Time to feel bearish again?

[A_P]

20 hours ago, reformed nice guy said:

I live in a very small hamlet and I am seeing this play out already.

People that retired into the town paid high prices. Some are looking to move and the houses are not selling. One bought for £275k in 2008 sold for 300k recently... asking price was originally 525k and it took 3 years to sell!

I guess the next question is though are the houses that are not selling in the need of a major overhaul/update/reno? In my opinion very few young professionals want to move in a house that needs a complete update, they would rather move into a new build.

I've come to conclusion after studying my area in the SE and now East Belfast there is pent up demand for decent housing. Anything that needs a lot of work will sit on the market. A house that has had work done or in pretty good nick will sell within a few weeks.

Here is one for you. an abandoned pub in with high foot and car traffic going by all day every day. Front blinds are closed all day. I laughed when someone bought it off the flippers, I laughed even more when I saw the for sale sign go up. I puked up a little when it resold

[NogintheNog]

On 13/06/2019 at 09:33, Fully Detached said:

On 13/06/2019 at 09:33, Fully Detached said:

So if you use the god-awful monthly affordability measure I'd be an utter idiot not to buy.

So right now I'm swinging between seeing a lot of sense in buying and recoiling at the thought of getting utterly butt-fucked for a house that would have been 60k in 2003.

I know the feeling;

Quote

So right now I'm swinging between seeing a lot of sense in buying Gold at £1070 GBP/Oz  and recoiling at the thought of getting utterly butt-fucked for Gold that would have been 220 GBP/Oz in 2003.

The point I'm making here is I suppose what has been devalued? It's clearly the value of GBP that has been eroded v the house price or Gold price. You just have to ask yourself whether the Bank of England will protect the future value of sterling v those assets. What does your affordability look like if the central bank puts rates up to 5%?

[macca]

1 hour ago, A_P said:

Here is one for you. an abandoned pub in with high foot and car traffic going by all day every day. Front blinds are closed all day. I laughed when someone bought it off the flippers, I laughed even more when I saw the for sale sign go up. I puked up a little when it resold

Where I live in sw London they are no longer knocking down the pubs, they are turning them into HMO’s 

They stay open as pubs but they convert any other spare capacity into a “hotel”

Then charge the council to fill it full of emergency housing persons.. 

They are proper rough old slums and massively profitable I bet.. 

Its all part of the government’s slumification plans.. 

[Fully Detached]

26 minutes ago, NogintheNog said:

I know the feeling;

The point I'm making here is I suppose what has been devalued? It's clearly the value of GBP that has been eroded v the house price or Gold price. You just have to ask yourself whether the Bank of England will protect the future value of sterling v those assets. What does your affordability look like if the central bank puts rates up to 5%?

Yes exactly - my expectation is that they will continue to devalue GBP, and for this reason I see my cash savings, even those that are index linked, as risky. The decision in 2008 to bail out the banks and keep house prices high has basically crystallised them at ridiculous levels - if the banks couldn't afford price discovery in 2008, then no way in hell can they let it happen now, so I see devaluing cash as the route the BoE will take right up until the point it all goes spectacularly bust.

With a small mortgage I'd be able to withstand much higher rates than the majority of borrowers. I feel uncomfortable at the thought of trading my financial freedom for supposed security which carries a level of risk, but I can pretty much mitigate that risk to the extent where I would be a gold plated borrower compared to Mr and Mrs Average.