House prices may halve warns Vince Cable

Kenny4315

StevieJ wrote: »

That is fine if you are a trader, for most people it is stay long and don't be panicked into selling at the bottom, markets/houses will recover. Although if you were to invest now in either, and LTH and you look back from the future you would probably find it was a great time to fill your boots.

Even if your not a trader .. it is possible to liquidate your assets at better points than many do. For example, I bougnt into shares at time of Iraq conflict and sold april 2007, 3200 to 6200ish on ftse. If I had left for a fixed time then ftse is now down to 4200ish. Sitting it out isn't necessarily the best course of action. Periodically reviewing the position and trying to anticipate markets changes are likely to lead to more success. Obviously houses are more difficult but are not impossible.

dealornodeal_3

!!!!!!? wrote: »

Yes.

I've already said that signs of surging inflation will be a signal for me to buy, irrespective of where I think houses should go price wise. Why would I want to sit back and see my savings decimated?

I am of the same opinion, as you. Interest on Savings will be worthless.

So its back in buying a second property - when the time is right. And let out for rent?

WTF?_2

dealornodeal wrote: »

I am of the same opinion, as you. Interest on Savings will be worthless.

So its back in buying a second property - when the time is right. And let out for rent?

Well my position is that I have a decent amount of savings already and I just want to buy a decent house, mortgage free if possible, so that I have the security of owning my own home without worrying about stumping up money to the bank every month. If I figured inflation was about to explode I'd consider taking on a small (1x salary) mortgage to buy a better place than otherwise.


But anyone who wants to take a punt with their savings from an investment point of view could certainly clean up by leveraging to purchase a property if strong inflation were to hit (especially after they had obtained a low, long term fix). Obviously if you got it wrong and deflation continued you'd be rather exposed.


Gordon just doesn't have any other ideas about how to run the economy. It's easy credit, borrowing to boost the public sector and welfare and a 'strong' housing market for him (i.e. High property prices) to keep the masses happy. Plus he seems to share the labour penchant for thinking they know best and forcing everyone into going that way too 'for the greater good' so he wouldn't have any hesitation in screwing over anyone who didn't see it his way (savers).

WTF?_2

Kenny4315 wrote: »

Even if your not a trader .. it is possible to liquidate your assets at better points than many do. For example, I bougnt into shares at time of Iraq conflict and sold april 2007, 3200 to 6200ish on ftse. If I had left for a fixed time then ftse is now down to 4200ish. Sitting it out isn't necessarily the best course of action. Periodically reviewing the position and trying to anticipate markets changes are likely to lead to more success. Obviously houses are more difficult but are not impossible.

The problem with houses is that most people have to borrow heavily to own one - especially true in the last few years of HPI madness. They may not be able to service the debt on the property in order to hold it until prices improve. And the market doesn't tend to oscillate in a short enough period to be able to ride out the troughs.

If things continue as they are at present, people who bought last year may well have to wait until 2017 to see the nominal value of their property return. Given the effect that the recession will have on employment and incomes, there will be a lot of people forced to liquidate irrespective of whether they want to or not.

StevieJ

Kenny4315 wrote: »

Even if your not a trader .. it is possible to liquidate your assets at better points than many do. For example, I bougnt into shares at time of Iraq conflict and sold april 2007, 3200 to 6200ish on ftse. If I had left for a fixed time then ftse is now down to 4200ish. Sitting it out isn't necessarily the best course of action. Periodically reviewing the position and trying to anticipate markets changes are likely to lead to more success. Obviously houses are more difficult but are not impossible.

If you know what you are doing I agree but for Joe Public (or the plumber), the safe bet is LTBH overwise they end up buying high and selling low, thus financing your stock market investments.

Conrad

Kenny4315 wrote: »

What I don't understand was why these economic guru's could not see this coming 3 years ago or more. It was obvious to anyone with any understanding of economics/human psychology/finance/history. All markets are cyclical, otherwise they'd always be winners, which is never the case. There are always winners and they are always losers. Interest rates go down borrowers win, savers lose and vice versa. Companies .. hot weather .. air con units go up, heating suppplies go down. Bookies ... favourite at Goodwood wins .. bookies lose, punters win, outsider wins vice versa.

