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JonoP

May Be We Are All Wrong?

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Look at this article from the Times.

http://www.davidrowan.com/2002/08/times-ca...eally-make.html

It is for one of these fly-by-night-get-rich quick property investor schemes run by a certain Warren Borsje

I was looking at this because my GF used to work for him (she left for reasons of conscience)

However, the guy from the Times poo-poos the scheme, quotes lots of figures saying that house prices will not rise, bemoans the fact that loads of naive people will get burnt by BTL etc etc

Interesting thing is, the article is from 2002. Anyone investing in the scheme when this was written would have struggled NOT to have made a mint.

People have been prophesising the crash for many years now - but the arguments are fundamentally the same as we use today - and to date everyone has been wrong. Maybe property will be increase from 2007 to 2012 like it has for the last five years....

(personally I hope not as I am an FTB, but hey, pays not to be complacent)

Edited by Pond321

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This worries me too. It's all good and well coming onto HPC to get my daily 'bear-fix', but I keep flipping between 'it's all downhill from here' to 'maybe price will continue to rise for another 5 yrs'.

Edit to say: It's only when I see 'crash' headlines in 'The Sun' will I truely be confident it will happen. Sad, I know - but true.

I need some proper Bear News, come on folks I'm faltering!

Edited by stew

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They were talking about the BOE lowering interest rates on working lunch – all to help the slowing economy – timing is the thing – maybe they will keep it all going for another 5 – 10 years.

Must admit that’s one of the reasons I bought – just could not rent for that amount of time

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read this article too and was suprised by the date - 2002!!!

maybe we have all been wrong about the boom - it is longer and more sustained that any boom (not just of property but also of shares and things like that)

I'll continue believing that it is better to rent now than to buy -

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I'm worried that all the VI's & Government will keep the HPI up until the 2% inflation rise eventually matches house prices. :o

Edited: For spelling!

Edited by stew

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I think we've had a good time of it in terms of bear news this year. IR rises, house price growth waning, more people hoppin on the HPC Wagon, stock market turmoil etc.

Its a case now of being patient and analyzing the CML/Land Registry data each month.

I suspect HPI will go to pretty much zero next year. What isnt for certain is whether the BOE are going to stimulate it again by dropping the base rate again. I.e. Is this the end of the mini boom, or mega boom.

Dont be surprised if the CPI magically drops to a point at which IRs can be cut.

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Guest pioneer31

I'm more confident that the end is in sight than ever.

Why?

because the price falls are already happening.......they weren't in 2002,3,4,5,

IR highest for 6 yrs

inflation becoming glaringly obvious.

defaults and repossesions taking off.

and of course the credit crunch

So why the pessimism? How on EARTH could they keep prices rising for ANOTHER 5 yrs? There's nobody left to buy 'em!

Edited by pioneer31

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Look at this article from the Times.

http://www.davidrowan.com/2002/08/times-ca...eally-make.html

Interesting thing is, the article is from 2002. Anyone investing in the scheme when this was written would have struggled NOT to have made a mint.

Articles like that and others back in 2002, really made me think about not buying. But if you take a long term view of things, if you can afford to buy then it makes sense.

They were talking about the BOE lowering interest rates on working lunch – all to help the slowing economy – timing is the thing – maybe they will keep it all going for another 5 – 10 years.

Must admit that’s one of the reasons I bought – just could not rent for that amount of time

Exactly - you get caught in a cycle of waiting and waiting - if your in it for a home rather than purely investment then its best to just get on the ladder sooner than later.

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Guest pioneer31
I think we've had a good time of it in terms of bear news this year. IR rises, house price growth waning, more people hoppin on the HPC Wagon, stock market turmoil etc.

Its a case now of being patient and analyzing the CML/Land Registry data each month.

I suspect HPI will go to pretty much zero next year. What isnt for certain is whether the BOE are going to stimulate it again by dropping the base rate again. I.e. Is this the end of the mini boom, or mega boom.

Dont be surprised if the CPI magically drops to a point at which IRs can be cut.

So having announced that they will tackle inflation, you think they will do a U turn?

Inflation is here to stay for a while yet matey.

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In 2002 and the following years, the arguments for an HPC were based on logic, analysis and historic trends. Back in 2004/5 the bulls on this site laughed at the bears because of their 'charts and analysis' against the 'real world' of get-up-and-go savvy entrepreneurialism. The bulls were the market majority and were supported by industry VI's. HPI continued.

The bulls argued that there could not be a crash in the absence of a trigger. In their limited view this had to be a recession or a big rise in unemployment (confusing cause and effect).

We now have a very material trigger in the credit crunch, unforseen by the bulls. We also have precedent from the USA that things can crash further and faster than ever before (except for history's most notorios bubbles - tulips etc).

This is why bears were wrong then and have a better than ever probability of being right in the coming months.

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Guest pioneer31
You sure about that? :blink:

Well as my parents are currently STR's (they moved across the country) and are keeping a record of property prices in their neck of the woods on a daily basis.....YES. Some properties are being reduced. Most of the rest are holding still.

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Exactly - you get caught in a cycle of waiting and waiting - if your in it for a home rather than purely investment then its best to just get on the ladder sooner than later.

No , better to w8 until prices are 50% down.

