Is ED about to experience another property boom?

[*Bob*]

Never mind. It's only money.

[EDOldie]

grabot Wrote:

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> EdOldie Wrote:

> --------------------------------------------------

> -----

> > Had a look at that chart and its very puzzling.

> First there?s a stealth phase, then the awareness

> phase followed by the mania phase and finally the

> blow off phase. What does it all mean?

>

> Imagine a thirsty and relatively individualistic

> herd. A few smell water and sneak off to have a

> drink. They let a few of their mates know and

> awareness grows. Eventually word spreads to the

> entire herd and they stampede towards the now

> diminishing water supply. In the adrenal fuelled

> panic any sign of water raises hopes

> disproportionately. Eventually, exhausted, the

> herd surrender.

Pure poetry, especially the blow off phase.

[Sherwick]

Louisa Wrote:

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> Cassius a nice Greggs sausage roll washed down

> with a bottle of Dom, does life get much better?

>

> Louisa.

I prefer the EDD sausage rolls.. ::o

[Sherwick]

MrBen Wrote:

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> Louisa Wrote:

> --------------------------------------------------

> -----

> > Sean, I cant wait to prove you all wrong and

> jump

> > on that plane to a nice safe sunny location,

> and

> > leave behind this damp dull overcrowded island

> for

> > somewhere where people actually have something

> > known as 'quality of life' ... watch this

> space!

> >

> > Louisa.

>

> I agree Louisa. And I dont actually think you are

> joking. If I have to live in London then East

> Dulwich is a great place to be. But lets be honest

> there are a million better places to live for

> quality of life. Amazing city but truthfully it's

> serving a purpose, a place to find a nice girl,

> make some money, have a bit of fun....and after

> I've had my fill why would I live here longer than

> I need to? I fell in love with Sydney when I lived

> there, an awesome place to raise a family and for

> general quality of life. South of France if you

> want lifestyle but an easy flying time home. And

> Scotland if you want to stay within the UK. The

> borders is a beautiful place. All I need is my

> macbook and a Blackberry.

>

> Edited due to hangover

South of France? I'd say that anywhere in France is pretty damn good!

[DavidMW]

Has anybody seen this new site? http://www.yourlocallondon.com/east-dulwich/

Local news etc - you can sell your house for free on there!

D

[louisiana]

1. Don't forget climate change is going to have fairly severe consequences for much of southern Europe. Some areas have already been in severe drought for quite a few years (e.g. having drinking water shipped in three times a week, disputes over massive infrastructure projects to get household water to people).

The UK will generally be better off than southern Europe climate-wise, regardless of what happens to the Gulf Stream.

2. Don't bank on being able to do work locally. Many of these areas already have severe unemployment, low wages (and even riots - look at what's been happening in Greece etc.). Most of southern Europe is an economic basket case.

If your source of earned income is the UK etc., but you are living elsewhere, you may well be much better off.

I can charge in the UK five or more times what I can charge across most of southern Europe. And the trading terms there are usually appalling e.g. people pay at 90-120-150 days or more there, but 10-45 days here. Plus often there is no small claims court system there; and few legitimate ways of enforcing commercial contracts. Trading conditions bad = everyone takes the piss. Licensing systems for doing anything (running your own business-wise) are fairly pre-historic, complex and expensive: e.g. in Spain the self-emp working from an office are supposed to pay tax based on the square metres of their desk area! Social security payments can be prohibitively expensive (more than three times UK levels).

This won't be changing aytime soon.

But if you are a UK pensioner, you will also be in deep doo-doo (owing to exchange rates, unless the Euro falls through the floor) as you can't claim any of the pensioner credits that UK residents can claim.

And if you need healthcare, likewise. (If you end up in hospital in southern Spain, for example, you will need to have your relatives visit each day with food. It can be a little third world.)

[grabot]

I think that people tend to idealise Australia a little too. I am sure that it is fun when you are young free and single and are happy to spend most of your income on a centrally located flat. But, the reality that I hear, from a number of Australian friends is: long working hours, 60 hours weeks are not atypical; unbearable heat in summer and expensive property, life in Sydney invariably seems to require a one hour bus commute from a souless suburb, if you want a reasonably sized house. You could of course move to somewhere like Perth, which is cheaper, but an Australian friend has just moved back from there after finding if utterly tedious.

My wish for this current economic crisis would be for people to learn to enjoy what they have instead of constantly seeking something else. I feel privileged to live in East Dulwich, and if prices come down and make that privilige available to others, that is a good thing in my book.

[Emily]

You lot do make me laugh!

It's all very Private Fraser (we're all DOOMED!) but of course you could be right.

All I know is the market appears to be quite perky unless you have your house on for a silly price.

[Jeremy]

Aha, the forum's favourite subject emerges again!!

I think prices will keep falling for a little while still. Lots of perfectly good properties have been on the market for yonks... plus the numbers still don't really stack up for any would-be investors.

[louisiana]

Yes, quite a few people think that there's still another 20% to fall from peak prices. Fine if you are living there, not fine for investors. And that, perhaps, is how things should be.

[Louisa]

The wonderful Mr Darling is now predicting a 3% fall in economic output by the end of the year, this is a VERY revised figure on the previous estimate. I personally think that things are very bad and the low interest rates are masking a hell of a lot of problems which can only get worse before they get better. Some people, rightly so in my opinion, have kept their house prices at beginning/middle of 08' prices in the vein hope they sell and of course they are happy to hold out. This obviously wont help things in the longer term.

