Abandoned hope for all ye FTBs

Max_Headroom_3

dopester wrote: »

Max. I'm not trying to anger you. Such as how I don't believe JSA should be boosted to homeowners.

Sorry, forgot to answer this point.

I've never thought JSA should be boosted for homeowners.

What I believe is that JSA should cover the most basic of living expenses, food and utilities in other words.

That's the case whether you're a home owner, renter, got a mortgage or whatever (but with seperate benefits toward rent or mortgage maybe, as is the case now anyway).

Vinegartits

pickles110564 wrote: »

Not finished yet, been to busy doing overtime at work. Will get round to finishing it soon enough.

Oh by the way, remember in an early post I mentioned a house that got repossessed, well it went for more than the for sale price ended up with a few bidding for it.
Not bad considering it will need £125k to bring it up to date.

A close acquaintance was involved in the sale process and much as I hate to burst your bubble, it actually sold for within 5% of the amount advertised in the local press. Whilst it was structually sound with planning permission for an extension, it needed extensive cosmetic work and the garden contained trees subject to a preservation order making extending, or splitting the plot, problematic. Prices have now dropped sufficiently to have made it a very unattractive proposition which was reflected in the difficulty in finding a buyer, in fact refurbished it would only be worth in the region of £500k in today's market and the refurb and purchase costs would outstrip the potential value when finished.

A sign of the times I think.

dopester

Max_Headroom wrote: »

Again, not angering me at all. But please understand, I won't be "trapped" since it's all equity, even if it halves, and I don't care about the "lost value", it was never "real value" in the first place since I never tried or wanted to sell it.

Let me put it this way. Had it gone up by a million pounds last year and dropped a million pounds this year, you could argue that I'd "lost" a million pounds in equity. Would I be any worse off than I am right now?

Well at least you're open-minded enough to consider some pretty damaging falls in value - whether it occurs or not.

To answer your question - yes of course. If you could have sold towards that £1 million peak. You could have rented as values fell, and then bought your home again, with a lot of financial security to go with it. Having a lot less to worry about now. Values are real, whether stock market values or property values.

I forgot to say earlier, that post #89 you made about buying and values doubling, and doubling again (during which would have caught you out when you gave a little thought to STR).. was an interesting read.

Yes it would have been a mistake for you to STR then, but you'd have been selling in to a market still getting in to frenzy, and backed by a financial system that really had thought boom and bust was over, and all the other reasons often given for why house prices couldn't crash.

It is interesting that you considered STR then though - but rule it out now, when maybe you could sell for a lot more than when you originally considered it.

Many of the bears have made that very same mistake. They STR'd too soon and did themselves out of selling for a higher price if they'd risked holding out for longer. That wouldn't be a "real-value" or a return in profit from your point-of-view. Gave themselves some time worrying as house prices continued to carry on rising.

They were probably looking at it from the same logical view-point you were. Expecting reality to dawn on people, or some authority to step in to take the heat out of the madness. Except it went on until much of the financial system overheated and broke.

That is the trouble with bubbles. They really go on to extremes.

An existing paradigm is seldom dispelled by evidence alone. As Keith Thomas has written, "Such systems of belief possess a resilience which makes them virtually immune to external argument."

A people whose culture grossly misinterprets certain facts will not necessarily reason their way to a more encompassing worldview until forced to do so by the brunt of economic necessity or military defeat. Reason does not alter values.

The manic phase of the boom lasts for several years. Properties come to sell at absurd prices on the expectation that they will appreciate to still more absurd prices. And they do. They defy gravity, moving from one lofty high to another, month after month, year after year, long enough to lure otherwise prudent people in to mortgaging their gains to reinvest in the inflated assets on margin.

Before the market can top, near enough everyone who could conceivably be drawn in must have already become a buyer. And debt levels supporting the asset prices must be many times higher than any that could conceivably be serviced out of the cash flow yielded by the investments themselves.

Then comes the bust. Just as everyone has come to count on the idea that lofty asset values are permanent, there is a crash.

The dynamics of value expansion and contraction explain why a bear market can bankrupt millions of people.

Max_Headroom_3

So basically you're saying that if you have a crystal ball and can predict what's going to happen in the future, you could make a lot of money?

Well then, I completely agree with you.

But then using your crystal ball to win the lottery a few weeks through the year will have the same effect with a lot less hassle.

And that's the point. Looking back and saying "ah, but if you'd done that then, but not that then you'd be rich" is easy. Just like knowing what previous lottery numbers were is easy.

dopester

Max_Headroom wrote: »

So basically you're saying that if you have a crystal ball and can predict what's going to happen in the future, you could make a lot of money?

Well then, I completely agree with you.

But then using your crystal ball to win the lottery a few weeks through the year will have the same effect with a lot less hassle.

And that's the point. Looking back and saying "ah, but if you'd done that then, but not that then you'd be rich" is easy. Just like knowing what previous lottery numbers were is easy.

We can take information and process it, mixed with knowledge, and make informed decisions about realistic future outcomes.

Do I need to consult a crystal ball to check if the coming months and years will see a frenzy of people in the UK suddenly buying properties at ever higher prices in the near future? Banks back to happily issuing mortgages at heavy multiples and relying on what they are told with a self-cert?

Or do you project with realistic information and knowledge. Many banks heavily reliant on liquidity (Government debt) from BoE. 1 million people + projected by many an authority to join the dole queue in the next 12 months. Pay-cuts for many people remaining in work. Young people graduating with fewer opportunities to earn good money, and more competition for the better jobs available. Cut backs in the public sector.

