Trying to buy a house in this area is near impossible

[Mick Mac]

BigED Wrote:

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> I have no problem with IHT - you worked for your

> money, not your offspring or other beneficiaries

> of your will. It's not a tax on the recipient's

> earned income but on an unearned windfall. If IHT

> troubles people so much, they should spend it

> during their lifetime.

Or gift it during your lifetime, before it's too late.

[LondonMix]

That's silly. Most of the people who get hit IHT are paying because they are inheriting a house. Exactly how should people spend or give away the equity held in their house easily before they die. Of course there are ways but it isn't legitimate to be critical of people that don't employ them.

[Mick Mac]

Who was being critical? I was offering a solution.

[LondonMix]

Sorry, comment was more directed toward BigED. However, I am not even against IHT per se

[Otta]

"It's not a tax on the recipient's earned income but on an unearned windfall."

How is the proceeds of a person's property unearned? You work, you buy your home and pay massive interest whilst doing so. Then you die so you pass it on to someone. You earnt that right and it's yours to give away, how do the state suddenly own a portion of that?

[El Pibe]

Wot otta said, you've paid your dues on that money, even as a socialist I don't think all wealth is held on some sort of sufferance from the state.

iht has its roots in simony and patronage, that shouldn't be applied to the taxed proceeds of honest graft!!!

[MrBen]

The truth is that or a whole 4 years between 2009-2011 there were good opportunities to buy a house at lower prices and with way less competition. Lots of those complaining now about prices had the money/mortgage op then but didn't buy because (a)they were scared and (b) because nobody else was. Now that all is apparently ok again, its been like watching a pack of sheep.

(Am referring to those trading up to a 3/4 bed house, not most first time buyers who were genuinely unable to buy then due to high LTV's and pre Help to Buy).

[Mick Mac]

What Mr Ben says is true but not many brave enough to say it.

[????]

On a larger scale it (the fact that people on the whole behave like sheep, In fact more like lemmings) largely explains the credit crunch

[MrBen]

Lots written in past four years about QE, long term swap rates and standard GDP measures. A lot less written about the raw human fear that actually drives market behaviour.

[LondonMix]

I don't really agree with Mr B. People in flats when prices dipped in London had the equity they built up in there homes erode. Simultaneously, the minimum deposit for any mortgage was 20%. I think people didn't buy in 2008 / 2009 because they couldn't afford to. If you were already on the property ladder, trading up when prices dip is everyone's dream but its rarely feasible.

[lane lover]

So MrBen, who was selling at the time for these people to trade up? Do tell.

Because of a lack of mortgages at the lower end, the market ground to a halt. Unless you had to sell, you didnt.

Those who did have their houses on the market were never going to offer a cheap price, as there were not many forced sellers due to the low interest rate environment.

So, its a great theory - but in reality its not exactly that simple.

[Loz]

lane lover Wrote:

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> So, its a great theory - but in reality its not exactly that simple.

I dunno - it's pretty much exactly what we did, except we did it in mid-2011. The price of the new house has gone up by about 30% since then. We couldn't afford it now.

[MrBen]

London Mix and Lane Lover - I stand by my post which, if you re-read it, takes into account the first time buyer market effectively collapsing. Only correction is should read "low" LTV's not high re mortgage accessibility.

LM - yes those holding flats had their equity effectively reduced but real prices for terraced houses (in terms of transactional actuals) fell also. So I didn't see the "real" gap widen. If you had a flat with say 75-100k equity, that covered up to a 20% deposit on a ?550-600k house. And in 2010/11, 85% and 90% LTV mortgages became freely available again.

Lane Lover - "So MrBen, who was selling at the time for these people to trade up? Do tell."

Well?.whilst supply was still below norms there were actually more houses on the market in SE22 in 2010 and 2011 than there are right now. They'd get two viewings in a week instead of 15 desperadoes and sealed bids. And sellers were open to offers as a result.

I rented a house on Fellbrigg road in 2009. Three doors down, a house requiring full renovation came on at ?450k. Except in April 2009 people were shitting their pants. But the family that bought that house in the teeth of the storm will have made a life changing decision in terms of their future equity.

Some might not like it, but 2010-12 was a clear buying opportunity for those who, like Loz, took some risk and effectively doubled up rather than take their chips off the table. And whilst its an uncomfortable truth, fear and uncertainty prevented the majority from doing that.

The current market is a mess. There is lots wrong with it that will bring ill winds in years to come. But my point was simply about fear holding back those who could have.

[El Pibe]

Well, we built in those teeth rather than bought, building costs were rock bottom, but the house won't be worth what we paid for it for a few years yet (of course it's worth that, just in terms of resale value obviosuly) but it'll work out in the long run.

