HPC thread of the week

mwpt

MFW_ASAP wrote: »

I was on here in 2006/2007 when the bears were talking about a crash and I agreed with a lot of their analysis. I thought about my family's financial position and decided to make us as 'crash-proof' as possible.

This didn't include 'going all in' like the HPC guys seem to have to do by selling their houses and moving into rented accommodation. For me, it meant paying off our unsecured debts, blitzing our secured debt (mortgage) and building up a 'safety fund'. I also moved my pension out of equities and into cash.

I don't know if I classify as a bear, since I bought in 2014 and have modified my view to include government actions but, even if I put on a bear hat I can't fathom ever selling to rent unless I was forced or there was very very very good reason to do so (like I needed the cash for some other very sure investment opportunity). Surely selling to rent is the definition of speculating on the market, whereas most of the HPC crew advocate against that, just wanting a home. I have a home now, I can't imagine selling it to speculate.

My house and stockmarket investment gains are therefore entirely down to foresight and skill and, frankly, a lot of cojones) and I make sure that the bears (those that haven't fled in shame) know about it!

If something had gone the other way, it wouldn't have looked so skilful though.

Btw, do you ever share your stock picks in advance?

chucknorris

mwpt wrote: »

Of course, we're all biased. We have confirmation bias, obviously. And people here also suffer from hindsight bias. Those of you who have made a mint of property investment like to think this was entirely down to foresight and skill. It could never have gone any other way, right?

There are no guarantees in life, you have to decide what you want and how much you are prepared to risk to achieve it. If you aren't prepared to take the risks necessary to achieve what you want, then you have to reconsider what you want to achieve. The risk of failure is always there at the start of a venture, and it has to be both endured and managed, until hopefully those risks start to fade with the passing of time as you successfully manage the situation.

carslet

caronoel wrote: »

Only a fool would predict that a house price crash will never occur.

It is a natural part of the boom and bust cycle of economics.

Few here would deny a house price crash is possible, but it is extremely unlikely in the current economic climate and at this stage of the economic cycle.

When it does happen though, the government will be at the ready to soften the damage for home owners – of that, I am sure.

House price crashes always happen and always will, some places have never recovered from the last one and are still falling, I know as I work in some of the areas.

There will not be the 50% or 60% falls that HPC crowd are predicting there will more likely be 20-25% and that would not bother me, as there would be another 10 years of rises after that,

Whatever way you look at it, buying a house is a good investment,

I was a supporter on HPC when family said I was a fool, and it turned out they were right, the best thing I have ever done is get myself a couple of houses.

wotsthat

mwpt wrote: »

Of course, we're all biased. We have confirmation bias, obviously. And people here also suffer from hindsight bias. Those of you who have made a mint of property investment like to think this was entirely down to foresight and skill. It could never have gone any other way, right?

Even the crashers share the same bias.

I find it quite amusing that such a big deal is made of the difference between HPC'ers and the 'rampers'. Fundamentally they all agree buying is better than renting - some have purchased already but others prefer to wait for (or need) a crash.

It's even more amusing that some think those saving to buy a house are morally superior to those that have already bought in.

mayonnaise

MFW_ASAP wrote: »

My house and stockmarket investment gains are therefore entirely down to foresight and skill and, frankly, a lot of cojones) and I make sure that the bears (those that haven't fled in shame) know about it!

Well done matey.

MFW_ASAP

mwpt wrote: »

If something had gone the other way, it wouldn't have looked so skilful though.

Well there is always a risk in any investment, but you have to weigh the percentages. I invested back in equities when the FTSE was 3500 as I didn't believe it would fall much further. It could have, but realistically not by much more. However, shares are easy to sell, so if they had continued to fall, I could have pulled out at a bit of a loss and re-invested when they had bottomed.

I bought the house when the BOE had reduced rates to 0.5% and I couldn;t see any economic improvement anywhere on the horizon to make me think rates would rise anytime soon. When I did see 'green shoots' about 18 months back, I mortgage (fee free) into a 2.x% five year fix.

If it had 'gone the other way', solutions are available. You just have to adapt to the situation rather then being rigid in your 'beliefs' like the bears

mwpt wrote: »

Btw, do you ever share your stock picks in advance?