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So having announced that they will tackle inflation, you think they will do a U turn?

Inflation is here to stay for a while yet matey.

If CPI stays below 2% next year for a while then yes. Remember this is the same institution that mistakenly cut them Aug 05.

And why did they do that? Because HPI was 0.

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People have been prophesising the crash for many years now - but the arguments are fundamentally the same as we use today - and to date everyone has been wrong. Maybe property will be increase from 2007 to 2012 like it has for the last five years....

It doesn't really matter to me any more. I've basically come to the realisation that I'll never be able to afford a house in this country, that this is no longer the land of my birth, and am beginning to look elsewhere.

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I'm worried that all the VI's & Government will keep the HPI up until the 2% inflation rise eventually matches house prices. :o

200% HPI will need 100 years to match house prices @ 2% inflation! Don't worry about the VI & Government BS. Just sit back, relax & save your pennies and if you have an hour spare watch this Boom & Bust video to see why Governments love boom & HPI and why they fuel it and how helpless they are to stop the bust in the end.

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Guest pioneer31
If CPI stays below 2% next year for a while then yes. Remember this is the same institution that mistakenly cut them Aug 05.

And why did they do that? Because HPI was 0.

I'll put money on CPI being above 2% for most, if not the whole year. Food inflation alone is here to stay

Edited by pioneer31

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200% HPI will need 100 years to match house prices @ 2% inflation!

Hopelessly pedantic of me, but it's actually more like 56 years if you allow for compound interest. Or 30 years at 4%.

Still a long time. :rolleyes:

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200% HPI will need 100 years to match house prices @ 2% inflation! Don't worry about the VI & Government BS. Just sit back, relax & save your pennies and if you have an hour spare watch this Boom & Bust video to see why Governments love boom & HPI and why they fuel it and how helpless they are to stop the bust in the end.

I'm not that hot on all this stuff, but doesn't the 2% inflation rise curve up on a graph. as it's 2% of the total, so it's not a straight line - with prices so high, each 2% is worth a great deal of cash.

Is this right?

Edited by stew

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Guest Shedfish
It's only when I see 'crash' headlines in 'The Sun' will I truely be confident it will happen. Sad, I know - but true.

Prepare for Nationwide impact

http://www.thesun.co.uk/article/0,,2005300...7400456,00.html

Average abode out of reach

http://www.thesun.co.uk/article/0,,2007410251,00.html

these can be found under * Money, which is just underneath:

* Have Your Say

* News

* Sport

* Bizarre

* Big Brother

* Prem Dream Team

* Video

* Movies

* X Factor

* TV

* £9.50 Holidays

* SFTW

* Virals

* Slideshows

* Ibiza Exposed

* Woman

* Dieting

* Real Life

* Mystic Meg

* Page3

* Sun Justice

* Go Green

* News of the World

* Motors

* Gizmo

* Superbabes

* Fun & Games

* Competitions

* Mobile

what a GREAT paper :lol:

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It is interesting that alot of the scepticism seems to be from people located in the South/London.

Here in the North West there are plenty of properties across all price brackets which are the same price as they were 2-3 years ago. The market seems fragmented. There are plenty of top end houses being knocked down and replaced with even bigger "mansions" (new property porn word) at prices in the £2-4 million range and the developers are clearly making a ton of money on them.

But there are also a lot of new-build properties which are not selling/falling in price. Not just flats. These are not the sort of places you would want to buy necessarily or bring up a family, but they are great for renting cheaply, taking money out of the BTL owners pocket and sitting it out. Zero risk.

I sold 3 years ago and my previous house has, at best, risen around 12% in 3 years. In a falling market a buyer would expect that 12% off the price straight away.

You might not be seeing all this in London yet, but it happening elsewhere for sure.

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Seems to me that if mortgage repayments are excluded from CPI when they can represent 50% or more of household budget, CPI figures aren't worth the paper they're written on. With that kind of sleight of hand, how can we trust CPI figures at all? Are they telling us anything to do with the real economy or are they just spin? How much is political manipulation and how much is trustworthy statistics?

Looking for reassurance (but not expecting any).

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I'm not that hot on all this stuff, but doesn't the 2% inflation rise curve up on a graph. as it's 2% of the total, so it's not a straight line - with prices so high, each 2% is worth a great deal of cash.

Is this right?

What I meant was current low 2% inflation means low pay rises and considering HPI is 200% since 1997 you would need many years to make up the difference & match the income to house prices. Remember low inflation is the enemy of 'inflated' debt and that's currently what we have.

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I think we've had a good time of it in terms of bear news this year. IR rises, house price growth waning, more people hoppin on the HPC Wagon, stock market turmoil etc.

Its a case now of being patient and analyzing the CML/Land Registry data each month.

I suspect HPI will go to pretty much zero next year. What isnt for certain is whether the BOE are going to stimulate it again by dropping the base rate again. I.e. Is this the end of the mini boom, or mega boom.

Dont be surprised if the CPI magically drops to a point at which IRs can be cut.

All the bear news to date hasn't stopped prices rising (and yes I know there are plenty on here who have been kidding themselves that prices are falling . . .).

But I agree with you Come On Down. We live in very uncertain times and government / central banks can ddo amazing things with a printing press and statistics - as we have seen since 2001.

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