House Price Crash Discussion Thread

carolt

dweeby wrote: »

We can speculate about many things, but your point above is simply wrong.

For example:

The best buy cash ISA on this website used to be NSI - this has just reduced its interest rate.

Best bank accounts used to be ICICI and Icesave, they've both just reduced their interest rates.

I have a Lloyds TSB on-line saver, they've just reduced the interest rate.

With the BOE predicted to lower the base rate again in April, savings rates are downwards not upwards at the moment.

Your comment about buying a home at the moment "DON'T DO IT" is a reasonable point of view, but the picture is not clear and peoples circumstances are different.

A simple "DON'T DO IT" is totally over-simplistic, it may be good advice for some - but not all. For example, what area would you target these comments at? I think even on this thread, most would acknowledge that not everywhere will be affected equally by any crash. And peoples circumstances are different.

Is reading not your strong point? Or was my post too long and you couldn't quite make it to the end??

I didn't say DONT DO IT - I said:

"The renting v buying question has an extremely clear answer: DON'T DO IT, unless you're trading down, are able to buy well below current market value, and are absolutely sure you can afford it if the worst comes to the worst.

If you're a FTB, don't buy at all."

Not the same thing at all. If you look back at my previous posts, you'll find that I don't always take the simplistic never, ever buy approach (except for FTB's, where only a very exceptional set of circumstances would ever make me think buying now was a good idea).

On the contrary, for those planning to trade down, this is probably the best possible time to sell up, realise profit in cash and then buy that retirement flat/home in the sun/easy to manage bungalow etc.

But for anyone equity poor, it's a lousy time to buy. I fail to see how you can argue with that, in a general sense.


And re savings rates, see:

http://www.thisismoney.co.uk/credit-and-loans/article.html?in_article_id=434492&in_page_id=9

"Wealthy savers have greatly benefited from rising savings rates over the past year, to the detriment of those who depend on loans, according to new research.

Savings and loan rates have consistently risen since July, despite the Bank of England making two base rate cuts since then."


I'm not making this up - where are your sources for what you claim????

MissMoneypenny

dweeby wrote: »

We can speculate about many things, but your point above is simply wrong.

For example:

The best buy cash ISA on this website used to be NSI - this has just reduced its interest rate.

A & L is now offering 10%
http://www.alliance-leicester.co.uk/savings/index.asp?page=home&ct=primarymenu

jamescredmond

carolt wrote: »

Is reading not your strong point? Or was my post too long and you couldn't quite make it to the end??

I didn't say DONT DO IT - I said:

"The renting v buying question has an extremely clear answer: DON'T DO IT, unless you're trading down, are able to buy well below current market value, and are absolutely sure you can afford it if the worst comes to the worst.

If you're a FTB, don't buy at all."

Not the same thing at all. If you look back at my previous posts, you'll find that I don't always take the simplistic never, ever buy approach (except for FTB's, where only a very exceptional set of circumstances would ever make me think buying now was a good idea).

On the contrary, for those planning to trade down, this is probably the best possible time to sell up, realise profit in cash and then buy that retirement flat/home in the sun/easy to manage bungalow etc.

But for anyone equity poor, it's a lousy time to buy. I fail to see how you can argue with that, in a general sense.


And re savings rates, see:

http://www.thisismoney.co.uk/credit-and-loans/article.html?in_article_id=434492&in_page_id=9

"Wealthy savers have greatly benefited from rising savings rates over the past year, to the detriment of those who depend on loans, according to new research.

Savings and loan rates have consistently risen since July, despite the Bank of England making two base rate cuts since then."


I'm not making this up - where are your sources for what you claim????

sound advice to the ftb'ers.

I gave the same to my kids. only the gullible would go anywhere near the market.

I'm amazed that this debate continues when all the available evidence points to a reversal.

if the doom mongerer's worst call (30% drop - hsbc) was taken with a sack of salt and called 15%, this figure still represents a serious slip.

and an ftb'er would find him/herself in negative equity to the tune of £22.5k on a £150k buy within a couple of years.

my generation stands guilty of encouraging a 'debt is OK' culture over the past decade, ranging from tuition fees to MEW.

and before anyone uses the 'personal responsibility' argument, they should know that we're all subjected (and sometimes susceptible) to subtly persuasive pressures, even if it comes in the form of a TV commercial.

Yet still there are posts here that (unconsciously, perhaps) promote investment in what is clearly a detiorating asset. Great!!

the ftb'er should take the advice and keep out.

WTF?_2

carolt wrote: »

And re savings rates, see:

http://www.thisismoney.co.uk/credit-and-loans/article.html?in_article_id=434492&in_page_id=9

"Wealthy savers have greatly benefited from rising savings rates over the past year, to the detriment of those who depend on loans, according to new research.

Savings and loan rates have consistently risen since July, despite the Bank of England making two base rate cuts since then."


I'm not making this up - where are your sources for what you claim????

Just looking around at typical offerings, headline savings rates aren't going up and NS&I are for sure getting less attractive. That's because they are so closely linked to the government though and economic uncertainty means that people put the cash there as a safe haven rather than a vehicle for interest.