About a year ago, when the FTSE was hitting a record 7000 points, I announced that I was pulling out of equities again and going to cash. I day traded on the various corrections (and mentioned some of the deals such as Tesco, etc.) until the market bottomed and I bought back in. All nicely documented on a thread.

westernpromise

mwpt wrote: »

Those of you who have made a mint of property investment like to think this was entirely down to foresight and skill. It could never have gone any other way, right?

Given the fundamentals, not really, no.

1999 to 2008 was quite good for London landlords and 2008 to date has been astonishing. All I ever expected was more of the quite good.

What I do find odd about the crash trolls though is their selective myopia to certain factors that would give more serious people pause for serious thought about the path they are on.

The most obvious is the risk to their rents in the event of a crash. The lesson of 1990 - which is all there in the Bank of England charts they're so keen on - is that when house prices fall, rents rise. Many of them would get a major cash shock from a completely unexpected direction if house prices ever did fall. They are sitting there thinking that because they rent, bad news in the property market can only ever happen to other people; wrong.

Then there is the fact that., as noted above, nobody sells in a crash unless they need to, and in the last downturn interest rates went down, so almost nobody needed to. Transaction volumes plunge, basically.

In addition, deposit requirements go up and employment levels go down, so that it is harder for most to buy in a dip than in a rally. This, of course, has a lot to do with why a dip is happening, But the crash troll mindset seems to be that their own purchasing power will be completely unaffected in a crash, and all will be as before except that their £100k will now get them a house in Northampton where before it wouldn't.

Then there is the tendency to applaud things that actually make supply worse and thus reduce the prospect of a crash: higher stamp duty, higher CGT, more tax on letting, and so on. The HPCers have cheered all of these without noticing how it feeds straight through as higher prices.

Probably the main thought failure over there, though, is the abject short termism. They remain dedicated to the idea that they can buy the dips and save money. But considered over the correct timespan for the biggest buy of your lifetime - which is, of course, your lifetime - the buying price before and after a crash are of absolutely trivial economic consequence, Over the last 25 years the average property has inflated by 300%, so a £100k property then is worth £400k now. If you'd mistimed it 25 years ago and paid £120k for that place that you now own mortgage free, how much would you care?

Only a speculator should really think about timing in that way, which is ironic considering they hate speculators; but speculation is what wishing for a crash is. It's just unsuccessful speculation, from a short position. On balance it's quite good that they've stayed out of the market; it's made it slightly cheaper for all the rest of us.

Aberdeenangarse

wotsthat wrote: »

It's possible to be an excellent debater, have high intellect and a logical mind, to have high morals and to possess all the answers - and still be very very wrong.

There's one poster like this on HPC who I find very convincing but he STR'ed in the South-East in 2011/12 so despite his excellent analysis was no better equipped to make the correct call than anyone else.

That'll be Venger. He's been mass debating on HPC for as long as I can remember!

gadgetmind

westernpromise wrote: »

Only a speculator should really think about timing in that way, which is ironic considering they hate speculators

So do I, at times.

Old lady nearby died, small bungalow, large plot, nice area, relatives got a surveyor in to check out the house to see what needed doing before selling, and also to comment on possible planning consent. Surveyor offered them £600k, cash, and the silly sods accepted it.

Planning permission then went in for demolishing bungalow and putting up 3x 5 bed detached. Turned down because density much greater than elsewhere in area, etc. We expected fresh planning for 2x 5 beds, but instead their immediate neighbour (who's just paid £1.7m for the house) offered the chap £850k, and deal now done. It's now going to be knocked down and turned into more garden for Mr & Mrs £1.7m.

Surveyor pockets £250k for doing not much.

mystic_trev

mayonnaise wrote: »

Yep. That same Jonathan Davis who gave this interview to the BBC in 2009.

I like this bit....

You do not have a 15-year house price rise, ending in the biggest bubble of all time and the biggest economic and financial collapse since World War One and a house price crash which only lasts 18 months.

I'm surprised the bloke can even show his face, yet alone be a Financial advisor! :rotfl: