Can regular HPC posters put together a list of common myths for the Uk property market and pin it on HPC, along with the situation in reality.
I'm getting more flack than usual from anxious homeowners I speak to, defending their ignorant positions. I would like to refer them to an educating list to save my breath.
It was also be interesting to hear which Myths people find most common. I come across 'There is a shortage of houses, so prices will not go down much, if at all' a lot, and recieve flack when trying to diferentiate it from 'there is a shortage of affordable property'
ADDED NOTE:
Webmaster has kindly pinned this topic at my request, so we can identify the main property myths along with a considered attempt at the translation of the myth in reality (I think truth is too strong a term in hindsight) .
Please try and stay on topic as I think this subject is important, given the smoke and mirrors used by the vested interests to hide what is really going on in the property market.
If they have time, I'd be grateful if a veteran HPC poster or two would agree to edit the myths as i don't feel my knowledge in the property area compares with theirs - PM me if wish - cheers
Edit by Mods: Discussion about what a "myth" is has been moved to this separate thread.
Full Version: Can We Compile A List Of Uk Property Myths ?
QUOTE
There is a shortage of houses
********. If there were a shortage of houses you would be tripping over homeless people in the street every 2 seconds. There is a shortage of AFFORDABLE property.
QUOTE
Low interest rates make higher house prices more affordable
Wrong. They lower your initial monthly repayment, but the debt is not eroded and your Total Lifetime Cost of housing(LCH) is exponentially higher.
QUOTE(zzg113 @ Nov 20 2004, 12:40 PM)
********. If there were a shortage of houses you would be tripping over homeless people in the street every 2 seconds. There is a shortage of AFFORDABLE property.
Wrong. They lower your initial monthly repayment, but the debt is not eroded and your Total Lifetime Cost of housing(LCH) is exponentially higher.
Wrong. They lower your initial monthly repayment, but the debt is not eroded and your Total Lifetime Cost of housing(LCH) is exponentially higher.
Exactly , thats why I use it as an example of a common myth.
Myth: Shortage of land will mean house prices will keep on rising.
Truth: If so, why are rents struggling to keep even and in most cases rents are falling? If there was a shortage of land then rents would be rising at the same ridiculous rate as house prices.
Myth: Mass immigration to the UK means greater demand for housing.
Truth: In the last 10 years more people have LEFT the UK than the number entering the UK each year. The indigenous UK population is falling re the low birth rate and 30-something men who do not want to go near the 30-something women of this land so, in the future, less people in this country.
Edit by Mods: The discussion about the above myth has been moved to this separate thread.
Myth: Housing will be my pension.
Truth: Yes, it is a good idea to have a mixed portfolio but everyone now sees housing as their pension which means, in 20 or so years, a flood of properties will come onto the market driving down prices.
The biggie - about low IRs - has aleady been mentioned.
Truth: If so, why are rents struggling to keep even and in most cases rents are falling? If there was a shortage of land then rents would be rising at the same ridiculous rate as house prices.
Myth: Mass immigration to the UK means greater demand for housing.
Truth: In the last 10 years more people have LEFT the UK than the number entering the UK each year. The indigenous UK population is falling re the low birth rate and 30-something men who do not want to go near the 30-something women of this land so, in the future, less people in this country.
Edit by Mods: The discussion about the above myth has been moved to this separate thread.
Myth: Housing will be my pension.
Truth: Yes, it is a good idea to have a mixed portfolio but everyone now sees housing as their pension which means, in 20 or so years, a flood of properties will come onto the market driving down prices.
The biggie - about low IRs - has aleady been mentioned.
A list of these media babble myths which are bandied about as facts would be good and a link to them from the HPC homepage...
MEDIA-BABBLE ABOUT THE BUBBLE:
MYTH:
(1) "Aren't we just becoming like the rest of Europe? Over there EVERYONE rents - its the norm, and people just do not care about owning and are not as unhealthy obssessed as the Brits. "
In Europe, most households are owner-occupiers.
