200,000 buy-to-let investors lose up to 90% of their cash

carolt

Gorgeous_George wrote: »

If houses down South lose 50% of their value, say £100K, similar houses in the North will have lost 30% or £30K IMHO.

But that is not the point. The North is every bit as beautiful as the South. Many fishing villages on the NE coast for example would be worth millions if they were in Cornwall. Sometimes, stereotyping and slanderous comments on Internet forums can have a negative effect that make places sound worse than they really are.

GG

I think you're over-reacting? Of course the north has loads of lovely bits, that's why loads of people from the south go up there for holidays - we honeymooned in the Lake District and have been back many times, went to the Peak District, where my OH is from last year, etc.

I'm sure no-one meant to diss half the country; obviously it's got it's dodgy bits, but then so has the south. Holiday in Croydon, anyone?

Pal

Generali wrote: »

It is factually correct. However, dividends typically make up 50% of the returns from an equity portfolio (depending on the sort of companies you invest in of course) so it is silly to ignore them.

You also cannot ignore the impact of gearing on housing. You cannot generally borrow to buy equities, but with houses you could (at least in theory and up until recently) buy the property with someone else's money (the banks) and get an investment that would pay off the mortgage interest while the capital value was growing.

IF you then sold, you have effectively made (in percentage terms) an infinite profit. Try plotting that on a graph!

Of course, those days are well and truely over.

The main difference is that most people live in their houses, an "investment gain" that is never properly plotted on the comparison graphs.

It is all random!!

Dithering_Dad

Pal wrote: »

You cannot generally borrow to buy equities, but with houses you could (at least in theory and up until recently) buy the property with someone else's money (the banks) and get an investment that would pay off the mortgage interest while the capital value was growing.

You could if you wanted to, the banks never really cared what anyone did with their mew's.

When I started the Mortgage Free in Three challenge (still going strong over on the MFW board), we had a lot of people coming over there telling us we were mad to be paying off the 'cheapest debt you can have' and suggested putting our money onto the stockmarket instead of onto our mortgages.

As far as I'm concerned this is a form of gearing, where they're 'borrowing' the mortgage overpayments and speculating on higher stock market returns. Since the credit crunch and the resulting stock & housing market crashes, we don't get anyone telling us we're daft to pay off our mortgages.

Generali

Pal wrote: »

You also cannot ignore the impact of gearing on housing. You cannot generally borrow to buy equities, but with houses you could (at least in theory and up until recently) buy the property with someone else's money (the banks) and get an investment that would pay off the mortgage interest while the capital value was growing.

IF you then sold, you have effectively made (in percentage terms) an infinite profit. Try plotting that on a graph!

Of course, those days are well and truely over.

The main difference is that most people live in their houses, an "investment gain" that is never properly plotted on the comparison graphs.

It is all random!!

Most people don't borrow to buy shares although it is very straight forward to do so using CFDs - far easier than getting a mortgage.

The gain or loss from owning the home that you live in can be measured against the cost over the same timeframe of renting. Normally owning a PPR is a great investment. I doubt whether that will be the case for anyone buying now or recently however.

dial8d

MEW = mortgage equity withdrawal. That is another way of saying increasing the size of your mortgage to borrow money against the equity in your home.

Somebody subsequently turned the acronym 'MEW' into a verb, hence mewing.

It has nothing to do with cats.

aha, yes..of course it is. Cheers for enlightening me !

neverdespairgirl

Gorgeous_George wrote: »

The people up North are generally great people - proud of their industrial past. The past that Great Britain was built on. Yes there are some scum but there are scum everywhere.

"Past" being the operative word....

IveSeenTheLight

carolt wrote: »

The reason the average age of FTB's has gone up from about 24 to 34 (IIRC) in the last decade is not that everyone in that age group has suddenly magically gone off buying (after all - they've watched property !!!!!! too!) but that they simply couldn't afford it.

According to CML http://www.cml.org.uk/cml/filegrab/2ML2.xls?ref=4624 The average FTB median age has risen from 26 in 1974 to peak at 32 in 2004 and is now declining to currently 28 in 2008.

Incidently, the last time it was below 28 was in 1991 for one year and precious to that 1987.

Between 1988 and 2008 FTB median age increased from 28 to 32 and is now back to 28.

I know I have shown median and you showed average, so it would be good to see a link to average FTB age.
http://www.hbosplc.com/media/FTB/FTBs_today.asp states the 34 you refer to and 32 in 1999

IveSeenTheLight

IveSeenTheLight wrote: »

I know I have shown median and you showed average, so it would be good to see a link to average FTB age.
http://www.hbosplc.com/media/FTB/FTBs_today.asp states the 34 you refer to and 23 in 1999

The actual figure is 32 in 1999 but for some reason I cannot edit