So the rules of investment are spread your risk.

CASH IS KING, always hold a cash or near cash equivalent slush fund for opportunities and to lower overall investment risk.

But the main rule of winning is TIMING, knowing when to get in and when to get out. Buy low and sell high, and by high I mean somewhere close to the peak when most of the gain is obtained, when I say low I mean close to the low as-well, as the absolute point is impossible to establish in advance.

That way you'll have plenty in reserve when the SH&t hits the fan, and you'll virtually always be the winner. Sheep don't win the only end up as Sunday lunch with Mint sauce. To many individuals in the Uk just follow everyone else blindly, shares going up lets buy those, houses going up lets buy those, when they go down lets panic. because we've not really looked at the details of the investment over a longer time frame.

I always make money out of all my investments, and usually a large percentage.

You get my vote for best general investment post.

I'm with you on this (although my investments have not always done well).

People are reactive. The flock currently are reacting to past inputs, but there are new inputs such as ultra low rates (that will feed into the retail end in the comming year), global Government stimulus packages etc.

Conrad

WHAT IS YOUR TIMELINE FOR INVESTING GUYS:

It's very unlikely you will time the perfect bottom, so will you go just ahead of the flock or just after the flock?
If the flock thinks the bottom will be december 09, by definition it will be June.

luvpump

Conrad wrote: »

WHAT IS YOUR TIMELINE FOR INVESTING GUYS:

It's very unlikely you will time the perfect bottom, so will you go just ahead of the flock or just after the flock?
If the flock thinks the bottom will be december 09, by definition it will be June.

No one knows when the bottom will be, I doubt there will be a rapid recovery even when it does turn & june 09 is way to early !!
But from my perspective the end of 09 through to summer 10 is when i plan to buy, I will have a nice fat deposit, hence be able to get the best mortgage rate around & as !!!!!! said, why should I watch my hard earned savings go up in smoke due to crash Gordon Printing money & causing inflation, not to mention very low interest on my savings..

WTF?_2

Conrad wrote: »

WHAT IS YOUR TIMELINE FOR INVESTING GUYS:

It's very unlikely you will time the perfect bottom, so will you go just ahead of the flock or just after the flock?
If the flock thinks the bottom will be december 09, by definition it will be June.

I aim to own my own home outright or as close to mortgage-free as possible. It will not be an investment per se, but hopefully won't lose money either.

My guess would be mid 2010 is when I'll buy. Unless we experience the reality-warping effects of Gordonomics when all bets are off.

I may consider getting into BTL a year or two after I buy my house, depending on how comfortable I feel and of course how the sums look. I'd be looking for a single property producing a decent cashflow. It would seem a lot less unpredictable than stock market investing or playing the various other markets to me and I don't really trust banks to ever pay a reasonable interest rate that reflects a positive return after real world inflation.

Kenny4315

!!!!!!? wrote: »

The problem with houses ..............

Houses are more difficult to work with admittedly but there are opportunities in a falling market as well as a rising ones, thats' why hedge fund managers make so much cash. There will be many winners coming out of the other side of the crash. FTB's, those upsizing, investors (who have released holdings and have them sitting in hard currency), etc. Often people fighting to stay in their homes would actually be better off saying the costs are sunk ... what is the position now ... is it better to sell and take a hit now and then buy back later having rented for a while. Better you selling than the bank, forcing a sale.

I will be looking hard around june/july next year, and negioating hard. I don't expect that the price recovery will take until 2017. Most of the major falls between now and May time, followed by slow/nominal falls till end of summer followed by relative price stability, probably for around 2 years, then well you know what will happen then as it always does. I think investors/speculators will be looking at mid-summer to tie in some good prices alongside long term low cost finance.

If you wish go through some of my previous posts from years back .... I'm usually pretty much on the boil. Let's put it this way I haven't had a proper job since 2001, (or so the wife says).