Only in Germany its was/is the norm to rent. The real costs of renting for all the population is paid for out of general taxation/deficit spending, in a 'bizzareo' series of social contracts which last many decades to encorage housebuilding from the post war reconstruction. This is ending, and, as a consequence, houseprices are falling as landlords will make less profits - without the subsidy the housing stock value is falling.
FACT:
(2) "Look - 90% of people rented at the start of the century, and it was normal not to ever own your home. I believe things are coming full circle and the same factors that made more people rent in 1910 then are here now. People best make way for the the new landed gentry."
Although it was the norm to rent, even then the cost of a house was not out of line with the wage multiple of 3-4 times earnings. However, people found they had to cover themselves and thier family for unemployment, illness etc... out of savings, had little job securitys, and they did not have access to finance. As these conditions changed, the ownership rate climbed within a few decades. By the time of the war, most households owned.
Now we do have a large reversal of these factors. A large part of the workforce, is basically forced into declaring themselves as being in 'self-employment' with little job security and no benifits - dispite the same taxes - having to cover themselves through savings against unemployment etc... with little pension and no ability to claim a living level of unemployment benifits.
However, this alone does not justify the houseprices.
MYTH:
(3) "UK Debt is a trillion pounds, that is being racked up on credit cards"
Most of the debt, 85% of it according to the BOE, has been lent to the BTL market. They do not see a significant rise in current consumption. Lending against assets is viewed as alright.
MEDIA-BABBLE ABOUT THE BUBBLE:
MYTH:
(1) "Aren't we just becoming like the rest of Europe? Over there EVERYONE rents - its the norm, and people just do not care about owning and are not as unhealthy obssessed as the Brits. "
In Europe, most households are owner-occupiers.
Only in Germany its was/is the norm to rent. The real costs of renting for all the population is paid for out of general taxation/deficit spending, in a 'bizzareo' series of social contracts which last many decades to encorage housebuilding from the post war reconstruction. This is ending, and, as a consequence, houseprices are falling as landlords will make less profits - without the subsidy the housing stock value is falling.
FACT:
(2) "Look - 90% of people rented at the start of the century, and it was normal not to ever own your home. I believe things are coming full circle and the same factors that made more people rent in 1910 then are here now. People best make way for the the new landed gentry."
Although it was the norm to rent, even then the cost of a house was not out of line with the wage multiple of 3-4 times earnings. However, people found they had to cover themselves and thier family for unemployment, illness etc... out of savings, had little job securitys, and they did not have access to finance. As these conditions changed, the ownership rate climbed within a few decades. By the time of the war, most households owned.
Now we do have a large reversal of these factors. A large part of the workforce, is basically forced into declaring themselves as being in 'self-employment' with little job security and no benifits - dispite the same taxes - having to cover themselves through savings against unemployment etc... with little pension and no ability to claim a living level of unemployment benifits.
However, this alone does not justify the houseprices.
MYTH:
(3) "UK Debt is a trillion pounds, that is being racked up on credit cards"
Most of the debt, 85% of it according to the BOE, has been lent to the BTL market. They do not see a significant rise in current consumption. Lending against assets is viewed as alright.
QUOTE
Most of the debt, 85% of it according to the BOE, has been lent to the BTL market
Brainclamp, get your facts right. 85% is MORTGAGE debt, not specifically BTL DEBT.
As far as I can see most of the accepted wisdom (still) handed down by my parents generation is due 1970's economics.
If you did your house buying from 1965 to 1985 then the idea that "You can't loose on property", etc makes perfact sense. Of course you can't when inflation is between 10 and 20%. Especially if interest rates are lower than inflation as they were prior to 1979.
What they can't see is that low inflation renders the previous wisdom dagerously obsolete.
If you did your house buying from 1965 to 1985 then the idea that "You can't loose on property", etc makes perfact sense. Of course you can't when inflation is between 10 and 20%. Especially if interest rates are lower than inflation as they were prior to 1979.
What they can't see is that low inflation renders the previous wisdom dagerously obsolete.
I've attempted to summarise the myths so far, any more for any more or improving comments on those listed ? 