JoolzS

I stopped caring about FTBers when I watched a TV programme a few weeks ago that showed a woman buying a flat in Brighton for £135,000 without a clue about what her borrowing percentage was, and even before owning the property she had a friend of a friend in to give her a price on moving her kitchen.

I have tried to say sympathetic, even though I've have also been in property s**t in the past, but I've now lost patience.

The TV prog I mentioned above was the proverbial straw. DH and I have owned our teeny, tiny flat for around 15 years. Around four years or so ago we were in the financial position to update it. Even so, we now still have an old shower, a 70s loo and a 1930s bath, oh and nearly no double-glazing (by choice because we don't want to live a sealed box).

I don't know who started it - but I know that property prices definitely had to rise when people expected to have perfect walls and ceilings (i.e non-artexed) and great kitchens and bathrooms in the property they were buying.

I still find that strange - I just wanted to buy a home I could live in. If it had a horrible kitchen or bathroom, or perhaps artex on the walls and patterned carpet thoughout then it was just something I'd have to live with until I could afford to change. Within a few years a property seemed to become unsellable or not worth buying if it didn't conform to those stupid ideas, and those stupid ideas don't seem to be going away any time soon.

Julie

seraphina

kittie wrote: »

In the `old` days we saved and saved hard for a deposit ie we did without other things . Different times and different mentality. Nothing was handed to us on a plate and many of us did two jobs to get the mortgage deposit together. It can be done these days too but takes sacrifice and commitment

What a bunch of patronising !!!!!

Quick reality check for you: many young professionals are working around the clock in their main job, let alone finding time for a second job. But no, you obviously think we're out on the lash every night, blowing our paychecks on iPods and ryanair flights! Society should be very worried indeed when young professionals such as doctors and solicitors, earning a good wage by "normal" standards, can't afford to get on the property ladder.

Look back 20 years ago and most normal people (eg, nurses, postmen, factory workers) had a good chance of buying - the same people in the same job nowadays have no chance.

In the "good old days" you had a hope in hell of finding an NHS dentist, free university education, MIRAS, married couples' tax allowances...shall I go on?

baileysbattlebus

JoolzS wrote: »

I just wanted to buy a home I could live in. If it had a horrible kitchen or bathroom, or perhaps artex on the walls and patterned carpet thoughout then it was just something I'd have to live with until I could afford to change. Within a few years a property seemed to become unsellable or not worth buying if it didn't conform to those stupid ideas, and those stupid ideas don't seem to be going away any time soon.

Julie

That has been us on our homeownership experience - our current house had a horrible kitchen, horrible carpets, decor etc. We bought it anyway because it was what we wanted in a house for our family. It was 8 years before the kitchen was replaced. The carpets much sooner. But it was all done as we could afford it.

Our daughter and her partner (3 years ago), moved into their house, they ripped everything out they wanted to replace and they were FTB's so needed furniture too, as they both lived with respective parents until they moved in together. At Christmas they replaced the sofa and chairs they bought when they first moved in, only 3 years old, because they were decorating and had seen something they really liked - I didn't ask where the money came from.

The best of it is, they've now split up and she's back at home. So I suppose having a beautiful showhome to live in doesn't make you any happier.

lostinrates

JoolzS wrote: »

Within a few years a property seemed to become unsellable or not worth buying if it didn't conform to those stupid ideas, and those stupid ideas don't seem to be going away any time soon.

Julie

I sympathise with your view: however, as a FTB there re fr fewer fixer uppers around: because people have jumped on them to fix up to sell!

Also, I have shared before that I had an interesting conversation with a EA (in fact a senior person in a prestige SE agency, so whether this applies out side those areas I don't know) that ''fixer uppers'' are (or were at that time) very poor value because every banker and his eife wants to be a property developer: and could afford to do it making very little adderd value in a rising market at the prices they were prepared to pay for something to put their magnolia stamp upon, and that much of the increase was the rising market.

Personally, as a FTB, I'd prefer a house that we can save and improve ourselves ver time, to our taste and for us, not resale value. One of the houses we were very serious about buying ws one such property in zone 6.....we were the only people bidding, and the only ones that viewed on the open days I was at, who wanted to live in the place: every single other person was a devloper, whether a builder developer or a bankrolling developer. Most FTB's can't compete on borrowabilty for properties.

dopester

baileysbattlebus wrote: »

At Christmas they replaced the sofa and chairs they bought when they first moved in, only 3 years old, because they were decorating and had seen something they really liked - I didn't ask where the money came from.

The best of it is, they've now split up and she's back at home. So I suppose having a beautiful showhome to live in doesn't make you any happier.

You can't condemn all FTBs as being like that.

Anyway, as far as I'm concerned they were part of the problem. Buying 3 years ago (2006), near the very peak. More sheeple agreeing to buy at higher prices, which caused prices to rise further for the rest of us FTBs who were waiting.

Her partners idea to replace 3 year old perfectly good furniture, or hers? Doing that at Christmas just gone, and now it is abandoned with the split and her back at home. They were probably deeply in negative equity at Christmas, or seen the value of their equity plunge.

Sounds like your daughter was brainwashed by Krusty and co. Hmmm look in this shop. Need to buy something new again. Bang it on the credit-card. Retail therapy. "Yes John and I saw it and just loved it. Perfect for the lounge. Compliments the curtains so nicely. Yes, we're still doing alright. Look at us everyone, we're successful adults."

Empty shallow people - or him weak if he agreed to it - even if she was putting him under that demanding stroppy pressure.

Did you not raise your daughter with respect for the value of money, and the dangers of debt? Just applaud her decision to buy near the very peak price, and lavish spending when it was not needed.