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It Is Friday And House Prices Are Supposedly Up Again


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As a survivor of the last crash let me give you some figures to chew on.

I lived with a friend in a 3 bedroom flat in Chiswick. He bought it for £110,000 in 1987. At the peak of the house price boom he had it valued (for MEW to fund a gap year) at £190,000 and indeed similar properties in the road sold for £190,000 in that year (1999/2000). But by the time he came to sell in 1991/2 he only got £105,000.

It was a flat, they will fall hardest if there is a correction. with interest rates as they are expect stagnation. Only EAs will be pushing up asking prices the next few months / years, selling prices are a different story

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As a survivor of the last crash let me give you some figures to chew on.

I lived with a friend in a 3 bedroom flat in Chiswick. He bought it for £110,000 in 1987. At the peak of the house price boom he had it valued (for MEW to fund a gap year) at £190,000 and indeed similar properties in the road sold for £190,000 in that year (1999/2000). But by the time he came to sell in 1991/2 he only got £105,000.

He only lost £5k but from the perspective of an overstretched borrower who bought in 1999 the value of their propertiy halved.

I haven't seen the graph recently but there was an image from the telegraph or somewhere that documented the falls in London, they were real and worst in places like Chiswick and below. Chelseas etc did quite well but places like Clapham, Stockwell and the gentrified rougher areas were slaughtered.

I was there, I saw it and lived it. Put an end to the no real falls myth.

I agree. I remember. Luckily I sold my small, first flat at a loss (bought 1989) and bought a bigger one in a better area in 1994 in the trough. It still feels very hard to see it happening like that again at the peak of another bubble though.

S.

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If you show the not-inflation-adjusted picture to people, I am sure that the overwhelming majority would use the old axiom "house prices never fall"... and they would have good reason to use that.

You really can't decouple inflation from the picture though. Although Inflation makes the picture harder to see, the reason house prices fall, or for that matter stop rising at 15-20% a year is for a reason mainly sentiment, credit availability and affordability. It is not like people got up one morning and said 'Look these houses are too expensive, lets now have them stagnate but we won't let the go negative in real terms". If things change now and the housing market goes into reverse then clearly at inflation of 3% then they are going to go negative in real terms. Things are different this time but mainly because this will be the first UK crash in a low inflation environment.

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I agree about flats, but this was a very nice victorian one in a 'highly sought after area witha splendid collection of local shops restaurants and transport links and other amenities' :lol:

As for it feels hard to imagine it happening again, when you re-bought in 1994 did you think a boom was begining? :blink:

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I agree about flats, but this was a very nice victorian one in a 'highly sought after area witha splendid collection of local shops restaurants and transport links and other amenities' :lol:

As for it feels hard to imagine it happening again, when you re-bought in 1994 did you think a boom was begining? :blink:

No, the price felt high (as it turns out it was historically low) but I could afford it. I am not sure I analysed that much then but no one thought a boom or bounce back was on the way.

S.

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Remind me, why do people buy houses again?

So that they won't have to pay rent in their twilight years...and in many cases to pass onto their children.

But I think the main reason for ftb'ers taking the plunge is the uncertainty of renting. I know a vast majority of tenants on these boards are lucky to have rented accomodation that they love...but check out residential rental forums (including hpc's) and you will see not everyone is as satisfied with renting.

I know i'd be hugely inconvenienced if I had to move every year or two.

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I think you should just get on with your life.

If you need to upgrade your house (for real life reasons.. like having a child)... then do it

If you need to sell (for real life reasons like taking a 3 year round-world trip)... then do it

If you need to buy, then buy

If you cannot afford to buy... then save.

and so on..

Well said scooter, you've saved me having to type out a post!

Couldnt agree more.

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If it is going to continue like this I am going to buy the biggest most expensive house I can and continously MEW the HPI to pay for my living and never work another day.

If I get a £300,000 house and I want a MEW income of 25k I only need about 8% HPI growth a year! Seems about the trend so should be easy to achieve. Might also spend my excess MEW income on some BTL and keep plowing it back in till I have millions and millions of BTL!