MYTH 1 -- You Can't Lose on Property
from Captain Manaring:
As far as I can see most of the accepted wisdom (still) handed down by my parents generation is due 1970's economics.
TRUTH -- If you did your house buying from 1965 to 1985 then the idea that "You can't loose on property", etc makes perfact sense. Of course you can't when inflation is between 10 and 20%. Especially if interest rates are lower than inflation as they were prior to 1979.
What they can't see is that low inflation renders the previous wisdom dagerously obsolete.
--------------
MYTH 2 -- 'There is a shortage of houses, so house prices will not fall much, If at all.
TRUTH --There is a shortage of AFFORDABLE property-- If there were a shortage of houses you would be tripping over homeless people in the street every 2 seconds.
From ZZG 113
---------------
MYTH 3 -- Myth: Shortage of land will mean house prices will keep on rising.
From: Masked Tulip
TRUTH: If so, why are rents struggling to keep even and in most cases rents are falling? If there was a shortage of land then rents would be rising at the same ridiculous rate as house prices.
----------------
MYTH 4 -- Mass immigration to the UK means greater demand for housing.
Truth: In the last 10 years more people have LEFT the UK than the number entering the UK each year. The indigenous UK population is falling re the low birth rate and 30-something men who do not want to go near the 30-something women of this land so, in the future, less people in this country.
From: Masked Tulip
------------------
MYTH 5 -- Housing will be my pension.
Truth: Yes, it is a good idea to have a mixed portfolio but everyone now sees housing as their pension which means, in 20 or so years, a flood of properties will come onto the market driving down prices.
From: Masked Tulip
------------------
MYTH 6 -- MEDIA-BABBLE ABOUT THE BUBBLE:
MYTH 6A:
(1) "Aren't we just becoming like the rest of Europe? Over there EVERYONE rents - its the norm, and people just do not care about owning and are not as unhealthy obssessed as the Brits. "
In Europe, most households are owner-occupiers.
Only in Germany its was/is the norm to rent. The real costs of renting for all the population is paid for out of general taxation/deficit spending, in a 'bizzareo' series of social contracts which last many decades to encorage housebuilding from the post war reconstruction. This is ending, and, as a consequence, houseprices are falling as landlords will make less profits - without the subsidy the housing stock value is falling.
FACT:
(2) "Look - 90% of people rented at the start of the century, and it was normal not to ever own your home. I believe things are coming full circle and the same factors that made more people rent in 1910 then are here now. People best make way for the the new landed gentry."
Although it was the norm to rent, even then the cost of a house was not out of line with the wage multiple of 3-4 times earnings. However, people found they had to cover themselves and thier family for unemployment, illness etc... out of savings, had little job securitys, and they did not have access to finance. As these conditions changed, the ownership rate climbed within a few decades. By the time of the war, most households owned.
Now we do have a large reversal of these factors. A large part of the workforce, is basically forced into declaring themselves as being in 'self-employment' with little job security and no benifits - dispite the same taxes - having to cover themselves through savings against unemployment etc... with little pension and no ability to claim a living level of unemployment benifits.
However, this alone does not justify the houseprices.
MYTH 6B:
(3) "UK Debt is a trillion pounds, that is being racked up on credit cards"
Most of the debt, 85% of it according to the BOE, has been lent to the BTL market. They do not see a significant rise in current consumption. Lending against assets is viewed as alright.
From BrainClamp
zzg113 Disagres with above - Brainclamp, get your facts right. 85% is MORTGAGE debt, not specifically BTL DEBT.
-----------------------
MYTH 7 -- BIG DISAGREEMENTS ON THIS MYTH -- Needs Clarification, I will move on as I don't want to get bogged down/ distracted with one myth.
Myth: Mass immigration to the UK means greater demand for housing.
Truth: In the last 10 years more people have LEFT the UK than the number entering the UK each year. The indigenous UK population is falling re the low birth rate and 30-something men who do not want to go near the 30-something women of this land so, in the future, less people in this country.
