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My Work Colleages Are Scared


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I arrive at the staff resturant. I get gloated by my companies chief house price inflation cheerleader who just read a report that interest rates will fall to 4% by next year. I normally don't react but I wanted to test the water right now. I replied that it might happen but with inflation so high its not likely. Even if it did happen it wouldn't make any difference to mortgage rates, because they've risen faster than base rates have fallen. I was met with a look of disbelief and confusion as he could not see that the Bank base rate was not linked to mortgage rates. I tried to explain about LIBOR but he obviously did not understand and by now I was fighting to be heard amongst all the other peoples opinions. I tried to quote Halifax's 7.25% base rate as an example to show how rates are 2% above the BOE base rate but I was met with the statement of there being tons more lower rate mortgages out there. I said yes, but they are usually with high fees and even Nationwide have pulled their deals.

I then got gang attacked by 4 other people. One saying they had fixed their mortgage the other day and got a good rate of 6%. One saying they had just got a mortgage - moving house. ( I said bad move you should sell and rent) Another saying that I was 'throwing money down the drain' by renting and that houses are going on the market and selling the next day in Bristol. Another who said you are waiting for the right time to buy and you'll never buy because you will never afford to because you are wasting money renting and prices go only go up!

At this I almost despaired but it shows that either they are really thick, have their heads in the sand or are in the denial stage. The whole thing was really heated. I told them prices are falling just look at the stats. I then got asked how much MY rent was etc!!! I tried to tell them this is happening around your eyes, don't take my word for it read the news. All I got was the usual bull stories again. I gave up.

In short they still think I am totally mad or so they say but I think panic is setting in. Rather than say I am right after all they are continuing to trump their bull arguements?

Any analysis of this would be great. I wanted to let you know what the mindset seems to be of my local bulls, what do you think is going on here?

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I arrive at the staff resturant. I get gloated by my companies chief house price inflation cheerleader who just read a report that interest rates will fall to 4% by next year. I normally don't react but I wanted to test the water right now. I replied that it might happen but with inflation so high its not likely. Even if it did happen it wouldn't make any difference to mortgage rates, because they've risen faster than base rates have fallen. I was met with a look of disbelief and confusion as he could not see that the Bank base rate was not linked to mortgage rates. I tried to explain about LIBOR but he obviously did not understand and by now I was fighting to be heard amongst all the other peoples opinions. I tried to quote Halifax's 7.25% base rate as an example to show how rates are 2% above the BOE base rate but I was met with the statement of there being tons more lower rate mortgages out there. I said yes, but they are usually with high fees and even Nationwide have pulled their deals.

I then got gang attacked by 4 other people. One saying they had fixed their mortgage the other day and got a good rate of 6%. One saying they had just got a mortgage - moving house. ( I said bad move you should sell and rent) Another saying that I was 'throwing money down the drain' by renting and that houses are going on the market and selling the next day in Bristol. Another who said you are waiting for the right time to buy and you'll never buy because you will never afford to because you are wasting money renting and prices go only go up!

At this I almost despaired but it shows that either they are really thick, have their heads in the sand or are in the denial stage. The whole thing was really heated. I told the prices are falling just look at the stats. I then got asked how much MY rent was etc!!! I tried to tell them this is happening around your eyes, don't take my word for it read the news. All I got was the usual bull stories again. I gave up.

In short they still think I am totally mad or so they say but I think panic is setting in. Rather than say I am right after all they are continuing to trump their bull arguements?

Any analysis of this would be great. I wanted to let you know what the mindset seems to be of my local bulls, what do you think is going on here?

read my sig, you've got to 'laugh at you'. Keep the faith.

Damo

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Any analysis of this would be great. I wanted to let you know what the mindset seems to be of my local bulls, what do you think is going on here?

No Analysis needed.

Ask them 3 questions:

1) when was the last run on a uk bank before NR ?

2) why did the run on the NR happen ?

3) Are they f**king stupid ?

I'd be interested to hear answers to questions 2 and 3, i know then answer to 1)....2 i can guesss qand 3...well i think we all know the answer to than one :lol:, tell them to look investment bubbles, while they are at it, look up the Japan housing bubble and the dutch tuplip bubble, when they declare you a genius tell then to f**k off, you're not a genius, they're just stupid :lol:

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I think you are right, keep a low profile because its going to get ugly. Trouble is quite often they start the conversation with some story or other about house prices or IR's. I think I'll have to somehow change the subject.

