Times Newspaper Report Advises To Buy Property Now!

Conrad

I have to say quite a few of my sophisticated investors are planning to buy in the next 6 months.
These are people that invest to a strict business model, focused purely on rental yield and cashflow.
HMOs let to professional business users / companies for example with a c10% yield and £10,000 pa per property net profit (after borrowing costs).

As Warren Buffet has advised time and again, it is impossisble to time the market perfectly. Better to buy sensibly at a reasonably competetive price where healthy positive cashflow exists.

I've been pure bear for the last few years, but can see the comming months will yield significant opportunities.

The error many will make will be to leave it until to late.
Thier 'optimum' moment will come when everyone else's does, driven by general positivity and that means a lot more buying competition.

My advice is dont be to obsessed with buying ast the very bottom as you WILL almost certainly miss it.

carolt

Apologies to all those I bored/annoyed on this thread - sorry for taking it off topic. Happy it's back on.

HammersFan

carolt wrote: »

Apologies to all those I bored/annoyed on this thread - sorry for taking it off topic. Happy it's back on.

Well done Carolt. We never agree on much but I agree that you and DD hijacked this post for personal reasons. There really doesn;t seem much point in posting in these forums with people like yourself around.

carolt

Sorry you feel like that - I always enjoy what you have to say, even if I disagree. If we all thought the same, these forums would be dull indeed.

Max_Headroom_3

Dithering_Dad wrote: »

Sorry Carol, but who would you expect to be commenting on Property - A soldier, a sailor and a candle stick maker?

I receive notification on share prices and best buys from stockbrokers, who are saying that many shares are at much lower prices than they should be, simply because of an over-reaction in the markets. Am I to disbelieve these experts because they're stockbrokers and have a vested interest in talking up the market?

While the estate agent, a property finder and a mortgage broker may have a vested interest in talking up the market, a certain person with no qualifications and no work experience in finances has definite vested interest in talking down the market. Still looking for your bargain house Carol? :rotfl:

Lets take your "stockbroker" example into context shall we?

Lets say that all shares have reached an unimaginable high, out of all context to what's sensible or affordable, and that much of that is spurred on by the bubble effect of people buying just because they're going up "supply and demand you know, share prices can only go one way". And lets say that this bubble is spurred on by the banks lending huge amounts to people in order for them to buy shares with very little concern for their ability to repay, or even making any checks on that ability, choosing to trust their word.

Then lets just imagine that the banks get their fingers burned as a lot of people don't pay back. They withdraw their lending at such astronomical levels, and share prices, held up by little other than sentiment (only go up) and imprudent lending, go into decline.

Six months later and your stockbroker hasn't sold a single share. He gets paid purely on commission and he's going to go bust if he doesn't sell someone something soon.

He calls you up and he says "Shares are falling, but in two years time it is possible that they may recover and go up again, now I need you to buy £150,000 worth from me in order to take advantage of this fantastic possibility".

Do you thank:-

a) Yeah rightio matey, do I look like I was born yesterday?

b) This man is an expert in his field, I must immediately take out a huge 25 year loan on a depreciating asset and do what he suggests.

Which is it DD?

Lotus-eater

brit1234 wrote: »

Any one who buys now or in the next few months is going straight into negative equity. To buy now is simply stupid, we have the fastest house prices in history and they are getting bigger.

Well that's not true of course, you wouldn't necessarily be in negative equity at all. Depends how much you put down.

If I had a huge wedge of money and didn't have to worry about a large mortgage, my family and me were renting and not enjoying it, I would certainly consider buying now. I would know that prices would almost certainly fall further, but I would think that the panic in the potential sellers would enable me to buy at a better price than the market std price.

As always, its best to listen to everyone who has an opinion and then make up your own mind.
Personally I prefer to wait until the market has fallen to its lowest and started to rebound, to make sure its not going to fall lower, but as I'm moving up the ladder next time, it makes little difference to me if I catch the bottom or not.

HammersFan

carolt wrote: »

Sorry you feel like that - I always enjoy what you have to say, even if I disagree. If we all thought the same, these forums would be dull indeed.

Its just been getting worse lately - unless people accept all they read in the press and that the market is in freefall they get pounced on by the usual suspects and it tends to get way too personal. Examples in this thread include people who might buy now being labelled as stupid (I think that's a bit uneccesary). Maybe its just something about the way you post that appears patronising to those with a different view.

Even if you think a particular scenario is unlikely it is possible. For example, prices are indeed very soft at the moment and a cash(ish) buyer could strike a bargain. If we don't get a recession and sellers hold out for their prices, and we start getting rate cuts (very possible given the news on the economy) there is every chance that buyers will return quite quickly. It only takes a quick read of these boards to see the pent up demand.

Where we would agree, I feel, is that with current interest rates on BTL mortgages, it would be a very risky move to go in with a less than 40% deposit. Notice I said very risky (not stupid). Risks sometimes pay of very well (just like trying to call the bottom of the market is a risk too).

brit1234

Conrad wrote: »

As Warren Buffet has advised time and again, it is impossisble to time the market perfectly.

I fully agree. However you have to use common sense. The bottom is far off, so buying now is stupid. I'm sure Buffet takes a educated guess when he predicts the bottom and aims off when the figures are still right.

I'll laugh when you investor friends get burnt. A house is a place to live, speculators affecting the lives of decent people are the scum of the world.

posh*spice

FC_United_Fan wrote: »

Carolt, if your not interested in this discussion could you just not post on here. you have just made 4 consecutive posts that have nothing whatsoever to do with the Times article.

I came onto this thread to see a discussion about house prices, not to see you ranting on.

This is DD in sheeps clothing for sure:rolleyes: I'll dig up the evidence if anyone is interested....but life's too short...

Max_Headroom_3

The bottom line in all of this is affordability.

When people in averagely good jobs can afford averagely good houses, then its time to start thinking about the crash ending.

But whilst a typical wage is £20K and a typical house is £150K+ (seven times income with a small deposit) the numbers simply do not add up.

To say "hey they've come down 10%, pile in, they're a bargain" when they've tripled in the last 10 years shows a certain lack of realism in my opinion.