From: The Masked Tulip
Disagreement From Brain Clamp : There are more workers in this country than ever before. We have the highest immigration in history - ever.
We have the highest immigration of any country in the world.
The native population birth rate is falling, but the non-native birth rate is set to rocket, which will represent 85% of all new britons.
From ZZG113 - http://www.aviddetention.org.uk/migrationw...t-wing%20agenda - MIGRATION WATCH UK
Plenty more discussion on the post on this subject
COMMENTS ON MYTHS Pt 1. -- I think you'll find a myth is a traditional belief, commonly accepted ie house prices can only go up. This site is a minority view, therefore the myths will be found on whichever website from which you migrated.
From -Surveyor
2. I thought this whole site (hpc) was dedicated to property myths.
MYTH 8 -- Mortgage Lenders & Estate Agents tell the truth in their reports on property & prices
TRUTH -- They are vested interests who benefit from 'talking up' a property market & rising prices, so often distort the facts or do not tell the truth
From : SFASC
MYTH 9 -- Low interest rates make higher house prices more affordable
TRUTH - They lower your initial monthly repayment, but the debt is not eroded and your Total Lifetime Cost of housing(LCH) is exponentially higher.
From zzg113
MYTH 1 -- You Can't Lose on Property
from Captain Manaring:
As far as I can see most of the accepted wisdom (still) handed down by my parents generation is due 1970's economics.
TRUTH -- If you did your house buying from 1965 to 1985 then the idea that "You can't loose on property", etc makes perfact sense. Of course you can't when inflation is between 10 and 20%. Especially if interest rates are lower than inflation as they were prior to 1979.
What they can't see is that low inflation renders the previous wisdom dagerously obsolete.
--------------
MYTH 2 -- 'There is a shortage of houses, so house prices will not fall much, If at all.
TRUTH --There is a shortage of AFFORDABLE property-- If there were a shortage of houses you would be tripping over homeless people in the street every 2 seconds.
From ZZG 113
---------------
MYTH 3 -- Myth: Shortage of land will mean house prices will keep on rising.
From: Masked Tulip
TRUTH: If so, why are rents struggling to keep even and in most cases rents are falling? If there was a shortage of land then rents would be rising at the same ridiculous rate as house prices.
----------------
MYTH 4 -- Mass immigration to the UK means greater demand for housing.
Truth: In the last 10 years more people have LEFT the UK than the number entering the UK each year. The indigenous UK population is falling re the low birth rate and 30-something men who do not want to go near the 30-something women of this land so, in the future, less people in this country.
From: Masked Tulip
------------------
MYTH 5 -- Housing will be my pension.
Truth: Yes, it is a good idea to have a mixed portfolio but everyone now sees housing as their pension which means, in 20 or so years, a flood of properties will come onto the market driving down prices.
From: Masked Tulip
------------------
MYTH 6 -- MEDIA-BABBLE ABOUT THE BUBBLE:
MYTH 6A:
(1) "Aren't we just becoming like the rest of Europe? Over there EVERYONE rents - its the norm, and people just do not care about owning and are not as unhealthy obssessed as the Brits. "
In Europe, most households are owner-occupiers.
Only in Germany its was/is the norm to rent. The real costs of renting for all the population is paid for out of general taxation/deficit spending, in a 'bizzareo' series of social contracts which last many decades to encorage housebuilding from the post war reconstruction. This is ending, and, as a consequence, houseprices are falling as landlords will make less profits - without the subsidy the housing stock value is falling.
FACT:
(2) "Look - 90% of people rented at the start of the century, and it was normal not to ever own your home. I believe things are coming full circle and the same factors that made more people rent in 1910 then are here now. People best make way for the the new landed gentry."
Although it was the norm to rent, even then the cost of a house was not out of line with the wage multiple of 3-4 times earnings. However, people found they had to cover themselves and thier family for unemployment, illness etc... out of savings, had little job securitys, and they did not have access to finance. As these conditions changed, the ownership rate climbed within a few decades. By the time of the war, most households owned.
