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How Long Will It Take Before You Bears Admit


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Guest pioneer31
This is a serious questions and not bear baiting...

Cuz in my two area of expertise (south London and Bristol/Somerset) things have really picked up... there are SOLD signs everywhere... agents telling me it's busy... and house are moving.

ta ta

H

what do you expect them to say?

"Business is terrible, I'm going to have to pack this lark in and do something else for a living?"

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The sales in December were abysmal. Naturally any increase in sales in the subsequent months will be considered a positive growth. But we need to look the historical sales, comparing the sales during this time period over the last few years. This, I honestly do not believe, has increased much. Estate agents are ever optimistic, otherwise, they would not be in business.

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This is a serious questions and not bear baiting...

Cuz in my two area of expertise (south London and Bristol/Somerset) things have really picked up... there are SOLD signs everywhere... agents telling me it's busy... and house are moving.

ta ta

H

Have to admit there is some truth in this - have noticed plenty of sold signs up in my area of Bristol - though the EA's always look dead when ever I walk past and it still remains FAR cheaper to rent than buy .......

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Guest pioneer31
Have to admit there is some truth in this - have noticed plenty of sold signs up in my area of Bristol - though the EA's always look dead when ever I walk past and it still remains FAR cheaper to rent than buy .......

check (on nethouseprices) if the props have sold, or is this the old rouse of SOLD signs being replaced with FOR SALE a week later?

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Hannibal, loads of 'Sold' signs, on what sort of properties? Semi's? One Beds? Detached?

All of the above?

Would give us a clearer perspective.

Can't see how these sales are being generated. FTBs can't buy, priced out according to stats.

Is all very curious.

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check (on nethouseprices) if the props have sold, or is this the old rouse of SOLD signs being replaced with FOR SALE a week later?

will do - though it is probably too early for properties to have actually completed - suspect that properties are in a chain as the ones I have seen as sold over the last couple of weeks are 3 bed family homes in a area of mature home owners - so could possibly be downsizing ....

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it is true that some people say that the crash has already started. I admit that the statistics do not support this. However, the point that most people make is that the warning signs are there at the moment (high p/e ratios, weak dollar, low confidence, slowing consumer spending, higher taxes, upwards IR trend to name but a few).

No one really know what will happen or when it will happen but that the overall trend looks bleak.

What is happening in the EAs is not a barometer of the future state of the market.

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Guest Charlie The Tramp
THERE AINT NO CRASH?

True at this moment.

A local estate agent is offering a lot of his stock on the market for about six months, open to offers within a 20k, 25k, and 30k window on properties between 190k and 240k. I ask myself are these sellers desperate.

As we enter a period of economic uncertainty, normall economic forces will take their course.

Large price corrections do not happen overnight.

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Got involved in a massive debate about renting is cheaper than buying arguement lsat night. Does anyone here have any price comparisons that can prove this point?

I had to sit there for an hour and listen to how 'they' had bought a house and it now worth X blah blah blah.

I am getting sick of hearing this. Please can someone disprove that renting is not dead money? I know that it is a mindset thing but them numbers would sure help.

;)

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Dr H et al...

The key question still remains - regardless of a crash - why would a potential FTB want the stress and uncertainty of buying into the market under the present economic conditions, particularly when it is cheaper to rent than buy?

If you could even attempt to answer this question I will take far greater notice of your arguaments ......

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Would probably admit there is no crash if

1. The month on month falls were not happening (7 months) for at least 3 months.

2. The number of new mortgage approvals returns to historical levels

3. The current house price to earnings index returns to normal

4. Renting becomes more expensive than buying (my rent is 33 cheaper than the same interest only mortgage on what my landlord paid for the place)

5. Asking prices were actually achieved (currently over 7% below)

6. Market confidence returns

So there you go my 6 point plan to housing market recovery. Once you prove all 6 are fine I will admit there is no crash.

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Got involved in a massive debate about renting is cheaper than buying arguement lsat night. Does anyone here have any price comparisons that can prove this point?

I had to sit there for an hour and listen to how 'they' had bought a house and it now worth X blah blah blah.

I am getting sick of hearing this. Please can someone disprove that renting is not dead money? I know that it is a mindset thing but them numbers would sure help.

