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Fortunately for me I'm soon longer to be bored, having landed a better and more stable job so that I can replace my erratic consulting earnings with a salary working for an organisation in which I'm unlikely to have time posting grumpy posts on HPC.co.uk.

Consequently the wife's eyes are now anxiously scanning the property freesheet each week in the hope that she can find something in it which will soften my hitherto implacable renting stance.

After all, the landlord (who lives next door) is pissing us both off and my job-related excuse is now gone.

So should I relent? The target property would be a four/five bedroomed Victorian house in leafy Richmond/Kew/Twickenham or more realistically, Teddington. Will my capital be better employed in this pile or should it remain invested in BP's crumbling pipes?

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So should I relent? The target property would be a four/five bedroomed Victorian house in leafy Richmond/Kew/Twickenham or more realistically, Teddington. Will my capital be better employed in this pile or should it remain invested in BP's crumbling pipes?

You kind of lost me on that final bit..?

A 4/5 bed in Richmond/Kew would set you back, what, 500/600k min.? If you have that to invest, I wouldn't lock it all up in property - in fact I'd just carry on renting somewhere nice and see how things pad-out of the next year or so with rate rises. There is certainly no rush at this point in the housing cycle. Besides, I work freelance, and therefore 'get around' - I've seen many permies laid off at very short notice over the years, so I'd sit in your new job for awhile just to see how secure it turns out to be.

As for "BP's crumbling pipes?" - does that mean all you money is invested in oil stocks? If so, diversify.

Nomadd

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Guest Cletus VanDamme

So should I relent? The target property would be a four/five bedroomed Victorian house in leafy Richmond/Kew/Twickenham or more realistically, Teddington. Will my capital be better employed in this pile or should it remain invested in BP's crumbling pipes?

Well these areas are in my list of HPC-immune zones so if I was in your position, and had the money, I would say go for it.

I would imagine though that given you have the resources to afford a 4/5 bed house in Richmond/Kew (£1 million +?), you would be more likely to consult a trusted financial planner than strangers on an Internet forum!

Edit: Just noticed Marina has pipped me to the post on this! I guess my £1million off the top of my head guesstimate wasnt far out.

Edited by Cletus VanDamme
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If you buy now it will be no more 'invested' than it would be if you spent it on a car.

You would have said that 3 years ago. If you had bought a 4/5 bed Victorian house in Kew 3 years ago you'd probably have made 200k on it.

There is no guarantee of a crash no matter how many times you say it. And, as well as being an investment, unlike other investments, it gives you a roof over your head.

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Well these areas are in my list of HPC-immune zones so if I was in your position, and had the money, I would say go for it.

I would imagine though that given you have the resources to afford a 4/5 bed house in Richmond/Kew (£1 million +?), you would be more likely to consult a trusted financial planner than strangers on an Internet forum!

Edit: Just noticed Marina has pipped me to the post on this! I guess my £1million off the top of my head guesstimate wasnt far out.

Another b***dy post about HPC immune locations..Richmond,Surrey 1989 INDEX 156 1993 INDEX133.WHAT DO THESE HPC IMMUNERS KNOW THAT I DON'T KNOW.Or is it different this time.

Edited by crashmonitor
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You kind of lost me on that final bit..?

A 4/5 bed in Richmond/Kew would set you back, what, 500/600k min.? If you have that to invest, I wouldn't lock it all up in property - in fact I'd just carry on renting somewhere nice and see how things pad-out of the next year or so with rate rises. There is certainly no rush at this point in the housing cycle. Besides, I work freelance, and therefore 'get around' - I've seen many permies laid off at very short notice over the years, so I'd sit in your new job for awhile just to see how secure it turns out to be.

As for "BP's crumbling pipes?" - does that mean all you money is invested in oil stocks? If so, diversify.

Nomadd

In fact I'd need to raise a mortgage for a fair bit as well as using the capital.

I am diversified but probably a bit top heavy in oil.

Your view concurs with mine but not the wife's. If only I could handle the magnolia walls and the landlord.

Last time I was in Kew a few weeks ago and looked in an agent's window or two, 4/5 bed Victorian houses in leafy streets were about a million quid.

It does make you wonder how sustainable this is ... but, there again, every day someone buys one of them.

That's right, hence Teddington rather than Kew in truth.

Another b***dy post about HPC immune locations.THIS IS F***ing ME OFF.Richmond,Surrey 1989 INDEX 156 1993 INDEX133.WHAT DO THESE HPC IMMUNERS KNOW THAT I DON'T KNOW.Or is it different this time.

London's economy in relation to the UK's and the world's has undoubtedly changed since the early 1990s. I'd say semi-permanently.

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Move into a better rented house. WE have finally found one which is so lovely, we're actually considering buying it, once the market crashes of course, but in the meantime the landlord is abroad, we've decortated the kids bedrooms, the schools are nice and we have made ourselves at home for at least the next two years.

Up to you but we have waited this long we're not going to blow it now.

