Predictions of 50% falls now hitting mainstream in the Independent

Cat695

jungli_jim wrote: »

My Ex will be p****d she bought May 08 for 180K and has to fit new windows and kitchen.
Larger neighbourhood property ,with added conservatory on rightmove for £169k

I am renting pension payable at 40, (13K a year)Gratuity of 55K and 30K in the bank.

Offered on Xmas eve 85 against a 135K asking price

You a Soldier Jim by any chance??:cool:

Cat695

edinburgher wrote: »

Pension payable at 40? How come?

Well if I'm right he is a solider....i'm 5 years off my pension at 40....awesome

12k a year and 53k in my back pocket;)

jungli_jim

RN Aircraft Eng Tech, age 39, due to complete 22 years in Jan 09 but took a 5 year extension to Jan 2014. Will go when my savings and gratuity clear any mortgage or i get a posting i don't want. Stayed on old pension scheme, if i go any time after April 7th 2010 immediate pension with maximum commutation willl provide a pension untill age 55 of over £800 a month.At 55 it gets increased to reflect the last 15 years of RPI. :beer:

Currently rent a MQ due to child contact order and quite easy to clear £1250 a month in savings.

Ex ended up with 18K less than i had initially offered her. She went to court to get £500 a month spousal for 5 years, she didn't get anything....either her Solicitor was wrong or she was not listening. Court ordered sale of FMH she got 92% to ensure she had no claim on my pension (25%) and gratuity. By the time Legal aid had their debt repaid and the loan that was taken out to pay her solicitor had been cleared she ended up with circa 152K.

To add to this she is not working, has no pension and an estimated 40 K mortgage, which is i believe being supported by my child support payments, which will significantly reduce the day i leave the service...

WTF?_2

tradetime wrote: »

I agree the bit about currency fluctuation is somewhat irrelevant, but it does make for good newspaper reading as they get to say prices have already fallen 45%..

It means that as a store of wealth, houses have lost considerably more value than headline prices would suggest. Almost 50% in fact. Which has implications for how much 'real' money you can borrow against them in the future.

Of course that applies to all sterling denonminated or linked wealth too. Which of course is a reflection that the 'money' we have made over the last years is now being devalued away.

Personally, with half of my savings (still) not in Sterling it has direct relevance for me but that's not typical. To think I started 'trickling' them into Sterling after they had appreciated >20% in 18 months - now they are up about another 20% from that in just the last five or six months!

The massive devaluation of Sterling denominated wealth will make itself felt in the UK but most people don't seem to give it a second thought. Everyone that has sterling savings or sterling linked assets like UK property or shares has lost about 20% or so of their real wealth in a few months.

drbeat

Lacking some shafts of light in that article !!!!!!? How we doing on the green shoots front?

ad9898_3

drbeat wrote: »

Lacking some shafts of light in that article !!!!!!? How we doing on the green shoots front?

No 'shafts of light ?', I would say 50% off would be as bright as a midsummers day in the Australian outback.:D

50% off would be the absolute best thing for the UK economy in the medium to long term.

ManAtHome

Not many shafts of green shooting light (unless you watched ET or Close Encounters over the hols), due to diminishing piles of "LowdsAMunni"... http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4000183/UK-banks-face-70bn-property-bombshell.html

Maybe Our Saviour Of The World will be playing on the wartime spirit by sending people round to collect your pound coins for the war (against US credit crunches) effort, a bit like the WW2 railings collections.

tradetime

!!!!!!? wrote: »

It means that as a store of wealth, houses have lost considerably more value than headline prices would suggest. Almost 50% in fact. Which has implications for how much 'real' money you can borrow against them in the future.

The reference was used specifically in relation to the property market, and as such it was simply cheap journalistic hype. One could say, given the irrational and unsustainable rise in property values people should never have had this wealth in the first place.
I tend not to view a house, not the one I live in when I own one, as a store of wealth, sure it has value but releasing that value for most people is not a prudent thing to do. A house is four walls and a roof, it's somewhere to sleep, to entertain, to shelter, viewing it as a store of wealth is partly what got us into this problem as people decided to "tap the store" and, well, we know where that led. But I believe we both agree on that so enough said. I'm not sure what "real money" you refer to.

!!!!!!? wrote: »

Of course that applies to all sterling denonminated or linked wealth too. Which of course is a reflection that the 'money' we have made over the last years is now being devalued away.