<evil Laugh> AH HA HA HA HA HA </evil laugh>

Obviously you don't need to work to be rich in a miracle economy.

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So that they won't have to pay rent in their twilight years...and in many cases to pass onto their children.

But I think the main reason for ftb'ers taking the plunge is the uncertainty of renting. I know a vast majority of tenants on these boards are lucky to have rented accomodation that they love...but check out residential rental forums (including hpc's) and you will see not everyone is as satisfied with renting.

I know i'd be hugely inconvenienced if I had to move every year or two.

Oh absoluuutely, of course OOs don't move house anywhere near that often. All stay put for 25 years.

Renters, of course, have soooo much hassle with moving - what with having to get the post redirected, get a van/lorry to move our stuff and... oh. That's it.

:lol:

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Oh absoluuutely, of course OOs don't move house anywhere near that often. All stay put for 25 years.

Renters, of course, have soooo much hassle with moving - what with having to get the post redirected, get a van/lorry to move our stuff and... oh. That's it.

:lol:

OOs only move when they want to, not when someone else decides to move them on.

Yes, that's all there is to moving house :unsure: You're obviously kidding yourself that you enjoy your nomadic existence.

This is why it's entirely sustainable for buying to be more expensive than renting.

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All you bulls are muppets!

Your saying prices never going down is like saying countries never go into recession!

This labour gov has done a great job of helping prop us up with massive personal and government debt but nothing lasts forever

I'm sure house prices went up when Brazil was borrowing big bucks to modernise its economy , now they can't even afford to keep up the debt repayments.

I'll tell you something else people might well want to live in Brazil even with a sh*t long term economy but who is goign to want to stay here in Britain and be unemployed/impoverished?

Bye bye any polish immigrant worth his salt, bye bye graduates, bye bye anyone with money/business acumen.

Hello HPC, but at what cost?

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Guest The_Oldie
Yes, that's all there is to moving house :unsure: You're obviously kidding yourself that you enjoy your nomadic existence.

Our years rental is up soon and the landlord wants to sell, so I sounded out the agent about staying there, until it sells, on a reduced price monthly rolling contract. The agent thinks that is quite a good idea, but my wife is not too keen as she is looking forward to living somewhere different, but will stay on for a few months if it's really cheap ie 30% reduction.

Having lived in one house for many years, we are enjoying a change and are planning to move every year just for the hell of it. We could easily afford to buy the house we're currently living in for cash by the way.

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Our years rental is up soon and the landlord wants to sell, so I sounded out the agent about staying there, until it sells, on a reduced price monthly rolling contract. The agent thinks that is quite a good idea, but my wife is not too keen as she is looking forward to living somewhere different, but will stay on for a few months if it's really cheap ie 30% reduction.

Having lived in one house for many years, we are enjoying a change and are planning to move every year just for the hell of it. We could easily afford to buy the house we're currently living in for cash by the way.

If you can pay cash why not take an offset mortgage and fix for 10 years and stick your savings in the offset account to offset any interest, You will then be borrowing at a nice low rate.

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Guest The_Oldie
If you can pay cash why not take an offset mortgage and fix for 10 years and stick your savings in the offset account to offset any interest, You will then be borrowing at a nice low rate.

No thanks :rolleyes:

Are you a mortgage broker by any chance?

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Our years rental is up soon and the landlord wants to sell, so I sounded out the agent about staying there, until it sells, on a reduced price monthly rolling contract. The agent thinks that is quite a good idea, but my wife is not too keen as she is looking forward to living somewhere different, but will stay on for a few months if it's really cheap ie 30% reduction.

Having lived in one house for many years, we are enjoying a change and are planning to move every year just for the hell of it. We could easily afford to buy the house we're currently living in for cash by the way.

Had you purchased the house (rather than renting it), you would now be moving at your convenience and banking the capital gains.

As it stands, a complete stranger has decided when you move and he gets to keep the profit.

