Reply to: Question for Ferret

[TimberWolf]

Public sector waste
Quangoes
External consultants
Benefits system
Unworkable IT systems
Civil servants
Fiddling expenses for MP's
Housing illegals
NHS waste
Ruining the education system
etc

Just about anything they've touched.

[TheBigYinJames]

Nothing much will change, whoever is in power, as far as boom and bust is concerned. The problem is cultural rather than anything else - we are a short-term culture, unlike, say, the Germans.
As sure as eggs is eggs there will be another housing boom. And I intend to take full advantage of it as I did the last one.

I'm hoping for 2 years of depressed housing, that should give me enough time to save enough money to buy that smallholding just as they start to rise again. When I bought our current house i did the same thing in the last down dip inthe late 90s, which is why I have a tiny mortgage which is almost paid off now.

[sasguru]

Nothing much will change, whoever is in power, as far as boom and bust is concerned. The problem is cultural rather than anything else - we are a short-term culture, unlike, say, the Germans.
As sure as eggs is eggs there will be another housing boom. And I intend to take full advantage of it as I did the last one.

[Bagpuss]

It's tempting to think that getting Labour out will bring an era of change and stability. I suppose it's doubly easy when you're only in your 20s and don't really remember the last Tory govt - in its final days it was as stupid and corrupt as this one is - that's a symptom of being in power for too long.

Most of the problem is a world recession. Labour can't really help much with that because it's spent all its money on foreign wars and doesn't have any leeway to ease the tax burden in areas which could help keep our economy halfway fluid (like lowering fuel duty, which would help all areas of the economy)

So while it may be cathartic to 'punish' Labour by ousting them at the next election (almost inevitable) it's also unrealistic to think that the plastic Tories in the shadow cabinet now will be able to do anything much except handwave until the world recession eases up.

Of course, interest rates will be determined by the state of the world economy and inflation therefore sucked into the domestic one. Cyberman lives in a Cloud Cuckoo land where the Tories create an economic wonderland by inflating the (already highly inflated) economy while simultaneously controlling inflation.

This wasn't the medicine Nigel Lawson was advocating last night on Newsnight. I think Cyberman is in for shock, the days of easy and free money are over.

[TheBigYinJames]

Public sector waste
Quangoes
External consultants
Benefits system
Unworkable IT systems
Civil servants
Fiddling expenses for MP's
Housing illegals
NHS waste
Ruining the education system
etc

All those too, but every govt has wasted money on those forever, so it's a fixed cost. Where our 'war chest' has gone is the real reason the exchequer has no money to ease the pain of recession.

[DimPrawn]

Most of the problem is a world recession. Labour can't really help much with that because it's spent all its money on foreign wars and doesn't have any leeway to ease the tax burden in areas which could help keep our economy halfway fluid (like lowering fuel duty, which would help all areas of the economy)
.

Public sector waste
Quangoes
External consultants
Benefits system
Unworkable IT systems
Civil servants
Fiddling expenses for MP's
Housing illegals
NHS waste
Ruining the education system
etc

[rootsnall]

Beware the dreaded carrot fly...

Nightmare and undefeatable in an enclosed garden. I've read that you need a large open space in your garden ( ie. like a farmers field ) to stand any chance, I've now got one and will give it a whirl next year !

[TheBigYinJames]

So you are looking forward to the Tories creating a New Labour type boom? Exactly the thing they shouldn't be doing, and hopefully won't. House prices NEED to come down not continue to rise.

It's tempting to think that getting Labour out will bring an era of change and stability. I suppose it's doubly easy when you're only in your 20s and don't really remember the last Tory govt - in its final days it was as stupid and corrupt as this one is - that's a symptom of being in power for too long.

Most of the problem is a world recession. Labour can't really help much with that because it's spent all its money on foreign wars and doesn't have any leeway to ease the tax burden in areas which could help keep our economy halfway fluid (like lowering fuel duty, which would help all areas of the economy)

So while it may be cathartic to 'punish' Labour by ousting them at the next election (almost inevitable) it's also unrealistic to think that the plastic Tories in the shadow cabinet now will be able to do anything much except handwave until the world recession eases up.

[DimPrawn]

House prices can only go up. Everyone knows that.

Or at least that's what "Location Location New Life on a Property Ladder House in the Sun under a Hammer" was saying every evening on BBC, ITV, CH4, CH5, SKY for the last 10 years.

[Bagpuss]

I think a few people will find a surprise with house prices after the Tories get in. I believe that HIPS is having a seriously negative effect, and thankfully they have vowed to abolish this silly expensive bureacracy.

Lower interest rates next year plus hyper inflation could actually have a very positive inpact in pushing house prices upwards within 2-3 years, coupled with Tory policies.

Time will tell, but the problem with being out of the market is that you could miss the boat.

So you are looking forward to the Tories creating a New Labour type boom? Exactly the thing they shouldn't be doing, and hopefully won't. House prices NEED to come down not continue to rise.

[rootsnall]

I believe that HIPS is having a seriously negative effect

Sod all to do with it ! Possibly 0.0000001% !?

Well done Ferret, I'm a bit jealous, my timing was exactly wrong, eventually bought in the peak month as my Mrs was starting to crack. We did flog something at the same time and got rid of my Mrs original house so not a disaster but if only !!!!!!

