'We've reached a tipping point' Signs of house price weakness

CLAPTON

lisyloo wrote: »

Thanks for your long post windsofchange. I'm sure you have some good points, but I have guests arriving today so I'll look back later.

We are currently renting in London.
At the current time we couldn't afford our flat but that's because we both voluntarily receive a smaller salary and put a lot of money directly into pensions instead (saves around 30-40% in income tax, Ni, employers ni, corp tax).
We could put ourselves into a position to buy by paying ourselves more, but DH would have to do that for at least 1 year as he's self employed and it would need to reflect in his annual accounts and of course there is a cost circa 40%.

I don't know how long we will be in London (best guess 6.5 years) but my calcs show with the buying/selling costs, CGT and the cost of receiving the salary (vs pension) that we'd need to stay for 9.5 years to make it pay. If prices seriously crash then I'd reconsider, but I don't believe there will be a proper crash in centralLondon. Correction, faltering - yes, but I don't think a serious loss of value in on the cards (barring Ebola type event).

We're an example of people who are priced out by choice - in our case tax mitigation - but we could change that with sufficient motivation.
So it seems wrong to me to regard being priced out as a permanent state although I would add that's it's certainly a lot harder than in the past (I've bought twice in the past once with zero deposit and a second time by part exchange and both times it was a synch comaparec with what we'd need to do now).

off topic but why would you need to consider cgt if you bought a property to live in?

Crashy_Time

Joeskeppi wrote: »

Me too. I have sympathy for people who have been genuinely screwed over by what's happening but that's not the case here. A second generation rich kid who has been gifted more opportunities than the vast majority and wasted it, there is only one reason they don't own a house and it's plain to see what it is.

He maybe just doesn`t want to be up to his neck in debt to rent a spot on Spam Valley during the biggest property bubble/Ponzi of all time?

ukcarper

Crashy_Time wrote: »

He maybe just doesn`t want to be up to his neck in debt to rent a spot on Spam Valley during the biggest property bubble/Ponzi of all time?

1971 to 1980 average price £4741 to £23497 5x
2001 to 2010 average price £83976 to £162971 2x

System

Someone hasn't read the last few pages.

Crashy_Time

Joeskeppi wrote: »

Someone hasn't read the last few pages.

That`s right, I was just having a dig at you :rotfl:

wotsthat

Crashy_Time wrote: »

I`m predicting that when the next crunch comes you will be sorry Wotsit.

In January 2009 my mortgage rate was 5.48% and by the April it was 2.5%. As I was a good little bear who'd been making overpayments I took them all out and have been making better saving/ investment returns than the interest rate charged on the debt ever since.

It'll be the sixth birthday of the 0.5% base rate soon. I'll be having a little party - I've paid less to house my family in a house than you've paid as a single bloke living in a series of flats, HMO's and house shares.

Another crunch you say? Bring it on!

lisyloo

off topic but why would you need to consider cgt if you bought a property to live in?

It's a second home (our main home is 5 hours return door-to-door commute).
We should be able to avoid most of the CGT by nominating the London flat as our PPR for a period of time.

The main issue for us is affordability, so I'll be watching closely.
I'd be suprised to see significant drops in central London (excluding silly over inflated asking prices) but I would be delighted to be wrong about that.

Bubble_and_Squeak

windofchange may i suggest you become a buddhist

KR200

Windofchange wrote: »

I knew that one was coming up. I'm not ashamed at all, or why post it up on here? I've already admitted to being a spend-thrift. It has no relevance to a discussion on property prices. I should probably have just gone bankrupt and run away hey? I'm not asking for sympathy for the past - as I said, my debts will be gone in a year and so will I.

When you have a proper argument come back. Until then, happy dreams of bubbles and a London Utopia full of suits and homeless middle classes.

The world marches on and whilst the more prudent of society may have knuckled down and taken advantage of your good fortune you !!!!!! it all away. Youth is wasted on the young so I will not judge you on that.

However you seem to think that you should be able to live in Zone 2-4 and it's your god given right.

Well if it's so crap here perhaps you'd care to tell me why 200,000 a year are queuing up at our borders to set up home and make a go of it?

I love classic cars and they have gone through the roof. House prices have nothing on these things. Some cars have leapt 50% in a year. I'm gutted they're out my reach but that's life. So what did I do? I set my sights lower. It's not my "right" to own a 70's racing 911 or 60's Zagato Alfa.

The entitlement culture of the indigenous specie is coming to an end. The only thing that angers me is that there are hundreds of thousands of foreign nationals living in London social housing contributing nothing. Thank Blair for that.

Seeing as Mr Smith GB PLC Average voted for that pond life for three consecutive terms I'm of the opinion that the average bloke in the street is getting his just desserts. Blair's cultural marxist legacy has ruined the very essence of the UK. It's now every man for himself.

Good luck. You are going to need it.

carslet

ok might be up north, and maybe not as relevant but a friend put an offer on a house 20% below the asking price 6 months ago, which was refused, on friday he had a call saying if he still wanted it they would accept his offer !!!

I think there is a massive difference between asking and selling prices especially in the north