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Good Luck BTB. What do you mean you won't have time for grumpy posts. What am I going to do about my depression without posters like you. Get Prozac or something?

Foxy

I'm rather pleased by the unexpected idea that my grumpy posts can make someone less grumpy, but the real thanks is owed to those HPC posters who trot out the megabytes of cliched-ridden hackneyed half-truths and nonsenses which make the grumpy posts necessary.

They have saved me from boredom and you from depression.

Thanks, all. We salute you.

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London's economy in relation to the UK's and the world's has undoubtedly changed since the early 1990s. I'd say semi-permanently.

BTB, what is the rental yield for the areas/ types of property you are looking at? I'm of the impression that the relative savings that are to be made by renting in most the country aren't available in many areas of London. To me this implies that decent parts of London are less overpriced than the national average.

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You would have said that 3 years ago. If you had bought a 4/5 bed Victorian house in Kew 3 years ago you'd probably have made 200k on it.

There is no guarantee of a crash no matter how many times you say it. And, as well as being an investment, unlike other investments, it gives you a roof over your head.

True, but it can't go on forever. If it does there will eventually come a point where Richard Branson can't afford to buy a bedsit. Anyone with an elementary grasp of maths knows that the market is overpriced, and anyone with an elementary grasp of history knows that overpriced markets slump to the point of being underpriced sooner or later before the next boom can start. Only fear and sentiment is driving this market, nothing more. It's like a car that's run out of petrol... only its momentum is keeping it going, and that'll run out. All of the technical and fundamental indicators say 'overpriced', and so does Warren Buffet, the world's second richest man, who happens to have made his fortune from investing, so I think I'll trust his opinion over yours, thanks!

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BTB, what is the rental yield for the areas/ types of property you are looking at? I'm of the impression that the relative savings that are to be made by renting in most the country aren't available in many areas of London. To me this implies that decent parts of London are less overpriced than the national average.

Not sure. My missus says that the price point for the sort of house we'd like to buy is £2,500/month to rent. This equates to a say £540k IO mortgage, but to buy the same sort of house is probably kicking £650k. These are just crude figures, I haven't studied it closely because until now I've not even been in the position to think about it.

In this part of London housing is obviously still affordable, however. In Richmond, Twickenham and around the copious restaurants and pubs (which are not cheap) are always heaving, there are vast fleets of expensive new cars and the trains surge with oppulent commuters.

Perhaps you could knock up a full-sized working replica of the Deltic prototype and sell it for 2 million!

It would certainly be worth £2m of someone's money (although not mine) to reinstate the original to working order (although it wouldn't cost that much).

It's more than 50 years old now.

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Perhaps you could knock up a full-sized working replica of the Deltic prototype and sell it for 2 million!

It would certainly be worth £2m of someone's money (although not mine) to reinstate the original to working order (although it wouldn't cost that much).

It's more than 50 years old now.

I'm surprised noone's done it. If I were a wealthy enthusiast like Pete Waterman I would be happy to fund such a project.

Edited by Bingley Bloke
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True, but it can't go on forever. If it does there will eventually come a point where Richard Branson can't afford to buy a bedsit. Anyone with an elementary grasp of maths knows that the market is overpriced, and anyone with an elementary grasp of history knows that overpriced markets slump to the point of being underpriced sooner or later before the next boom can start. Only fear and sentiment is driving this market, nothing more. It's like a car that's run out of petrol... only its momentum is keeping it going, and that'll run out. All of the technical and fundamental indicators say 'overpriced', and so does Warren Buffet, the world's second richest man, who happens to have made his fortune from investing, so I think I'll trust his opinion over yours, thanks!

I'm not being funny but it sounds like you have brainwashed yourself.

'Anyone with an elementary grasp of Maths knows the market is overpriced' ... surely that would mean, by definition, that the majority of people do not have an elementary grasp of Maths and that people would not be buying property - or, is there a bit more to it than meets the eye?

Anyone with a grasp of history you say ... how firm is your grasp?

How many times in the last 100 years have house prices fallen in real terms?

It's a bit like shorting shares ... would you describe the general direction of house prices throughout history as up or down?

Fear and sentiment is driving the market you say. How do you know what is driving the market? Do you know why everyone with their house on the market today has it on the market? Death, divorce, job moves, bigger house because of children, promotion at work allowing move up the ladder, getting old so selling big house to downsize, purchase of a property as an investment, purchase of a flat because fed up with renting ... what has fear and sentiment got to do with those decisions?

I read a biography of Warren Buffet once in which he admitted he was lucky with his first few investments - if they had not come good he would have gone down the pan like a million others.

His philosophy - find good companies with good management, buy shares in them and hold forever is great - if you have a load of cash to start off with. For the average Joe, it is useless advice. Not bad advice - just useless.

Edited by Marina
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I'm not being funny but it sounds like you have brainwashed yourself.