I think you'll be safe now that the falls have kicked in and I'd be preparing for a wait of a few years if you really want to make a killing. The bottom last time gave you a couple of years before things suddenly took off in the SE. I've seen quite a good post somewhere showing newspaper headlines mostly by 'housing experts' ( VIs ) over 6 or 7 years ( 89-95ish ) telling you that things were about to pick up and you need to buy NOW.

In terms of buying I would make embarrasingly low offers on properties that are unoccupied. There won't be real killings to be made until most of the developers and investors have been seen off and only the real scrooge ones ( ie. the ones that survive crashes ) are left to bid against you.

[BrilloPad]

Does nobody remember that the last time the housing market went all to pot was under a Tory government?

And the time before that?

What on earth makes you think that Tory policies will make anything better?

Still, dream on... it's nice that you have dreams. Just don't expect them to come to anything, if they're based on the idea of the Tories bandaging your knee, kissing you on the forehead, and making it all better.

FFS

As a Tory voter at last 6 elections I have to agree with Nick. Particularly the FFS...

[NickFitz]

I think a few people will find a surprise with house prices after the Tories get in. I believe that HIPS is having a seriously negative effect, and thankfully they have vowed to abolish this silly expensive bureacracy.

Lower interest rates next year plus hyper inflation could actually have a very positive inpact in pushing house prices upwards within 2-3 years, coupled with Tory policies.

Time will tell, but the problem with being out of the market is that you could miss the boat.

Does nobody remember that the last time the housing market went all to pot was under a Tory government?

And the time before that?

What on earth makes you think that Tory policies will make anything better?

Still, dream on... it's nice that you have dreams. Just don't expect them to come to anything, if they're based on the idea of the Tories bandaging your knee, kissing you on the forehead, and making it all better.

FFS

[ferret]

Ferret,

you must be feeling pretty smug these days.

How long are planning watch the market fall before getting back in and will you be taking advantage of falling prices to upsize when you re-enter the market ?

Congratulations on your timing.

Milan.

Apologies Milan, just realised I did not answer your questions.

I have no idea how long we will stay renting. Will just watch and see what happens. Observe the carnage from the side-lines. We moved as we had outgrown the house we bought in the late nineties, me working from home and one kid out and another on the way meant we had just run out of room. If we could have extended the house we probably would have done that instead of move.

Now that we are in this situation I cannot imagine moving while prices are dropping the way they are.

We bought when we did as it was cheaper to buy than rent. At this point when we moved it was far cheaper to rent than buy. We pay less than £1k a month for a house that would be valued at about £500k. To buy this kind of place would have required a £300k mortgage which would have been £1500 per month at last year's interest rates so hate to think what it would be like now. Just got to do the maths at the time I guess and make a rational judgement.

Of course the new kiddie means we will not feel like moving for a year or so as well plus the house here is really nice. Apart from the rewiring it is just what we need. Plus the landlord has no mortgage on the place and lives abroad and has no plans to sell or come back here so we should be comfortable here for the next couple of years at least I reckon. I think (bar the hyperinflation scenario) it will take two to three years for house prices to become realistic again and then there is also the possibility of overshoot as the non-thinking public view houses as a "bad investment" and "bound to loose you money".

We are shifting money around to try and maximise interest rates and will probably stick some in 6 or 12 month bonds shortly if interest rates go up a bit. This way we are covering the rent through interest payments and will use the lump sum as a large deposit to up-size when the time is right. That is the plan anyway. Could get whacked along the way but is all part of the game!

[ferret]

I think a few people will find a surprise with house prices after the Tories get in. I believe that HIPS is having a seriously negative effect, and thankfully they have vowed to abolish this silly expensive bureacracy.

Lower interest rates next year plus hyper inflation could actually have a very positive inpact in pushing house prices upwards within 2-3 years, coupled with Tory policies.

Time will tell, but the problem with being out of the market is that you could miss the boat.

When will the tories get in though? Not in time to save the rapid deflation of house prices that we are seeing now. At 2% (plus) a month falls I am £5k a month better off not having the house at the moment.

Who in their right mind would drop interest rates with inflation as it currently stands?

Yes, hyper inflation could push up houses but with wages rising to compensate the lower value of currency then it would not be an issue - as we sold at the top of the market then jumping back in if things look to be heading that way would not be a big deal.

I still reckon we will see 30-50% drop in house prices over the next three years - at 2.5% per month, as we have seen for the last couple of months, we could be over 40% down on today's in two years.

I have been expecting the bubble to pop for the last three years though so I am not often right. Only got out of the house we were in as needed more room and was not prepared to get a massive mortgage so the only option was to rent. In this position due to the way it worked out rather than simply trying to play the market. I am not worried about how things worked out, just thankful I have a level-headed partner who could see the madness is squandering all our savings plus 50% of income on a mortgage to get the size of house we need at the minute.

Cheers Lucy - am sure the sprog and Mrs F will be fine. Health and welfare put things like cash in perspective. I grew up poor so know that as long as I have a roof over our heads and food in our bellies we will be OK, the rest of it it just needless cack to be honest. Apart from the glorious Passat of course As for food in our bellies the house here has a glorious garden. The first of the potatoes will be ready this week, the peas are all in flower, the runner beans are ready to crop plus the sweetcorn, onions, sprouts, courgettes and pumpkins are coming on nicely. Shame the carrots and parsnips did not emerge, think it was dodgy seeds so will be chucking some more in this weekend.