However, you get some stonking 'savings bond' offers which are usually only available for a short time, so you have to be quick on your feet. I'd guess they are a sign that the particular bank needs hard cash, fast.

merlinthehappypig

!!!!!!? wrote: »

Just looking around at typical offerings, headline savings rates aren't going up and NS&I are for sure getting less attractive. That's because they are so closely linked to the government though and economic uncertainty means that people put the cash there as a safe haven rather than a vehicle for interest.

However, you get some stonking 'savings bond' offers which are usually only available for a short time, so you have to be quick on your feet. I'd guess they are a sign that the particular bank needs hard cash, fast.

I've checked the interest we are getting.

Overall we are getting 0.3% more interest now than we were 6 months ago, despite the base rate reductions in the meantime.

Carolt and !!!!!! are both right.

The typical high street headline rate for savings has reduced as !!!!!! says, but, as carolt says, savings rates have steadily increased despite the base rate reductions.

Yes, you have to be able to move money quickly and it is the short to medium terms bonds that have made the difference.

We have a large proportion of our money with NR at a fixed rate for 1 year of 6.9% with immediate, no penalty withdrawals. We couldn't get that sort of rate when the BoE rate was at it's peak last year. It was a short-term offer and isn't available now, but there are plenty of 6.5% deals or thereabouts, more if you can tie the money up for a bit.

Plenty of ISA's at 6.25%, equivalent to over 7.5 % for a standard rate taxpayer.

I worked in finance for over 20 years and cannot remember another time when the BoE rate was so meaningless. The gap between the BoE rate and the savings rates available is the largest I have ever seen and mortgage rates are rising irrespective of BoE rate cuts.

I was going to post some figures about the renting v buying debate, but can't be bothered. Plenty of people have put forward figures that definitively show that now is a stupid time to buy, on financial grounds alone and they are ignored. I've put forward hard evidence time and time again, but the 14 year old schoolboys posing as economic gurus just keep on spouting out the same nonsense.

BobProperty

John_Pierpoint wrote: »

RIP:

http://www.timesonline.co.uk/tol/comment/obituaries/article3104632.ece

Sorry to hear about that. The guy was a real "larger-than-life" character. I think I've read one or two of his books, he was into Kondratieff Wave Theory IIRC. I also think I remember seeing him on some TV discussion where he was a real "arch-capitalist" and out-thought and outmanoeuvred the left of centre opposition he faced that day. He came a long way from selling newspapers as a kid (again IIRC) to living the high life in Monaco.

pickledpink

The problem with investing equity from a house sale into a savings account is that the interest doesn't always cover the monthly cost of a rental. On top of that, you are not adding to your capital by compounding the interest and could find that with inflation your savings eventually become less and less in terms of value.

It's also very tempting when you have easy access to money to dip into it! Debt and hard times can be very depressing, and some people find it very tempting to treat themselves to the odd holiday; new car; gadgets etc..........when they're feeling down.

I know of a woman who after her divorce (in the early 90's) put her share of the matrimonial home (£100,000) into a savings account. She then rented a flat whilst deciding what to do....took a cheap package holiday..then another...then needed a car........eventually lost her job...........and within 3 years all her equity from the house had gone! She's now renting a dingy one-bed council flat and kicks herself every day for being such a fool.

I know not everyone is as silly as that - but when debt is looming, and you have easy access to money - it is very, very tempting to treat yourself - again and again and again!

There was actually a report about that sort of scenario in one of the
broadsheets over the weekend. It advised people to stay put if they could.

WTF?_2

pickledpink wrote: »

It's also very tempting when you have easy access to money to dip into it! Debt and hard times can be very depressing, and some people find it very tempting to treat themselves to the odd holiday; new car; gadgets etc..........when they're feeling down.

Sorry, but this idea of 'treating yourself' with something stupidly expensive when you're down has only become popular in the last few years when people have had access to easy money through credit cards or loans. (Your example was of someone who received a once off cash windfall).

Once we're well into the slump I feel pretty confidant in predicting that most people without cash will not be in the position of where they can just 'treat themselves' as their access to credit will be severely curtailed.

People need to understand what the 'credit crunch' actually is going to mean once recession sets in. It will rapidly extend into every part of life where credit is used, including personal credit cards, MEWing and loans/overdrafts. Having no cash will indeed mean, having NO money. No more just whacking it onto a credit card with a huge limit.

People will, shock horror, have to live within their means. What a frightening concept for a generation used to having what they want, when they want it courtesy of the plastic.

merlinthehappypig

We've actually experienced the complete opposite of what pickledpink suggests.

It was very easy to spend someone else's money ie. the bank's, when we didn't have any. Now that we have the money in the bank we are very reluctant to spend any of it.

It's all a matter of perception. That's why we (the country) are in this mess. If the banks gave the loans out as cash and you actually had to part with it for the car, TV or whatever then it might not have seemed like such a good idea. Just signing a form and driving away is simple.

[Deleted User]

pickledpink wrote: »

I'm not an old biddie yet!;)

Of course, silly me! your childish responses are proof of that.