Originally posted by eternalnomad
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House prices!!
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I've seen much of the rest of the world. It is brutal and cruel and dark, Rome is the light. -
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Originally posted by Lucifer BoxFranco, did you buy that exclusive SW19 apartment in the end?I've seen much of the rest of the world. It is brutal and cruel and dark, Rome is the light.Comment
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Franco, you can't count the delivery chick from Pizza Hut as a good looking girlie who's keen to come on in.Comment
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A sure sign that the property market is way overpriced is the fact that you can now rent cheaper (and in some cases significantly cheaper) than buying the same place.
http://www.economist.com/finance/dis...ory_id=4079027Comment
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Another worrying lesson from abroad for America is that even a mere levelling-off of house prices can trigger a sharp slowdown in consumer spending. Take the Netherlands. In the late 1990s, the booming Dutch economy was heralded as a model of success. At the time, both house prices and household credit were rising at double-digit rates. The rate of Dutch house-price inflation then slowed from 20% in 2000 to nearly zero by 2003. This appeared to be the perfect soft landing: prices did not drop. Yet consumer spending declined in 2003, pushing the economy into recession, from which it has still not recovered. When house prices had been rising, borrowing against capital gains on homes to finance other spending had surged. Although house prices did not fall, this housing-equity withdrawal plunged after 2001, removing a powerful stimulus to spending.
Interesting link there XCM.
I lived in NLands during the mid 90s so this indeed was the case.
Property booming, firms crying out for contractors...come 2000 then it all went pear shaped.
Nobody could move property, loads of contractors found themselves out of work.
Rates dropped massively and the situation is still grim in the NL, apart from the hookers who doubled their prices from 25 to 50 Euros overnight, Nlands seemed to suffer more from Euro overpricing than France for example.
I think that was another factor in the Dutch economic malaise which like the January fog permeates the country.
Prehaps the above scenario would seem the most likely outcome for the UK, property prices will not so much crash as stagnate, but its the UK consumer sector, like the NLands, that will crash, so look out for more closed retail outlets and layoffs in the retail sector.Last edited by AlfredJPruffock; 30 January 2006, 12:47.Comment
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Originally posted by FranckoSuch as? I don't see many examples of cheaper rents out there. I pay 1200 for the mortgage and the flat next to mine (very similar) has been given 1200 as rent. And I gave only 5% deposit. Well, I don't know about you lot but for me the only money I have saved in my life was the profit on property (+ what I paid already on the mortgage). Money is so easy to spend..... at least with a house you don't have to worry about and eat beans on a candlelight. At the end you get something, whether is not the best investment or not, it is the only way to save money if you enjoy life.
http://www.rightmove.co.uk/viewdetai...a_n=1&tr_t=buy
Asking price is : £642500
An 25 year INTEREST ONLY mortgage (i.e. renting from the bank) @ 5.0% would cost you £2677.08 PCM
A 25 year repayment mortgage for the same amount @5.0% would cost £3798.91 PCM
And here is the very same property available for rent at £2500 PCM
http://www.rightmove.co.uk/viewdetai..._n=3&tr_t=rent
So in the above example you can rent the property and save yourself £177.08 PCM and not have any hassles with property maintenance etc.
When the mortgage rates increase the case for renting will becoming even stronger.
If you bought a property a few years ago then its not a big deal - but my point is that anyone buying into the market now is madComment
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Originally posted by eternalnomadexample of a typical 4 bed family house in a "nice" location commutable to london (just happens to be one I have been looking at and not one I specially selected to make my point) :-
http://www.rightmove.co.uk/viewdetai...a_n=1&tr_t=buy
Asking price is : £642500
An 25 year INTEREST ONLY mortgage (i.e. renting from the bank) @ 5.0% would cost you £2677.08 PCM
A 25 year repayment mortgage for the same amount @5.0% would cost £3798.91 PCM
And here is the very same property available for rent at £2500 PCM
http://www.rightmove.co.uk/viewdetai..._n=3&tr_t=rent
So in the above example you can rent the property and save yourself £177.08 PCM and not have any hassles with property maintenance etc.
When the mortgage rates increase the case for renting will becoming even stronger.
If you bought a property a few years ago then its not a big deal - but my point is that anyone buying into the market now is mad
So they will continue to buy because *its a good thing*
Let them eat cake.Comment
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Asking price is : £642500
An 25 year INTEREST ONLY mortgage (i.e. renting from the bank) @ 5.0% would cost you £2677.08 PCM
A 25 year repayment mortgage for the same amount @5.0% would cost £3798.91 PCM
And here is the very same property available for rent at £2500 PCM
http://www.rightmove.co.uk/viewdetai..._n=3&tr_t=rent
So in the above example you can rent the property and save yourself £177.08 PCM and not have any hassles with property maintenance etc.
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I don't think 5% is a fair interest. You should go lower and then you will equalise the 2500 rent. I think the property is overpriced too but again there is a shortage of big houses in London so they can ask for a premium.I've seen much of the rest of the world. It is brutal and cruel and dark, Rome is the light.Comment
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Originally posted by eternalnomadAn 25 year INTEREST ONLY mortgage (i.e. renting from the bank) @ 5.0% would cost you £2677.08 PCM
.....
And here is the very same property available for rent at £2500 PCM
You also need to consider what the vendor gets from it. They would be lucky to get more than 4.5% on the money. That is about the yield they will get after agents fees. They perhaps think the maintenance requirement is an acceptable risk premium in exchange for the change in value.Comment
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