Is it me? Or has anyone noticed that we are in the largest bubble of all time?

anselld

brit1234 wrote: »

Shares and commodities have all well out preformed house price capital gains in recent years.

You can strike all you like! Unfortunately you can't live in shares or commodities.

FTBFun

anselld wrote: »

You can strike all you like! Unfortunately you can't live in shares or commodities.

What if the commodity is bricks?

brit1234

hastie wrote: »

dont beilieve you.
Last 18 months on stock market has been good only due to the bank bailout.
I have bought shares and watched their value spiral to zero, (think dot com etc.)
Even buying utilities stocks has in the past seen large drops in value at times.
Stick with what I said. The right property in theright area, Safe as houses

You have been buying stocks at the wrong time. :rotfl:

You mention dot com, did you buy shares after like I did. Or did you buy after the 2008 bottom. all have completely out preformed property.

Then there is gold up $400 an ounce to now $1,400. Or shall we talk silver?

House prices are overvalued and falling. Like japan they are likely to fall a lot more and stay flat for over a decade.

hastie

like nearly everyone who lives in the capital, you only see your 'local' market, about which you may be correct
Outside of the M25 there is a whole other country!


Better buckle down the straps on that house made of straw, cause bricks is where its at

Nerra

olias wrote: »

And here is why you are talking absolute twaddle...

In the time I have owned homes, if I had rented instead, I would now have nothing - and have had little spare income to buy anything over the years. Instead I have bought...

Over the last 20 odd years, each house I have bought, I have added value to - kitchen/bathroom/redecoration/landscaping/even full renovation. Each time I have sold at a profit, and held back some of that profit (anywhere from £5k-£35K) and have used the remainding profit as a deposit on a new house and to lower my mortgage. The profit I have held back, I have used to buy cars, have exotic holidays (South pacific, New Zealand, Australia, Indonesia - all several times), buy clothes/furniture/electrical goods, and to do up my new property and add value to it.

By doing that, I have traded up from a 1 up 1 down 'starter' home, to now owning a 4 bed 3 bath home worth a considerable amount. At the same time, I have consistantly lowered my mortgage from 95% in my first house, to 0 now (yes, having only recently turned 40, I am mortgage free!) At the same time as stated, I have had money for all sorts of luxuries, that I would otherwise have been unable to afford.

I intend to do this several more times before I retire. I then intend to downsize considerably and therefore release a considerable amount of equity from my home. I would suggest that this is true of the majority, not the minority as you state.

That is why you are talking twaddle. You can make money from the rising value of your home, and considerable amounts at that.

Olias

I never stated that buying a house was not wise. I also never said that buying a run down house, fixing it up and selling it for more wouldn't make you any money. But that cannot be compared to buying an average house and then that average house simply increasing with the average house price and then being sold.

Fixing up houses or improving them requires time and capital investment much like any other business.
Any profit you have realised is due to this and not due to the average house price rising.

Before you start boasting, I would say there are many people who have used the same time, effort and money you have put into home improvement over the years and built a business or career that pays them considerably more.

Before you excuse someone of speaking 'twaddle' as you put it, make sure you're comparing oranges with oranges and that you understand the fundamental basics of how a business runs.

olias

Neil_in_Bristol wrote: »

If I could get a repayment mortgage on my current house for £200 more than I'm paying in rent, I'd jump the the chance. It's more like £600.

That's because I'll bet you are talking about a huge LTV mortgage. My point, was that by starting small, with a cheap property, if you are canny, you gradually trade up whilst lowering your mortgage each time, so you end up with a decent house and low mortgage.
I'm not saying this is the case with you, but in my experience (with neices, nephews, friends kids etc), they all expect and want their first house to be a 3/4 bed detached with a garage and garden in a nice area and expect it to be cheap enough that they can afford it, because todays generation has been brought up on instant gratification. How many youngsters now are prepared to start like I did with a 1 up 1 down home in a poor area with a huge mortgage and work bl00dy hard renovating, doing up and reularly moving to trade up? That's the reason I now have a decent 4 bed house, not because they were so cheap and affordable in previous years.

Even if I hide the money I save under the mattress rather than investing it (which is what you're suggesting us renters are doing, presumably) that would be £75,000 over ten years.

My point is, there's nothing inherently "magical" about investing in property. It's no different to investing in shares, or anything else.

But property is different, shares can value a company at billions, when it has little or no tangible assets, they are only valuable as long as the company remains or is likely to become profitable. A property will always have a physical worth, because it will always cost x amount for the land and building costs. If the value of a property did not rise as land prices, materials costs, fees and tradesman wages rose, then it would no longer be viable for anyone to build property and economics dictate it has to remain profitable to build property or society would not be able to move ahead as companies would cease to build

I have three friends who bought houses in 2006 and 2007 and all have ended up with nothing but tens of thousands of pounds of negative equity. It's a particular problem for one who has split up from her husband and needs to move.

They were unfortunate to buy at a bad time, but as everyone knows, property is a long term investment, and that negative equity will at some stage be reversed. They could just as easily have lost that money in shares - the difference being, that as I have alluded to above, a company could cease to trade and the shares be worthless, but a house will always have a physical value

I also have friends who have been renting and during the same period have added 30 grand to their savings.

If in 3 years, your friends have managed to save £30000 as well as paying rent and all their other outgoings, then they must be exceptionally well paid people! There are not many people I know who have a spare £1000 a month to put into savings!

Olias

WelshNic

Approx 1 in 4 Brits have no savings, the average figure is just £2000 per person.

Apparently we save something like 2% of our disposable income so those of you with friends with tens of thousands in the bank are definitely in a minority.

Rautavaara

The only bubbles I've seen recently were in my bath

Neil_in_Bristol

WelshNic wrote: »

Apparently we save something like 2% of our disposable income so those of you with friends with tens of thousands in the bank are definitely in a minority.

You're absolutely right, they've done very well for themselves.

If you were to believe some of the posters on this thread, people who rent are some kind of idiots who haven't discovered the obvious magical money-making machine that is owning a house. As I said earlier, there's nothing magical about investing in houses.

WelshNic

Neil_in_Bristol wrote: »

You're absolutely right, they've done very well for themselves.

If you were to believe some of the posters on this thread, people who rent are some kind of idiots who haven't discovered the obvious magical money-making machine that is owning a house. As I said earlier, there's nothing magical about investing in houses.

You seem to be getting a bit emotional about things that haven't quite been said.

I believe that given a choice people would own rather than rent. Personally I hadn't given much thought about buying until my landlord gave me 2 months notice as he wanted to sell, I didn't want to go through that again and ended up buying our first house.

We didn't buy it to make money, we bought it as we needed a home.

There seem to be many FTB'rs on here that are kidding themselves that renting is the sensible option whilst they wait for a fall that may or may not happen, personally I think that's all a bit of a nonsense.