House Price Crash 3

westernpromise

abaxas wrote:

A few points..

In the last crash there were properties which had negative value, it cost more to keep the worthless house than it was worth. eg rates, upkeep etc.

Houses also depreciate in value without wear and tear input.

You probably own the houses, however you can still go bankrupt if the 'charge' on the property is greater then the outstanding mortgage and you default on the loan secured on the property.

Also you forget about 'acts of god'. Crime etc. Lots of things can put your property into a state where it cannot be sold or is not covered by insurance. Remember that insurance is NOT a right.

I know I'm nitpicking a little, but people have to understand that property has it's downsides. Sometimes they come up from the depths to bite you.

Exactly - equities pay out an income whereas housing carries a cost.

dunstonh

The main reason I prefer houses over stocks & shares is one of security. Houses can drop in value but they don't go bankrupt. If (sorry, when!!!!) house prices fall, assuming I can afford to hold on say 5 years, I've lost nothing. If a company goes bust I can hang on to the share certificate but it will never be worth anything.

Which is why you dont put all your money in one basket. Its another reason I dont invest in shares directly but utilise funds. Less than 1% of my investments are in any one company. So big deal if one goes under. I lose 1%. I'm up 8% on August so no concerns there.

ashm1

Hi,

The US economy seems to be slowing but UK economy has inflation pressures. http://www.forbes.com/markets/2006/11/01/housing-economy-purchasing-markets-bonds-cx_sr_1101markets09.html
http://news.bbc.co.uk/1/hi/business/6110470.stm

Does anyone watch the bond yields?


Kind regards,

Ashley.

abaxas

dunstonh wrote:

Which is why you dont put all your money in one basket. Its another reason I dont invest in shares directly but utilise funds. Less than 1% of my investments are in any one company. So big deal if one goes under. I lose 1%. I'm up 8% on August so no concerns there.

Good post!

The best advice is usually the simplest one. Diversity is king in investment.

WesternExpress

These days houses seem to be peoples' investment, pension scheme, savings and somewhere to live all in one great big basket. Hence why it's so hard to get on the ladder the old way where you had all these (in the minds of the public) worthless financial products eating into potential mortgage payments.

meanmachine_2

And where there's fools gold there's the government keen to get its slice.

So old lady with no income sitting in a house worth 300K gets a council tax bill at 0.75% of its value.

Marvellous.

If that doesn't make people think nothing will.

And yes, US market is slumping, inflation there is soaring. So glad we're immune to it all.

Fast forward five years. US homes are averaging £100K, following a necessary correction. Ours are up to £300K. The most expensive in the world. Massive mortgages, workers pricing themselves out of jobs.

Brilliant. Bust follows boom like day follows night. Or am I missing something?

olly300

Guy_Montag wrote:

Just the rant I always want to make.

People need to take responsiblity for their actions. Throughout life we get good advice & bad advice & we must make judgements on which to follow.

If we continually bail out people too stupid or incompetent to understand what they are letting themselves into, then it discourages people from thinking about what they are doing - they can't lose after all.

Unfortuantely talking to people I know personally who have had to deal with pensions and investments most people either to incompetent to understand long term investments or simply can't be bothered even if information is given to them on a plate.

I know from being in a pension meeting that some people can't be bothered to read the information given to them even if the information says the same thing in 3 different ways.

olly300

meanmachine wrote:

And where there's fools gold there's the government keen to get its slice.

So old lady with no income sitting in a house worth 300K gets a council tax bill at 0.75% of its value.

Marvellous.

If that doesn't make people think nothing will.

And yes, US market is slumping, inflation there is soaring. So glad we're immune to it all.

Fast forward five years. US homes are averaging £100K, following a necessary correction. Ours are up to £300K. The most expensive in the world. Massive mortgages, workers pricing themselves out of jobs.

Brilliant. Bust follows boom like day follows night. Or am I missing something?

The government is relying on immigrants to do jobs that the UK citizens don't want to do for whatever reason i.e. they can't afford to do the job.

And yes, people from the EU will come and a lot will leave within 5 years of entering once they realise that the higher sounding wages reflect the higher living costs of the UK. I work and have worked with a lot of EU nationals, lots of them return home or go elsewhere once they realise they can't afford to buy a home in the UK or that renting doesn't have the same stability as in their home country.

Gorgeous_George

meanmachine wrote:

So old lady with no income sitting in a house worth 300K gets a council tax bill at 0.75% of its value.

Marvellous.

If that doesn't make people think nothing will.

To ease pressure in the housing market, said old lady should be encouraged to move into more appropriate house, perhaps by removing Stamp Duty for moves to smaller homes.

Smaller homes should, and generally do, attract smaller bills.



GG

Pobby

meanmachine wrote:

And where there's fools gold there's the government keen to get its slice.

So old lady with no income sitting in a house worth 300K gets a council tax bill at 0.75% of its value.

Marvellous.

If that doesn't make people think nothing will.

And yes, US market is slumping, inflation there is soaring. So glad we're immune to it all.

Fast forward five years. US homes are averaging £100K, following a necessary correction. Ours are up to £300K. The most expensive in the world. Massive mortgages, workers pricing themselves out of jobs.

Brilliant. Bust follows boom like day follows night. Or am I missing something?

Of course there will have to be a correction.People have believed too many myths.``The government won`t let it happen``,``House prices always go up`` and so on.If this government looked at where inflation really was my guess is we could be seeing a return to the historical IRs of around 8%.

Low,low interest rates have done nothing than distort the economy.Sure there is an arguement that it encourages investment in businesses but the downside is that the individual has taken on much personal and mortgage debt.This stuff about my house is my pension,savings and all the rest is a complete load of bull unless you can downsize.hate to say this but we are already seeing the fall out and with less than 5% interest rates this is scary.