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I think you are right, keep a low profile because its going to get ugly. Trouble is quite often they start the conversation with some story or other about house prices or IR's. I think I'll have to somehow change the subject.

Maybe I'm more aggressive than you are... but the way I see it is this. They know you're renting - and have thought this through... don't they think they're rubbing your nose in it? The tables have turned... whatever did these halfwits expect? It is at times like this that you find out what people are really like. Maybe not a time to gloat - but I'd not cower either... it isn't my fault that they hadn't the balls to rent - or that they made bad financial decisions. I certainly didn't force their hand.

My last office conversation about property (5 months ago...) got as far as "So you've bought?" (Big wide eyes - move back about a foot...) "Oh... N..O...O...O..." (with lots of head shaking.) No further questions...

;)

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Whenever this comes up at work with people who want to buy bigger houses later in life I try to get them to think of it in a positive way by pointing out that when prices drop, the scale of the rungs shrink and it will be easier for them to get that nice big family place. I figure if I can convert people they might just spread the message that lower prices are a good thing. You just have to conveniently skip the bit about loss of equity.

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Whenever this comes up at work with people who want to buy bigger houses later in life I try to get them to think of it in a positive way by pointing out that when prices drop, the scale of the rungs shrink and it will be easier for them to get that nice big family place.

I try that and the best way of explaining is with examples. My Parents are looking to sell there house and move. They are on at £170,000 and looking at a house at £220,000 - a £50,000 difference. They are nearly 50 and worried about taking out the extra money. They are getting a bit frustrated at all the bad news and reluctance of buyers. I managed to bring them Pro HPC with a simplistic 50% crash scenario (though poitned out it may or may not hit that low) oer 2 years. This would bring the difference down to only £25,000 and they would have an additional 2 years of sayings to put down aswell, possibly lowering the amopunt needed to £10,000.

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My rent is half the equity loss suffered by home-owners of similar properties - over the past 6 months.

Enough said.

I rent. Theres an identical house across the road.

As per rightmove and the property bee, its been reduced by half my ANNUAL rent since mid January.

Then again its gone up £120,000 since we moved in 10 years ago, thats about 40,000 more than my rent. Then again, they had a mortgage on it, paid for new windows and doors, had to pay for a flood damage, fences, boiler breakdowns, new kitchen and carpets and so on.

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THe first few words are the most telling - "STAFF canteen". What kind of industry is it? To be a bull you need to have a job. Cruel but true.

I had this situation at a wedding of all things recently. I normally act all 'not knowing' and won't be baited but ended up by saying "negative equity will be your only friend". AMAZINGLY the 2 bulls I was talking to DIDN'T KNOW WHAT IT REALLY MEANT!

Thing is - up until recently, they've been right and have only ever witnessed a boom. It'll be a REALLY REALLY HARD adjustment. It's like being a recently converted, baptised, confirmed Catholic and then Jesus coming back and telling you "Listen dude - Paul was a spawny Roman, I didn't rise from the dead - just be nice to each other mmmKay?"

They'd say it was a trick by the devil.

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Never underestimate just how scared people get when they suddenly realise that:
  1. Economics, mathematics and history weren't actually on their side, and

  2. They may soon have to actually work to make money :lol:

Go on a four day intensive first aid at work course, Pay attention to the treatment of burns, Shock and heart failure.

Your work colleagues may need your new skills in the near future ;)

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One of my workmates has just had an offer accepted, despite everything I have told him.

The house was on for 450k, he thinks 400k is a bargain because he saved 50k. I pointed out how much house prices dropped in the States and mentioned how the problems are worse here, so if he's happy to spend 100k over the odds because he can't wait a few years, then go ahead.

He already has a house which he intends to keep, and one in New Zealand where he is from.

He knows exactly what he is doing though. He's willing to do it to keep his soon-to-be wife happy. I suspect if he didn't, then it would be his soon-to-be ex :huh:

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In reply to the person that mocked him for his company having a staff canteen:

He said "Staff restaurant" not canteen and that doesn't necessarily mean he has a shit job. I happen to know Slaughter & May have two staff restaurants - one for staff and one for partners. I doubt many people would consider working for them to be a shit job.

In reply to the opening poster:

Don't be such a smug git :P

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In situations likes this, I always think, "Well, I did try and warn you." Let them toddle on their merry way thinking what they want to think, as you'll be vindicated in the end.

My feeling is that they know already - but cannot comprehend it, because house prices are always meant to go up.

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