;)

The problem with the renting is dead money compared to buying is that it is true over the long term (say 15 years plus).

However the majority of people move home every 4 years or so in the initial stages of buying (eg 1 bed flat to 2 bed house to 3 bed family home)

The cost of buying and selling, plus the high interest costs in the early years of your morgage can really have an impact on your finances compared to renting unless capital gains are really high ... so in a stagnant or even worse a falling market renting can make sound economic sense compared with buying.

For example the first property I bought cost around 140k (and a further £8K to buy and sell .. stamp duty, morgage fees EA fees etc....yet I only paid off around £8K in mortgage repayments)! Fortunately the market rose a lot over the period so I made money ... but if it had fallen a few % I would be well out of pocket.

Save up as big deposit as you can to reduce the overall morgage dept by a large amount over the 25 year period, you will also not have the stress and uncertainty of a fairly dodgy economic climate and a possible crash in housing.

Plus you havent actually bought a house until you have made your final payment - you are basically renting from your mortgage company and in most cases on a repayment mortgage only paying of £200 ish a month of the debt in the early years. If its interest only you are just renting but with far higher stakes and exposure.

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Guest The dude
This is a serious questions and not bear baiting...

Cuz in my two area of expertise (south London and Bristol/Somerset) things have really picked up... there are SOLD signs everywhere... agents telling me it's busy... and house are moving.

ta ta

H

methinks this is not a serious question and is all about bear baiting.......by the way, the word is 'because' not 'cuz...how old are you? Eight?

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Bristol/Somerset) things have really picked up... there are SOLD signs everywhere... agents telling me it's busy... and house are moving

You've got to be joking?!! Theres more properties on the market in North Someret currently than there has been for a long time (and how many properties are reduced/new price on Hunters EA's for example?!! 2/3's+!!) - and in general very few properties are sold or under offer.

I agree tho that there market does seem to have picked up slightly this year in that price falls seems to have slowed, whereas I was expecting the falls to have started to gather pace instead.

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You've got to be joking?!! Theres more properties on the market in North Someret currently than there has been for a long time (and how many properties are reduced/new price on Hunters EA's for example?!! 2/3's+!!) - and in general very few properties are sold or under offer.

I agree tho that there market does seem to have picked up slightly this year in that price falls seems to have slowed, whereas I was expecting the falls to have started to gather pace instead.

Just checked on Rightmove - just put in Bristol in the search and looked at the listings for the last 14 days. 20 pages of property and NOT ONE sale listed in the last 2 weeks.

Is this the early spring bounce?

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Got involved in a massive debate about renting is cheaper than buying arguement lsat night. Does anyone here have any price comparisons that can prove this point?

I had to sit there for an hour and listen to how 'they' had bought a house and it now worth X blah blah blah.

I am getting sick of hearing this. Please can someone disprove that renting is not dead money? I know that it is a mindset thing but them numbers would sure help.

;)

I dont think you can generalise : it depends upon specifics. We've just brought a house (complete in March). We have been paying £650pcm for 3 bed appartment in Cheltenham. Cost to buy of the appartment would be about £220K-£240K.

This has enabled us to save for good deposit. Would £650 cover mortgage ? no, but the landlord owns this for long time, so minimal if any mortgage.

Depends how much mortgage you need also. So, renting is not dead money if you see it as a means to and end . Remember, you have to live and need a roof over your head.

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"How Long Will It Take Before You Bears Admit there ain't no crash"

Well crash is a very subjective term so I prefer the term correction and I believe a correction to the tune of at least 25% is in order.

Even the most bullish bull couldn't claim things are booming at the moment and we are currently kicking around the 0% HPI mark overall.

With inflation so low there just isn't the debt errosion of previous years so if nothing else we will be in the same precarious debt situation in 2 years time as now.

So in answer to your question.....IMHO.....If there hasn't been a sharp (>-10%)correction within the next 12 MTHS then I'd be tempted to say that there hasn't been/'ever be' a "crash" as such..........but I believe we'd be looking at the mother of all stagnations (~0%) for the next 5 years. Personally I would prefer "Crash" over that scenario.