Money is constantly being devalued courtesy of inflation, this is nothing new, since I know you know that, I can only assume your are referring to Sterling verses foreign currencies. The FX market is a highly liquid market inhabited by many speculators, the volatility that hit equities and commodities markets has now found its way there. Currently speculators are running ahead of the recession The US was hit first by the effects of this recession as could be seen by the Dollar being at $2+ to the £ back in October, since then the UK has felt the first major effects, and the Dollar has gained strength but I view that as a temporary situation. But it is most likely the Euro you would refer to, The Euro has shown considerable strength against Sterling and the Dollar for that matter, but it is worth bearing in mind that the full effects of the current crisis are not yet apparent throughout the eurozone, thus they have been much less aggressive in cutting interest rates.I believe this will prove a mistake in the months to come. Thus since the ECB has adopted a hawkish rhetoric throughout it should come as no surprise speculators are sheltering there riding and driving the currency. When the full effects of this crisis manifest themselves more openly in the Eurozone, with countries such as Ireland, Spain, Italy, and Greece requiring massive bailouts it will be likely speculators will abandon the Euro also

!!!!!!? wrote: »

Personally, with half of my savings (still) not in Sterling it has direct relevance for me but that's not typical. To think I started 'trickling' them into Sterling after they had appreciated >20% in 18 months - now they are up about another 20% from that in just the last five or six months!

Thats a pretty good return, 40% in 24 months, not sure which asset class you have been hiding in. I moved money to dollars between $1.9 - $1.99 and have since repatriated it this month, but that is only a 25% return.

!!!!!!? wrote: »

The massive devaluation of Sterling denominated wealth will make itself felt in the UK but most people don't seem to give it a second thought.

That's hardly surprising since most people choose to keep their money in bank savings accounts, which as I have said to you before is a very inefficient use of it.

!!!!!!? wrote: »

Everyone that has sterling savings or sterling linked assets like UK property or shares has lost about 20% or so of their real wealth in a few months.

The true value of a currency for the people who hold it is measured by its purchasing power, ie what it buys in relation to what they need, not whether it is stronger than X or weaker than Y at any given time in the FX markets. Until the speculators have settled down it will be impossible to know what damage to what currency is permanent. Sterling has been particularly hard hit because it's economy relies heavily on the financial sector, which given the nature of this particular crisis is not a good thing. Sterlings fate further down the road will likely hinge on how the financial sector emerges from this mess, and since my guess is we are just about half way through this crisis that does not bode well, but we shall have to see on that one. Speculation on matters such as this does little other than make people anxious.

crazygaijin

tradetime wrote: »

The reference was used specifically in relation to the property market, and as such it was simply cheap journalistic hype. One could say, given the irrational and unsustainable rise in property values people should never have had this wealth in the first place.
I tend not to view a house, not the one I live in when I own one, as a store of wealth, sure it has value but releasing that value for most people is not a prudent thing to do. A house is four walls and a roof, it's somewhere to sleep, to entertain, to shelter, viewing it as a store of wealth is partly what got us into this problem as people decided to "tap the store" and, well, we know where that led. But I believe we both agree on that so enough said. I'm not sure what "real money" you refer to.
Money is constantly being devalued courtesy of inflation, this is nothing new, since I know you know that, I can only assume your are referring to Sterling verses foreign currencies. The FX market is a highly liquid market inhabited by many speculators, the volatility that hit equities and commodities markets has now found its way there. Currently speculators are running ahead of the recession The US was hit first by the effects of this recession as could be seen by the Dollar being at $2+ to the £ back in October, since then the UK has felt the first major effects, and the Dollar has gained strength but I view that as a temporary situation. But it is most likely the Euro you would refer to, The Euro has shown considerable strength against Sterling and the Dollar for that matter, but it is worth bearing in mind that the full effects of the current crisis are not yet apparent throughout the eurozone, thus they have been much less aggressive in cutting interest rates.I believe this will prove a mistake in the months to come. Thus since the ECB has adopted a hawkish rhetoric throughout it should come as no surprise speculators are sheltering there riding and driving the currency. When the full effects of this crisis manifest themselves more openly in the Eurozone, with countries such as Ireland, Spain, Italy, and Greece requiring massive bailouts it will be likely speculators will abandon the Euro also
Thats a pretty good return, 40% in 24 months, not sure which asset class you have been hiding in. I moved money to dollars between $1.9 - $1.99 and have since repatriated it this month, but that is only a 25% return.
That's hardly surprising since most people choose to keep their money in bank savings accounts, which as I have said to you before is a very inefficient use of it.
The true value of a currency for the people who hold it is measured by its purchasing power, ie what it buys in relation to what they need, not whether it is stronger than X or weaker than Y at any given time in the FX markets. Until the speculators have settled down it will be impossible to know what damage to what currency is permanent. Sterling has been particularly hard hit because it's economy relies heavily on the financial sector, which given the nature of this particular crisis is not a good thing. Sterlings fate further down the road will likely hinge on how the financial sector emerges from this mess, and since my guess is we are just about half way through this crisis that does not bode well, but we shall have to see on that one. Speculation on matters such as this does little other than make people anxious.

Excellent post, thank you.

Its very disconcerting thinking that all my pounds have gone down 20% but as you rightly point out it all depends on how you look at it.

Anyway House prices are falling a lot fast than the pound is. So if you do look at it comparing the pound against stronger yen dollor etc then house prices have probabily halved already. But no one looks at it that way so why look at pounds in that way either.

bob79

Since the UK imports many goods (oil, food, electronics...) the drop of the pound will actually make the average Brit significantly poorer due to the effect on inflation.