[LondonMix]

You're kidding right Mr. Ben. In 2009 -- I wouldn't count any time after that as relevant as the market in London was already recovering-- a 2 bed flat in ED had falled to less than 300k. 250k was pretty typical if you look at sold prices on Rightmove. http://www.rightmove.co.uk/house-prices/detail.html?country=england&locationIdentifier=OUTCODE%5E2323&searchLocation=SE22&propertyType=2&year=5&referrer=listChangeCriteria&index=975

What flat owner in ED do you think had 100k of equity to put down on a 3 bed house in that situation? There were a few who perhaps had owned their flats for a very long time, but it certainly wouldn't have been typical or common place. Most people would have loved to trade up but it wasn't as simple as finding the will. You should also rememeber that for years most first time buyers we acquiring their properties with 10% and 5% mortgages so the didn't have a lot of equity to start with....

[85volga]

Well it appears as the good folk of the ED forum are all for Squatters rights if you take into account the positive comments within the threads regarding the current squats of the ED police station and the conservative club. so with that in mind feel free to take over any abandoned / unoccupied shop in Ed , perhaps threshers might be a good start great location .......why buy when you can just .....occupy ?

[Twirly]

Even those of us who did have plenty of equity still had to find additional funds to trade up. I started looking at possibilities 3.5 years ago, and even with plenty of equity, all we could get in ED was one extra room and a handkerchief sized garden. To get more, we had to leave the area. Considering that I bought the flat on one salary, and was then looking to upgrade on two salaries plus equity, that was disappointing.

[MrBen]

LondonMix Wrote:

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> You're kidding right Mr. Ben. In 2009 -- I

> wouldn't count any time after that as relevant as

> the market in London was already recovering--

But it is relevant because houses were more affordable in 2010 and 2011 than they are now. They were still high and unaffordable to a great many. But relatively they were 20-30% lower in real (actual) values versus the daft prices today.

Granted you could probably split 2009 apart from 2010-2012 in' any retrospective analysis because of a number of good reasons. But I'm afraid you're wrong if you think the years quoted didn't pose an opportunity for many who had equity, were on the ladder but chose to batten down the hatches and sit tight.

[LondonMix]

In 2009 many people simply couldn't buy and it had nothing to do with cowardice. Your idea that in 2009 most people in flats were flush with home equity and afriad to buy 3 bed houses doesn't really stack up.

After that, the argument no longer holds water as people were buying and prices started rise as a result from 2010 onwards. It's totally illogical to say that those that didn't buy then were afraid. Afraid of what in a growing market? However, a desire to buy isn't the only thing that dictates when people make the move. Some will only be ready to buy this year other in a few years from now and its down to personal circumstances.

[Alex K]

An anecdote -- late 2007, house prices plummeting, and gloom / despair all about. We pondered. "The only way out for our government is to debase the currency and to break all pension promises," we decided. So we took everything we had and bought -- a rental property.

Currency debasement and pension-plan gutting are moving forward. We guessed right. But will that rental property hold its value, be the pension that we otherwise won't collect? We'll see if in the rental property we have our arms around a life-preserver or a millstone.

But yes, Mr Ben. It takes gumption to buy against a market. However, we weren't motivated to buy by gumption, but instead by panic.

[MrBen]

You're bending my words a little there LM.

Saying " most people in flats were flush with home equity " would indeed be wrong. Nor did I call anyone who didn't buy then but simply couldn't afford to a coward.

But saying there were still a *decent number* who had just enough equity to do something with and wanted to trade up but didn't is true. I doubt anyone in that position would want to look back and admit it now though because that's human nature. Much easier to blame the government, euro crisis, job security etc than your own fear.

[Hood83]

East Dulwich IS full of rich people, rich people who I think would rather not acknowledge that. Happy to be corrected but I think a household income of ?100,000 would put you in the top 5% and ?150,000 in the top 1%. That, in my book, is rich. Maybe not super-rich, but rich. I reckon there are a very decent number of people in ED earning that, but again, happy to be proven wrong.

Of course I live on the DKH estate so all this is said from a position of smug, inverted snobbery ;-)

[KidKruger]

Those sort of earnings is not a reasonable definition of 'rich'.

If someone is broke or poor that doesn't automatically qualify everyone else as rich.

Just the same if you're stupid doesn't make everyone else clever.

[Hood83]

It is unearned income, IHT in principle is a perfectly decent thing, but it highlights the sad truth that people are big supporters of social mobility and equality of opportunity...except when it comes to their own kids. We do need a better way of taxing the worst rent seekers though, and those are not those with one house being passed down to their kids I'd agree.