chance to get in on the action - surely they can't drop anymore.

With stocks (unless you get credit or something) the worse that can happen is you lose your money. With a house you can lose a lot more - (Negative Equity).

The bubble will surely burst, but how bad can it be?

10% drop - is this a good time to buy?

20% drop - Wow, bargain prices.

30% drop?

40% drop?? Feeling confident??

50%+ No surely, it cant go this far or further??

Also the other point to bear in mind is if there is a 50% drop you will need to gain 100% to get back to where you were. (And this doesn't take into account inflation, interest payments, etc..)

At the end of the day, we really don't know what will happen.

Edited by Adrian Allen

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Earlier someone said builders plumbers etc etc have made all the money which is very true, but what is also true is that they still beleive the market is sound and will not take their money out, when they do realise it will be to late as property is illiquid and all their paper gains will be lost.

Simple.

I know many people like this who if they sold their BTLs put the money in the bank they could be very close to early retirement but all they are doing is buying more and leveraging themselves even further, its all going to end in tears.

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not that tragic IMO. It's her and others like her that allows this market to correct. If they were all mega clued up, un herdable, unpanicable, and knew what they were doing I would have been well and truly fcuked many cycles ago. Tis total muppets and their ilk that allow half muppets like myself to prosper.

We are brought up in a society, that doesnt question certain things, ie...leave it to the professionals...this goes along with doctors...religion(priests/fathers)...teachers....energy companies....etc,etc, also finacial Purchasers..... its not everyone for sure,but a lot of folk non the less feel that whoever is giving opinions will be truthful and correct.

This is installed from early age at school......good in ways but so detrimental in other hands....SCUMBAG EA,s and the like, imo.

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You have to take risks to make big money - true.

You also have to be aware that these risks come at a price, many people that are buying investment properties now have only considered the reward, not the risk.

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Has unemployment increased? NO

Have repossessions increased? NO

Have bankrupticies increased? NO

Has inflation increased? - NO

Have interest rates increased recently? - Bingo. She replied YES

I then asked by how much. Her response - 3%!! :o:unsure::blink::lol:

I haven't laughed so much in ages. I even told her that I would have to post our conversation on this forum I was so amused.

Let's look at this another way...

Has unemployment increased - yes, but the number of people in work has reached a record level (thank you immigration)

Have repossessions increased - yes, from historically low levels. We are nowhere near the peaks seen last time.

Have bankruptcies increased - yes, as a result of legal reforms which make it easier than before.

Has inflation increased - yes, to the dizzy height of 2.5 per cent.

Have interest rates increased - as above. But they are unlikely to increase beyond five per cent, with a strong chance of falls thereafter.

I get the feeling you would have given her much the same advice last year - and had she taken it, she would have missed the opportunity to make thousands.<_<

And as another poster said, why have the great minds of this site (generally) failed to make much headway during what has been an economic golden age?

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I know many people like this who if they sold their BTLs put the money in the bank they could be very close to early retirement but all they are doing is buying more and leveraging themselves even further, its all going to end in tears.

I keep saying this to my friends who have BTL'd - "there's nothing wrong with taking a profit". I'm trying to get across to them that any investment that makes a profit is a good one and that they should take profits even though they might not be the absolute most they could make. Indeed the risk premium goes up the longer they wait. Unfortunately my advice has recently been met by "You should get into Bulgaria as you're guaranteed to triple you money in two years". I have to feign poverty and say I can't afford the deposit in order to avoid a confrontation as I just can't be bothered any more to argue with someone who is a good friend but who is also clearly being stupid reckless but is utterly convinced about their "expertise and understanding" of the market.

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If they are in their 20's, could it be a case of well educated but no life expereince or common sense? <_<

Correct.

She is considering waiting until this time next year, which I have encouraged, with the caveat that she save extremely hard to increase any deposit. Hopefully, by then she will see real evidence that house prices are falling.

Let's look at this another way...

I get the feeling you would have given her much the same advice last year - and had she taken it, she would have missed the opportunity to make thousands.<_<

And as another poster said, why have the great minds of this site (generally) failed to make much headway during what has been an economic golden age?

I did give the same advice last year but she was not in a position to buy anyway. What is interesting is that although she does not believe prices will fall significantly, she actually told me that she has noticed reductions of between 3k-5k recently. Surely, this confirms that prices do not only go up. She is clearly having second thoughts otherwise she wouldn't be prepared to wait another year.

Edited by Buffer Bear

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not that tragic IMO. It's her and others like her that allows this market to correct. If they were all mega clued up, un herdable, unpanicable, and knew what they were doing I would have been well and truly fcuked many cycles ago. Tis total muppets and their ilk that allow half muppets like myself to prosper.

you could not be more correct.

the fact the the market has gone up and away in the last few months , especially in london, is a good sign. before a crash all the stupid money must be drawn in. that way when it comes down it keeps going down ,as everyone who was stupid has no money and the wise just watch it fall.

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I keep saying this to my friends who have BTL'd - "there's nothing wrong with taking a profit". I'm trying to get across to them that any investment that makes a profit is a good one and that they should take profits even though they might not be the absolute most they could make. Indeed the risk premium goes up the longer they wait. Unfortunately my advice has recently been met by "You should get into Bulgaria as you're guaranteed to triple you money in two years". I have to feign poverty and say I can't afford the deposit in order to avoid a confrontation as I just can't be bothered any more to argue with someone who is a good friend but who is also clearly being stupid reckless but is utterly convinced about their "expertise and understanding" of the market.

No I think you have this wrong. I know a lot of people that simply buy, renovate and sell but single or at the most two properties at a time. As they go along they are piling their gains into the properties and by now a few years down the line are able to pay cash without need for a mortgage. The ones that have decided to let instead of sell and take the cash have increased the value of their house by 30-40% anyway by either buying a few years ago or following a well tried formula. How does this formula work? Well at its most basic level it involves a number of things.

1. Spruce up Kitchens cheaply by replacing just doors. Add a chrome extractor (about £70). Supply built in appliances (cheap white goods).

2. Spruce up bathroom by adding designer sink cabinet with glass bowl. Replace or paint tiles new trendy colour. Add chrome fixtures and if possible add powershower.

3. Paint all walls magnolia

4. Add false ceiling and spotlights in as many locations as possible. Dimmer system in lounge.

5. Lay laminate flooring.

6. Deck or gravel back garden. Add patio table and nice plants.

7. Paint front areas or if a flat spruce up communal areas.

8. If possible buy a 1 bed somewhere with large rooms and use the space and partition walls to make an extra bedroom.

I dont think they have failed yet and as such always have a 20-30% gain on the price they paid. So If there was a HPC they would more or less break even with these properties. Anyway most builders, plumbers etc are in the renovation game they aren't involved in this BTL portfolio business. By selling on they are literally making real wealth.

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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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