Louisa.

[northlondoner]

Louisa re your impending departure for the Maldives...how long before you talk down that economy, too? Not a journalist by any chance?

[ibilly99]

Here's an informative article that says a qualified yes but it is a bear trap - sell now if you have to and can but certainly don't buy.

http://www.moneyweek.com/investments/property/stay-away-from-property-it-has-much-further-to-fall-14709.aspx

[louisiana]

Good article.

I agree with her: it's earnings multiples that are important. And right now multiples are still totally out of kilter. To cap it all, many are suffering not just bonus cuts etc. but also cuts in basic wages, short-time working etc.

Normally we'd expect wage inflation to smooth the path towards reasonable earnings multiples, but the opposite is happening now.

[MrBen]

Good article from one of my favourite columnists - she's why I buy the FT weekend where this originally appeared (in more detail). Tells it straight.

[Mick Mac]

I have read her before in the Sunday Times - I have tended to find her conservative, but have not read her enough to say if this is what's she is like generally. Is she ever anything other than risk averse?

[ibilly99]

The thread that never dies this says it all really ..

http://blogs.telegraph.co.uk/emma_hartley/blog/2009/05/04/housing_market_recovery_is_piffle_says_nonexpert

[sophiesofa]

Oh dear i'm in the process of buying a flat in ED (first time buyer). BUT it's a home not just a flat so if it goes down a bit i don't mind as long as it goes up again one day. I have just had enough of renting and throwing my money down the drain.

[indiepanda]

Renting isn't necessarily throwing money down the drain. I'm renting somewhere that is more modest than I would want to buy and as such the rent is probably about what I expect to end up paying in interest on my mortgage when I get back into the market as a buyer so I don't feel like I am wasting money. What I would spend on capital repayments goes in my savings account instead.

I know people have got into the housing market because they don't want to throw more money away on rent, but actually taken out a 100%+ mortgage near the top of the market and only paid the interest on it, so they don't own the place they live in anymore than I own this one. In fact, they have debt that started out exceeding the value of their property and now exceeds by a long margin.

I agree it's right to think of it as a home and not get too obsessed with ups and downs of the market, but to argue it's good to do to stop throwing money down the drain on rent is only valid if you are paying off the capital faster than the value is going down, which might be challenging in this market.

[skidmarks]

I agree with indie.

I am a home owner but have just started renting again. People would say it is a backwards step but I actually quite like it. I can move on when I want (unlike my house which if sold wouldn?t pay off the mortgage). The wiring in my flat blew last night, it took one call to the landlord and an electrician is coming around tonight to sort it at their expense ? lovely, no financial worries for me there. I just have to pay the rent. I only have contents insurance at under ?20 month unlike my house with all the life and building insurances adding up to a significant amount. My landlord is currently getting mugged by the freeholder of the flats for maintenance fees and alike ? sod that. Renting is not that bad, especially in current financial climate. At least if I get made redundant I can move on to place where the jobs are a bit more readily.

[sophiesofa]

I completely agree. Renting is most definitely a good option for lots of people and for some people it is not throwing money down the drain. I have only rented before and have lived in lots of cheap/crap flats in order to save for my deposit. I think 100%+ mortgages and even 95% mortgages are crazy and just asking for trouble. I am a sado and my ambition has always been to buy a flat and do it up which is what i've been saving up for years for, and I am not buying beyond what we (me and my boyfriend) can afford in mortgage payments.

I didn't mean to imply that renting is throwing down the drain for everyone.

[Jeremy]

skidmarks Wrote:

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> I agree with indie.

Me too - the idea that renting is "throwing money away" is not really accurate, given the amount of interest you pay on a mortgage. And you can be hit with expensive maintainence bills too. Renting can actually make financial sense (and obviously gives you much more flexibility in your lifestyle).

Saying that, I am a homeowner... but not for financial reasons.

[skidmarks]

Yes the interest you pay is ridiculous. I got our annual mortgage statement in January since we had the house we paid off around 2000 of capital but made around 18000 of mortgage payments. I think it works out for every 1 pound of capital you pay 3 pounds of interest over the term?. now with all the other fees taken into account, would it have been better to rent over the same period and save what you could?

What I have found is that I certainly have more disposal income since I started renting again?and the best thing is that I haven?t been down wickes to buy bricks for months!

[lalala]

I am thirty six and have been renting all my life! I would definitely recommend it and have always felt that i am better off than my friends who were struggling to make ends meet just to pay the interest on their places. If you're patient and cunning enough, you can find nice flats for a very reasonable rent. When I was in my twenties I did the flatshare thing which had bills included in the monthly rent. Over the years this has enabled me to save up money and I now have a very hefty deposit for a flat and I won't be applying for a very big mortgage. I think buying and renting each has their advantages.. there is no better way... luck can influence things and timing....

[????]

mmmm....but you rent for ever where as a mortgage is normally done in 25 years...so no more payments and you won an asset.

Also, calculations of rent vs mortgage are short term so tend to ignore:

1) increase in asset vale

2) inflation

Ask someone what the rent was on say a 2 bedroom house in East Dulwich in SE22 was 24 years ago and what interest payments where for someone who got a 100% mortgage on a 2 bedroom property 24 years ago...then compare what the latter is paying against the renter now!