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Got involved in a massive debate about renting is cheaper than buying arguement lsat night. Does anyone here have any price comparisons that can prove this point?

I had to sit there for an hour and listen to how 'they' had bought a house and it now worth X blah blah blah.

I am getting sick of hearing this. Please can someone disprove that renting is not dead money? I know that it is a mindset thing but them numbers would sure help.

;)

If you rented a home for approx the last 5-7 years compared to buying the same home, then it would fair to call that 'dead money'

But that is with the benefit of hindsight, because the housing market has boomed so much over that period

That would also assume that you sold that home last year and 'cashed out'

At the moment it is cheaper to rent than to buy, so currently renting is NOT dead money

Plus the majority of forward indicators suggest a HPC

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If you rented a home for approx the last 5-7 years compared to buying the same home, then it would fair to call that 'dead money'

But that is with the benefit of hindsight, because the housing market has boomed so much over that period

That would also assume that you sold that home last year and 'cashed out'

At the moment it is cheaper to rent than to buy, so currently renting is NOT dead money

Plus the majority of forward indicators suggest a HPC

My opinion is slightly different, but I'm still convinced it's better to rent than buy at the moment.

Renting is dead money, in that you'll never see it again. The same can be said for the interest portion of any mortgage. In fact IO mortgages mean you pay dead money for 25 years AND commit to repaying the full capital in one fell swoop after those 25 years. This is regardless of whether a property rises or falls in value in those 25 years. Renting is now cheaper than paying the interest on current house prices in most areas. So in fact renting costs you less dead money than buying. This money saved can also be used to earn interest or invested rather than be tied up and at risk as the deposit on a house.

I did a spreadsheet which compares renting and buying at current interest rates in this thread http://www.housepricecrash.co.uk/forum/ind...wtopic=5170&hl=. There are plenty of others scattered through similar topics on this forum.

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Got involved in a massive debate about renting is cheaper than buying arguement lsat night. Does anyone here have any price comparisons that can prove this point?

I had to sit there for an hour and listen to how 'they' had bought a house and it now worth X blah blah blah.

I am getting sick of hearing this. Please can someone disprove that renting is not dead money? I know that it is a mindset thing but them numbers would sure help.

;)

Use the search function on the forum. I've written aboutthis in tha past as have many others. One thing people ignore is the "fixer-up" model of making money has two side:

side 1 ) buy "fixer-up" for song, spend £100k to bring up to market value.

side 2 ) buy "fixed-up", don't do any renovations for 20 years, so house becomes "fixer-up". Now need to spend £100k to bring up to market value.

Nobody realises that in order NOT to have to spend £100k to bring up to market value, you have to be doing constant maintenance. The sheer man hours and materials involved over 20 years is probabbly therefore worth.....drum roll....£100k! So although people go on about houses going up over the long term, they neglect the fortune their house has cost them in new kitchens / carpets / other diy etc. They may not notice this drip-drip of costs, in fact many call it "invetsment" (a bit like calling a rights issue "investment" when really it is just plugging losses), but on my planet costs can never be equated to investment.

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Got involved in a massive debate about renting is cheaper than buying arguement lsat night. Does anyone here have any price comparisons that can prove this point?

I had to sit there for an hour and listen to how 'they' had bought a house and it now worth X blah blah blah.

I am getting sick of hearing this. Please can someone disprove that renting is not dead money? I know that it is a mindset thing but them numbers would sure help.

;)

Simple formula for Dead money spent on renting:

Money spent on rent - Money spent on IO component for the Market value of the house - value house has risen.

Example £250K house, £1000 on rent, I/O rate 5.25%

10% house growth: (12*1000)-(250K*5.25%)-(250K*10%) = -£26125

0% house growth: (12*1000)-(250K*5.25%)-0 = -£1125

10% house growth: (12*1000)-(250K*5.25%)-(250K*-10%) = £23875

No doubt you can complicate the formula more adding in maintainence/Stamp duty, changes in BOE rate etc etc etc....But the above is simple enough to empasise the point that it is the HPI that is the biggest exponent of the formula, i.e:

Renting is only dead money in a rising market, In a static to falling market Owning is dead money. The extent of each is directly propotional to HPI

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  • 440 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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