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I'm Smiling Through The Housing Crunch

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A year ago this week, I began paying off the biggest debt I've ever had. I'd borrowed five and a half times my salary over 30 years to buy the small terrace house in North London I now share with my partner.

Back then, a whole 12 months ago, I felt lucky. Our house had been on the market for only two hours when 10 couples bid for it. Somehow we scraped in ahead of them. And even though the price was astronomical - nearly £200,000 more than friends had paid for one round the corner 18 months earlier - I was grateful to my mortgage broker for bagging me the deal he did.

What a difference a year makes. High-risk mortgage packages like mine are history and new loans are down 70 per cent. The London property market's slumped, too, by about 10 per cent according to the most realistic estimates and yesterday the warnings were of a further 17 per cent fall in the value of our homes. The outlook could hardly be bleaker. Yet here's the funny thing: I still feel lucky. And not just because I love the house that cost me my shirt (and trousers) to buy. There are concrete reasons for my optimism.

For one thing, my home's value hasn't yet declined. Despite a year of ferociously negative hype, a lesser house in my street has just sold for more than we paid - even though they had to slash the asking price by £50,000 to tempt a buyer. The slump is real but we are still ahead.

And thanks to the recession, I'm paying back £300 a month less to Alliance and Leicester. My tracker mortgage follows the interest rate - when it falls, so does my repayment. Now trackers-have all but vanished and mortgages are costing around a grand more to take out. I'd never be able to afford my own house now.

Of course, they say the worst is yet to come. But I've done my sums. If the doomsayers are correct and I end up with a property worth £50,000 less than I paid for it, I still break even, because my only alternative was to continue renting.

That would have meant forking out the same amount for a smaller house with a dank basement, gloomy garden and a dangerously wonky boiler. Ask any Londoner struggling to get a foot on the property ladder - that's money down the toilet. So, in the worst case, I'll have lost no more money and gained a lot more quality of life.

The pessimists will call me crazy but as far as I'm concerned, my money's as safe as houses.

ha ha ha

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A year ago this week, I began paying off the biggest debt I've ever had. I'd borrowed five and a half times my salary over 30 years to buy the small terrace house in North London I now share with my partner.

Back then, a whole 12 months ago, I felt lucky. Our house had been on the market for only two hours when 10 couples bid for it. Somehow we scraped in ahead of them. And even though the price was astronomical - nearly £200,000 more than friends had paid for one round the corner 18 months earlier - I was grateful to my mortgage broker for bagging me the deal he did.

What a difference a year makes. High-risk mortgage packages like mine are history and new loans are down 70 per cent. The London property market's slumped, too, by about 10 per cent according to the most realistic estimates and yesterday the warnings were of a further 17 per cent fall in the value of our homes. The outlook could hardly be bleaker. Yet here's the funny thing: I still feel lucky. And not just because I love the house that cost me my shirt (and trousers) to buy. There are concrete reasons for my optimism.

For one thing, my home's value hasn't yet declined. Despite a year of ferociously negative hype, a lesser house in my street has just sold for more than we paid - even though they had to slash the asking price by £50,000 to tempt a buyer. The slump is real but we are still ahead.

And thanks to the recession, I'm paying back £300 a month less to Alliance and Leicester. My tracker mortgage follows the interest rate - when it falls, so does my repayment. Now trackers-have all but vanished and mortgages are costing around a grand more to take out. I'd never be able to afford my own house now.

Of course, they say the worst is yet to come. But I've done my sums. If the doomsayers are correct and I end up with a property worth £50,000 less than I paid for it, I still break even, because my only alternative was to continue renting.

That would have meant forking out the same amount for a smaller house with a dank basement, gloomy garden and a dangerously wonky boiler. Ask any Londoner struggling to get a foot on the property ladder - that's money down the toilet. So, in the worst case, I'll have lost no more money and gained a lot more quality of life.

The pessimists will call me crazy but as far as I'm concerned, my money's as safe as houses.

ha ha ha

Pray you never get made redundant then ....

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http://www.thisislondon.co.uk/standard/art...good/article.do

in an article she wrote last year, she also bought the house 12 months ago from dec last year and only fought of 4 buyers. Anyway you look at it she is a lier and cant be trusted

When we bought, this time last year, our Archway house was on and off the market in a matter of hours. We viewed it for 10 minutes in a conveyor-belt queue of couples, placed our bid a half-hour later, and discovered we'd fought off four other parties within the hour. That was typical of the rate property was shifting in London.

But even as we bought into the house-price hysteria, we knew it couldn't last. Across Britain, prices are predicted to fall by 12 per cent in the coming year.

so dear did you buy 12 months ago or did you buy 20 months ago? was it 10 couples or 4 couples? or are both articles lies? grr anyone fancy putting together a strongly worded letter about editorial standards and lieing?

Edited by moosetea

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We'll see quite a lot of this desperate self justification of a bad financial decision. "I'm happy in my little home" etc.

The fact remains that she must now spend half her working life paying back the money she has thrown away in the worst financial mistake of her life. It is much easier to convince herself that she is happy with what she's done rather than face the reality of the situation.

