HPC thread of the week

Crashy_Time

Graham_Devon wrote: »

Doubt it will spread to Edinburgh. Aberdeen is quite unique in that it's prosperity leans quite heavily on the oil sector.

There was a lot in the news about Aberdeen and oil below $60 a barrel earlier this year (could have been last year). Believe they got a bung by the government to keep things going. Not sure if that bung still exists, but can only assume it does with oil where it is now.

A report on the steal industry and the lack of support actually looks at how Aberdeen was rallied around.

No doubt someone will be along soon to tell me that it's different this time as it's Aberdeen.... or something.

Others, (who are after money), have suggested that Aberdeen could be a mini version of detroit if oil prices remain where they are in the medium term.

Time will tell I guess. But South Wales has never really re-covered from it's coal mining days.

Well they told us that if Grangemouth oil refinery closed down there would be serious consequences all over Scotland for many many businesses, I think North Sea oil more or less shutting down is a magnitude bigger than that, don`t you! You have to remember that people from all over Scotland (and the UK) travel (or did before the downturn) to work offshore in Aberdeen, they will have mortgages, BTL`s etc. supported by oil money, and many probably joined the BTL mania in Aberdeen itself as well, oil going pear shaped won`t just have consequences that are confined to the city of Aberdeen IMO.

mwpt

Blacklight wrote: »

His master plan appears to be:

1) amass large wealth and keep it in the bank (saving at historically low interest rates)
2) take said pitiful interest and flush it down the toilet
3) retain smaller value of wealth, having been eroded by inflation
4) gloat about your cunning plan

It's not the most sound financial plan I've seen.

Here is a two bedroom house sold for £615k (we don't know final price):
http://www.rightmove.co.uk/property-for-sale/property-36173544.html

Here is a similar two bedroom house for rent for £1550 on the same road:
http://www.rightmove.co.uk/property-to-rent/property-37388715.html

If I had £615k in cash, I could invest it in dividend stocks paying say 4% which is ~£24k pa which would more than cover the rent for the same house, and that's without maintenance. Of course rent would rise, but so would the value of your investment.

wotsthat

mwpt wrote: »

Here is a two bedroom house sold for £615k (we don't know final price):
http://www.rightmove.co.uk/property-for-sale/property-36173544.html

Here is a similar two bedroom house for rent for £1550 on the same road:
http://www.rightmove.co.uk/property-to-rent/property-37388715.html

If I had £615k in cash, I could invest it in dividend stocks paying say 4% which is ~£24k pa which would more than cover the rent for the same house, and that's without maintenance. Of course rent would rise, but so would the value of your investment.

Both the buying and rental prices look mental but Londoners know best.

If the ultimate aim is to buy a house and the cash is available then why not just get on with it? With your plan there's the risk that investments/ dividends will fall AND house prices might move out of your reach.

Crashy chose your option just on a different scale. He's paid nearly twenty years rent, house prices have at least doubled in that time, savings rates have dropped off a cliff and his landlord must be making close to a double digit yield.

Buy and be done with it.

mayonnaise

Crashy_Time wrote: »

Loving this thread just now, if it spreads to Edinburgh I might be able to knock my rent down to 350 p.m! http://www.housepricecrash.co.uk/forum/index.php?/topic/48163-aberdeen-aspc-stats/page-199#entry1102850463

A thread on Aberdeen house price stats running for almost 8 years and 3000 posts. Only on HPC. :rotfl:

mwpt

wotsthat wrote: »

Both the buying and rental prices look mental but Londoners know best.

If the ultimate aim is to buy a house and the cash is available then why not just get on with it?

I'm point out workable alternatives that might suit certain people and why the "plan" above might not be as ludicrous as people on autopilot think.

Why wouldn't someone buy... Maybe they think property is overvalued, maybe they prefer liquidity, whatever.

With your plan there's the risk that investments/ dividends will fall AND house prices might move out of your reach.

But not the other way round, right? Can't lose with bricks and mortar.

Buy and be done with it.

Is there any case you'd consider it not worth buying? At all?

TheeMaskedTurnip

The crashaholics are preparing for their usual doom and gloom Christmas family gatherings. Swapping tips on how to avoid the eternal questions, why is a middle aged person still renting? When are you going to grow some balls do something with your life and buy? What's the point of paying off your landlords mortgage when you could be paying off your own?

mayonnaise

TheeMaskedTurnip wrote: »

The crashaholics are preparing for their usual doom and gloom Christmas family gatherings. Swapping tips on how to avoid the eternal questions, why is a middle aged person still renting? When are you going to grow some balls do something with your life and buy? What's the point of paying off your landlords mortgage when you could be paying off your own?

Christmas, HPC style. :rotfl:

Well it's that time of year when we're forced to tollerate people we'd rather avoid.

I've already stopped seeing several people now as I can't stand the drone and I'm adding another one to the list after the weekend.

It's tragic that we now dread contact with over-rewarded untaxed low interest rate QE backed parasites.

And that sort of pitying looking down their noses at you and almost tut tutting. Yep. Another Christmas.

At wider Christmas Gatherings I'm now fed up with the nickname D&G. (Doom And Gloom.)

I think I will stay in the kitchen and chat with the dog.

wotsthat

mwpt wrote: »

I'm point out workable alternatives that might suit certain people and why the "plan" above might not be as ludicrous as people on autopilot think.

Why wouldn't someone buy... Maybe they think property is overvalued, maybe they prefer liquidity, whatever.

But not the other way round, right? Can't lose with bricks and mortar.

Is there any case you'd consider it not worth buying? At all?

It's a perfect plan for someone who wants to take a punt they're able to call house and share prices.

I spent a chunk of the nineties in negative equity. Didn't even know until I came to sell - I purchased for reasons other than house prices. If someone can't cope with the thought of their house falling in price or don't value the benefits of ownership I did then renting is perfect for them.

For most people if they attribute a value to home ownership, have found a house they like, have the cash and realise they aren't able to predict house and share prices then buying is the way to go. I'd pay a premium to buy and I feel very fortunate the opposite has been very much the case.

I can't get past the imputed rent benefit of buying. I'd consider renting only for a short term work contract and might rent for a couple of years as part of a forming plan to commute a long distance.

ukcarper

mwpt wrote: »

I'm point out workable alternatives that might suit certain people and why the "plan" above might not be as ludicrous as people on autopilot think.

Why wouldn't someone buy... Maybe they think property is overvalued, maybe they prefer liquidity, whatever.



But not the other way round, right? Can't lose with bricks and mortar

I would say it's more risky, depend on your income the dividends would be liable to tax, dividends are variable and could be withdrawn. Share prices can go down just as easily as house prices. The bottom line being no matter what happens to house prices you still have a home, but if shares crash you have nowhere to live.

mwpt

ukcarper wrote: »

I would say it's more risky, depend on your income the dividends would be liable to tax, dividends are variable and could be withdrawn. Share prices can go down just as easily as house prices. The bottom line being no matter what happens to house prices you still have a home, but if shares crash you have nowhere to live.

Yes, that is fair.

In that case, in the example I gave, you might substitute investing in stocks with investing in BTL for similar returns.