Shrewd move, Oldie <_<

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Guest The_Oldie
Had you purchased the house (rather than renting it), you would now be moving at your convenience and banking the capital gains.

As it stands, a complete stranger has decided when you move and he gets to keep the profit.

Shrewd move, Oldie <_<

Please don't patronise me.

I am moving at my convenience, can you not read? Also, the houses in this location are advertised at similar prices to this time last year and no, before you ask, I have no intention of proving it to you.

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Please don't patronise me.

I am moving at my convenience, can you not read? Also, the houses in this location are advertised at similar prices to this time last year and no, before you ask, I have no intention of proving it to you.

First of all, I had no intention of patronising you.

From reading your post, I got the impression that you had renting this property for a number of years. You also said that your landlord wants to sell. whether that fits with your existing plans or not is largely irrelevant; even if you wanted to stay, you would still have to move.

That aside, you seem happy with the situation. And as you say, you're sitting on a large pot of money; not a bad position to be in.

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Guest The_Oldie
First of all, I had no intention of patronising you.

From reading your post, I got the impression that you had renting this property for a number of years. You also said that your landlord wants to sell. whether that fits with your existing plans or not is largely irrelevant; even if you wanted to stay, you would still have to move.

That aside, you seem happy with the situation. And as you say, you're sitting on a large pot of money; not a bad position to be in.

I would have thought that "Our years rental is up" was clearly one year. Had we wished to stay for two years, I would have signed a two year contract.

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The problem... is that if you look at the non-inflation-adjusted version of the graph from the front page, you will see that in the previous 'crashes', in general house prices didn't actually drop, instead they just slowed down. Certainly there was no plummet (in general).

So 'negative equity' is the figment of some people's imagination?? If the rubbish you're spouting were true, then there wouldn't have been hundreds of thousands of people in negative equity, would there? Believe me, it existed. And, to a huge number of people.

So, in my opinion, anyone who comes up with such an obviously unresearched statement is either a fool or a liar. I'll do you a favour and assume you're just a fool.

p

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As an ardent bear I'm afraid I have to concede that the market in the UK will never crash. Why? Because British people have an irrational belief in that owning a property id the most important thing in life. Therefore if IR's rise to 12 per cent brainwashed FTB's well get their parents to sell their kidney's in order to by a squalid rat infested over-priced shoebox at 20 times their annual salary!

I am sadly now content to rent for the rest of my life - there is no chance of FTB's getting on the "housing ladder" now in this country. But hey, why the stigma in renting. My wife and I can afford two tropical holidays a year we drive a new car and we don't go without! Come on Britain get real - owning a home is no the be-all and end-all. I just lie at social functions and pretend I'm a home owner. Anyway. I'm off to a country that's not so home-owner obsessed as soon as I can!

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If it is going to continue like this I am going to buy the biggest most expensive house I can and continously MEW the HPI to pay for my living and never work another day.

If I get a £300,000 house and I want a MEW income of 25k I only need about 8% HPI growth a year! Seems about the trend so should be easy to achieve. Might also spend my excess MEW income on some BTL and keep plowing it back in till I have millions and millions of BTL!

<evil Laugh> AH HA HA HA HA HA </evil laugh>

Obviously you don't need to work to be rich in a miracle economy.

evil_laugh.jpg

Edited by George
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As an ardent bear I'm afraid I have to concede that the market in the UK will never crash. Why? Because British people have an irrational belief in that owning a property id the most important thing in life. Therefore if IR's rise to 12 per cent brainwashed FTB's well get their parents to sell their kidney's in order to by a squalid rat infested over-priced shoebox at 20 times their annual salary!

I'm off to a country that's not so home-owner obsessed as soon as I can!

get out while you still can! I bought in Dubai nice studio 600sq 16th floor 5 star gaff @ ft 85k. Will do for me it's warm theres a pool and no crime! For work I will import bacon and sell it cheap to expats :lol:

mt1131558868.jpg

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