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We'll see quite a lot of this desperate self justification of a bad financial decision. "I'm happy in my little home" etc.

The fact remains that she must now spend half her working life paying back the money she has thrown away in the worst financial mistake of her life. It is much easier to convince herself that she is happy with what she's done rather than face the reality of the situation.

or is she... that could be another lie :P ?

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" I began paying off the biggest debt I've ever had. I'd borrowed five and a half times my salary over 30 years to buy the small terrace house in North London I now share with my partner"

The fact that anyone could be so stupid as to think about borrowing 5 times more than they earn to invest in a single asset is truly amazing to me.

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http://www.thisislondon.co.uk/standard/art...good/article.do

in an article she wrote last year, she also bought the house 12 months ago from dec last year and only fought of 4 buyers. Anyway you look at it she is a lier and cant be trusted

so dear did you buy 12 months ago or did you buy 20 months ago? was it 10 couples or 4 couples? or are both articles lies? grr anyone fancy putting together a strongly worded letter about editorial standards and lieing?

Ha well spotted moosetea, I think you should leave a little note in the comments section.

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Ha well spotted moosetea, I think you should leave a little note in the comments section.

done my man, along with a line on editorial standards :P what do you think will it get published?

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hmm. bit far from the truth in a bunch of ways

firstly, if she paid 200k more than a place round the corner, she must have paid in the region of at least 400k, probably more like 500k. probably scenario now, drop of peak-to-peak of at least 20% - we're already nearly at 10%. so surely 'if the naysayers are correct' she'll have lost £100k??

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I have to admit that if I were also in such an unfortunate position I would also be padding myself with as many of these delusions as possible.

It's the only way you can continue to function when a situation is bad.

She's offering her delusions to others to also use, perhaps in the hope that shared delusions are more comforting than sole ones.

She might as well have written 'close your eyes, put your index fingers in your ears and go la la la la la"

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I, and others have submitted comments on the article, giving Charlotte and Edwina, shall we say, an "alternative" view on their situations.

I expect that privately, they may not be smiling as much if they bothered to read and understand what I and others have said.

Now the crash has actually started, I was sort of thinking that my interest in all things HPC related would wane. Quite the opposite, now the crash is just getting going it interesting to see how those who thought there wouldn`t be a crash are now reacting. I can`t wait to see how Charlotte is doing in a couple of year`s time.

Plenty for us HPC`ers to "enjoy" still.

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Of course, they say the worst is yet to come. But I've done my sums. If the doomsayers are correct and I end up with a property worth £50,000 less than I paid for it, I still break even, because my only alternative was to continue renting.

wow. this prizeguy on the ball. shes got it 'all sussed out'

Edited by right_freds_dead

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If the story is true then we might have found the Gold Star STR winner. He's spent the last year making sure the landlord de-glooms the garden, de-wonkifies the boiler and raises the ceiling in the bedroom so the enourmous pile of cash can fit under the mattress!

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http://www.thisislondon.co.uk/standard/art...good/article.do

in an article she wrote last year, she also bought the house 12 months ago from dec last year and only fought of 4 buyers. Anyway you look at it she is a lier and cant be trusted

so dear did you buy 12 months ago or did you buy 20 months ago? was it 10 couples or 4 couples? or are both articles lies? grr anyone fancy putting together a strongly worded letter about editorial standards and lieing?

The multiple has changed as well. It was four and a half times now its five and a half times.

31.01.08

But I walked into this situation with my eyes open. My mortgage looks dodgy because I did what I had to do last year, when the property market was crazy - I took out a 30-year mortgage at four-and-a-half times my salary. I knew the day of reckoning was around the corner. If I have to cancel my gym membership to keep up the payments, so be it.
Edited by Cogs

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The multiple has changed as well. It was four and a half times now its five and a half times.

31.01.08

Pay cut?

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Pay cut?

I doubt the whole story really.

Her problems sound suspiciously like a "french cat", the animal invented purely for GCSE French because you can get more marks for writing about a pet than saying you don't have one.

I also find it remarkable she is on between 90 and 110k a year for writing that tosh.

Edited by Cogs

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I have to admit that if I were also in such an unfortunate position I would also be padding myself with as many of these delusions as possible.

It's the only way you can continue to function when a situation is bad.

She's offering her delusions to others to also use, perhaps in the hope that shared delusions are more comforting than sole ones.

She might as well have written 'close your eyes, put your index fingers in your ears and go la la la la la"

Everyone knows I am a fan of the Kubler Ross school of house price crash psycology. Of course its not linear and I would suggest our dear correspondent is experiencing a range of the responses:

Denial.

Anger

Bargaining

Depression

I really don't believe we have got here> Acceptance. I think that we won't be able to take that one on until she has lost at least 150K off the value of the house. Oh and by the way, London might be great in the good times but it is a serious shitehole during a depressed period (I was here in 1987 - it was friggin' miserable)

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"my money's safe as houses" How many people say that these days without wincing afterwards?

The houses are perfectly safe. It's the lenders and borrowers (and the whole economy for that matter) that are in danger :lol:

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  • 396 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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