Hardly. I'm not one of the ones borrowing 5x or more my salary on interested only to get on the property ladder to get a piece of the action because 'house price only go up' when, in fact, on many occasions in the past they've gone down.

'Anyone with an elementary grasp of Maths knows the market is overpriced' ... surely that would mean, by definition, people would not be buying property - or, is there a bit more to it than meets the eye?

People are buying property because they are afraid that if they don't it'll go up further and they'll stand even less of a chance. They aren't buying it because it's a bargain, they're buying it because they fear that they won't be able to if they don't do it now.

Anyone with a grasp of history you say ... how firm is your grasp?

How many times in the last 100 years have house prices fallen in real terms?

Several times. And whether they fall in real terms or not, they certainly fall in terms of the salary multiples you have to borrow to get on the ladder. In the past wage inflation has accounted for some of this, but in the future, with so much outsourcing to India and cheap imported labour there isn't going to be the type of wage inflation that you're basing your agument on.

It's a bit like shorting shares ... would you describe the general direction of house prices throughout history as up or down?

I agree with any argument that house prices, in the very long term, go up, but if you look back over the last hundred years you'll see periods of growth punctuated by corrections. If you buy at a peak with a large low-interest loan you're extremely exposed to negative equity and a loan you can no longer afford to repay. It has happened before so don't try to use an argument that would only work if it hadn't.

Fear and sentiment is driving the market you say. How do you know what is driving the market? Do you know why everyone with their house on the market today has it on the market? Death, divorce, job moves, bigger house because of children, promotion at work allowing move up the ladder, getting old so selling big house to downsize, purchase of a property as an investment, purchase of a flat because fed up with renting ... what has fear and sentiment got to do with those decisions?

Of course there are many things driving the market but sentiment is a much bigger factor than you seem to realise. People are silly over assets... If the local furniture store knocks 50% off dining room furniture, everyone goes out and buy dining room furniture because it's a bargain... if the local car showroom knocks 50% off new cars, everyone goes out and buys a new car because it's a bargain... but people only want stock and property when the media is harping on about how well the market is doing, ie, when it is a rip-off. Usually they clamour to get a piece of the action and end up buying from pros who are selling out having realised that the market is peaking. It's the same every time. If the stock market or the property market had fallen 50% the media would be telling stories of doom and gloom and Joe Public would be put off, yet that's the best time to buy a bargain.

When the stock market, as an example, is doing really well, the media is reporting it hitting new highs, twentysomething FA at the high street bank in his Burton's trousers and black plastic Casio watch is telling Joe Public to get PEPs and TESSAs, they're all sucked in. The pros are dumping their stock, the market slumps and Joe Public loses half his shirt. He won't touch the stock market again having had his fingers burnt. He files stocks under 'gambling' and tells all the other Joe Publics not to go there. As the media starts telling woeful stories of how poorly the market is doing, the pros are all buying back in again but Joe Public won't touch it with a barge-pole. Near the next top the pros start selling out to Joe Public who's just finished licking his wounds from last time and riding on a new wave of optimistic hype. Needless to say, Joe Public loses the other half of his shirt.

If Mr Twentysomething Burtonstrousers at the local bank really knew what he was talking about he's be sat on a Yacht in the Bahamas trading from a laptop, not doing a £20K high-street bank job in a sh*t-hole from the pages of Crap Towns, yet Joe Public trusts him with his life savings. It's like the old shoe-shine guy story. By the time the information reaches Joe Public, it's wrong. This is why Joe Public never gets rich... because he listens to people who don't know what they're talking about, laps up spiel from estate agents, and trusts the media which is really nothing more than a loudspeaker for the government. He should ignore the hype, and the crowd, and do his own research. The best time to buy assets is when they're underpriced, but people, for some reason, want them more when they're overpriced than they do at any other time. They'd rather buy hype than buy value. This is what I mean by sentiment. When it comes to assets, Joe Public has a silly habit of buying high and selling low, because the highs are when he's brainwashed into feeling that an asset is a good buy and the lows are when he's brainwashed into avoiding it.

I read a biography of Warren Buffet once in which he admitted he was lucky with his first few investments - if they had not come good he would have gone down the pan like a million others.

His philosophy - find good companies with good management, buy shares in them and hold forever is great - if you have a load of cash to start off with. For the average Joe, it is useless advice. Not bad advice - just useless.

Sure, but $46BN doesn't all happen by accident. My point being that when someone so good at spotting value says the housing market is overpriced, I'd be more inclined to trust them than someone like you who thinks that the average house, at six times the average salary, isn't overpriced, when historically the average house price has ALWAYS corrected to roughly three times the average salary.

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Several times. And whether they fall in real terms or not, they certainly fall in terms of the salary multiples you have to borrow to get on the ladder.

You kind of skipped over Marina's point about it being rare to get real falls in price, with this comment. If you thought prices would correct via wage inflation rather than a drop in nominal price, this makes all the difference in the world to your decision to buy versus waiting. Unless you're an investor or speculator of course

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  • 442 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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