The Myth of record debt!

Dithering_Dad

Seems to me that on this and some other threads that the debate was going nicely until !!!!!! decided to take offense at a general statement and decide it was personal. I've noticed that he does this a lot if a debate is not pushing his negative personal agenda - he causes an argument to distract everyone from positive points being made.

To get back to debating and to respond to Canon Fodder's comments re: house buying..

Do you think that most of the STRs in here are basing their decision to buy solely on the price of housing and speculation that they will fall much further or are they taking a more holistic (and in my view much more sensible) view where they consider buying a house now where they can take advantage of the stamp duty holiday, take advantage of 5 year low interest fixed rate mortgages and take advantage of seller's fears (lets be honest, it's better to negotiate reductions when all we hear is bad news - not when some good financial news starts filtering thru).

If inflation does start to climb dramatically as some HPCers believe, then surely it makes sense to buy now, get a long-term fix and ride out the high rates than to not buy now, then not buy in a couple of years because while houses are cheaper, mortgages are much more expensive.

Just a thought...

WTF?_2

IveSeenTheLight wrote: »

Labelling people "resident bulls" and that they cannot make rational, detached judgements is being rational I guess

three words spring to mind - "pot", "kettle" and "blank"

You either have a bullish view on the housing market or you have a bearish one - Not too many people around with a 'neutral' opinion on where house prices will go as far as I can see. So it's quite appropriate to refer to posters as being bulls or bears.

Although I often put the word "bulls" in quotes or apostrophes because it's quite obvious that some people just come here to have a good rant rather than offer any actual debate. Witness the constant accusations from them of people 'doom mongering' or 'being negative'.

Coming out with a negative prognosis of the housing market based on the facts is entirely rational and does not indicate that the poster making the judgement has some sort of negative mindset.

It's telling that the accusation of 'doom monger' is never backed by an actual counter argument as to why the house market would have a more positive outlook. Just repeated jibes about negativity.

I've actually done quite well out of the whole debacle of the house market/economic crisis. My savings are up close to 25k over 18 months due to exchange rates, the sort of house I'm thinking of buying is down at least 60k over the same timeframe (based on local EAs windows) and should I decide to take on a small mortgage to buy a nicer place up the ladder I'll be able to get one for peanuts thanks to a very large deposit and the government desperately slashing rates.

That still doesn't prevent me from having a bearish outlook on the economy and the housing market. But then I can separate the nice feeling that I've done well and my judgement in not buying 18 months back has paid off, from a rational evaluation of the outlook for housing and the economy, which I will repeat, absolutely sucks.

Cannon_Fodder

Again, DD you claim something about someone else that you have done yourself...tut, tut.


Debating;

I can see the logic of your thought. Its a balancing act.

I'm not sure its just inflation that will be the signal. i.e. if oil went mad again (say when recession was signalled to end), that could hurt house prices more, as households lose disposal income, compared to for example, wage-led inflation that leaves people with more disposal income to spend on chinese tat - or houses.

Or, I guess, tax breaks that fuel spending - will the population make up for a prudent Xmas with a splurge, or buy houses?

And of course, the big one - banks shifting back towards 90% LTVs will have to happen before any substantial HPI. The contraction is not yet complete, imo.

The judgement of when the bottom will be reached is a fine one. I know you are having fun doing the same on the Equity front.

I don't suggest people hold out for the very last month of drops. Although of course in the 80s/90s there were years of bumbling along with +0.2% followed by -0.2% and vice versa, so its pretty near impossible to know the very best time to buy.

As the recession has yet to be felt on the people's doorsteps, I think we have 6 months leeway to review things further. It should take that long for the very lowest rates to be reached. (Although, if they keep doing -1.5% every month, that'll be 2 months - unlikely?)

In my case, with fixed savings and a 1 year AST, I don't have much choice anyway. That was a conscious decision in spring/summer.

But then I'm hoping to be near/completely mortgage free anyway so rates are less important to me than the right house in the right place at an affordable price. Nothing on the market taking my fancy, but then I'm being picky.

Also, 6 months will allow redundancy possibility be confirmed/avoided, and I will take a fresh view then.

WTF?_2

Cannon_Fodder wrote: »

Again, DD you claim something about someone else that you have done yourself...tut, tut.

It's a common theme with DD. I think he squeezes out the pus on MSE and he's found a group where he can get away with it.

Really2

!!!!!!? wrote: »

It's a common theme with DD. I think he squeezes out the pus on MSE and he's found a group where he can get away with it.

Sorry !!!!!! you go on about personal comments and do exactly the same where I come from that makes you a hypocrite.

Cannon_Fodder

!!!!!!? wrote: »

It's a common theme with DD. I think he squeezes out the pus on MSE and he's found a group where he can get away with it.

Yes, !!!!!!?, but even though I agree with the direction most of your points come from, the pair of you drag out this feud more than strictly necessary.


I once wrote that I thought you were a couple bickering - if we throw in Chucky as your mother-in-law saying to DD "I told you he wasn't good enough for you"...and I think we have a sitcom on our hands.

Let it go, all of you.

tomstickland

Dithering_Dad wrote: »

Someone expressing a different viewpoint from yourself isn't 'suppressing the debate', it's adding to it.

Telling me that I have a problem with being negative is not adding to a debate.

I don't regard myself as having a problem though - funnily enough I bought a flat with 90% LTV in late 2006, so I accept that the house price slump has affected me already. I need somewhere to live though, and this meets my requirements.

I still think that the UK had taken a very bad course over the last 10 years. One that released money that didn't really exist due to selling an appreciating asset amongs ourselves.

Regarding the "oh it's not bad, our debt isn't that high", that's because of the off balance sheet activities.

If you ran a company and owed a pension to 10 staff who retired next year, but had no funding in place, you'd probably regard that as a problem. The government choose not to.

StevieJ

Generali wrote: »

That's a cracking article and shows very clearly the trouble with talking about Government debt.

As I see it we have 2 big problems:

1. The amount we're looking to borrow this year.
2. The unfunded liaibilities off the Government's books.

That other countries have a worse problem with debt is a bit like saying well I've had a heart attack but the bloke in the next bed has got gout too!

Not really if it effects relative exchange rates.

WTF?_2

Cannon_Fodder wrote: »

But then I'm hoping to be near/completely mortgage free anyway so rates are less important to me than the right house in the right place at an affordable price. Nothing on the market taking my fancy, but then I'm being picky.

Mortgage free is the place to be - owning your own place outright puts you at least a little bit out of the rat race. Nothing worse than feeling you are on a treadmill to keep your mortgage payments up and being at the mercy of the markets and interest rate policy etc.

Also, 6 months will allow redundancy possibility be confirmed/avoided, and I will take a fresh view then.

Yeah, we're entering a phase now where things should firm up on that front. I moved permie from contracting a while back in anticipation of a downturn but you never know what sort of curveball life can throw.

Still, two things to bear in mind

(1) Losing your job is largely outside your control. No point worrying about it.

(2) Most people keep their jobs even in a recession.

WTF?_2

Really2 wrote: »

Sorry !!!!!! you go on about personal comments and do exactly the same where I come from that makes you a hypocrite.

When you start taking DD up on his stream of baiting posts as readily as you jump on a solitary post from me, I'll take your stance seriously.

If I actually took him off ignore and answered his non stop slagging we'd see even less rational debate.