Now we do have a large reversal of these factors. A large part of the workforce, is basically forced into declaring themselves as being in 'self-employment' with little job security and no benifits - dispite the same taxes - having to cover themselves through savings against unemployment etc... with little pension and no ability to claim a living level of unemployment benifits.
However, this alone does not justify the houseprices.
MYTH 6B:
(3) "UK Debt is a trillion pounds, that is being racked up on credit cards"
Most of the debt, 85% of it according to the BOE, has been lent to the BTL market. They do not see a significant rise in current consumption. Lending against assets is viewed as alright.
From BrainClamp
zzg113 Disagres with above - Brainclamp, get your facts right. 85% is MORTGAGE debt, not specifically BTL DEBT.
-----------------------
MYTH 7 -- BIG DISAGREEMENTS ON THIS MYTH -- Needs Clarification, I will move on as I don't want to get bogged down/ distracted with one myth.
Myth: Mass immigration to the UK means greater demand for housing.
Truth: In the last 10 years more people have LEFT the UK than the number entering the UK each year. The indigenous UK population is falling re the low birth rate and 30-something men who do not want to go near the 30-something women of this land so, in the future, less people in this country.
From: The Masked Tulip
Disagreement From Brain Clamp : There are more workers in this country than ever before. We have the highest immigration in history - ever.
We have the highest immigration of any country in the world.
The native population birth rate is falling, but the non-native birth rate is set to rocket, which will represent 85% of all new britons.
From ZZG113 - http://www.aviddetention.org.uk/migrationw...t-wing%20agenda - MIGRATION WATCH UK
Plenty more discussion on the post on this subject
COMMENTS ON MYTHS Pt 1. -- I think you'll find a myth is a traditional belief, commonly accepted ie house prices can only go up. This site is a minority view, therefore the myths will be found on whichever website from which you migrated.
From -Surveyor
2. I thought this whole site (hpc) was dedicated to property myths.
MYTH 8 -- Mortgage Lenders & Estate Agents tell the truth in their reports on property & prices
TRUTH -- They are vested interests who benefit from 'talking up' a property market & rising prices, so often distort the facts or do not tell the truth
From : SFASC
MYTH 9 -- Low interest rates make higher house prices more affordable
TRUTH - They lower your initial monthly repayment, but the debt is not eroded and your Total Lifetime Cost of housing(LCH) is exponentially higher.
From zzg113
Myth: Rent is dead money so you are better off buying
Truth: Mortgage interest is also dead money. At present you pay about the same in mortgage interest and rent for a given property. So what really matters is the capital appreciation/depreciation. For instance:
2 bed exec apart in Derby £165k to buy or £700pcm to rent
Buy: at 5% mortgage, interest alone = £666 pcm
So it costs you about the same in dead money to buy and to rent. Now take a SMALL fall in prices, a conservative estimate of 4% for the year, and you've lost £6400 by buying. Or £500 odd a month.
Truth: Mortgage interest is also dead money. At present you pay about the same in mortgage interest and rent for a given property. So what really matters is the capital appreciation/depreciation. For instance:
2 bed exec apart in Derby £165k to buy or £700pcm to rent
Buy: at 5% mortgage, interest alone = £666 pcm
So it costs you about the same in dead money to buy and to rent. Now take a SMALL fall in prices, a conservative estimate of 4% for the year, and you've lost £6400 by buying. Or £500 odd a month.
I suspect that the majority of people buying over the last few years have no experience of having savings and seeing it earn interest. Take graduates these days - they are generally in debt through little fault of their own.
Myth: Lenders are going to continue giving the high income multiples as the mortgage
Ans: I feel that they will not. Once they start feeling that there is going to be negative equity, they will checken out. Some banks have already done that. Which means- house price falls are going to accelerate.
Ans: I feel that they will not. Once they start feeling that there is going to be negative equity, they will checken out. Some banks have already done that. Which means- house price falls are going to accelerate.
QUOTE(Doubtful @ Nov 22 2004, 07:47 PM)
Myth: Lenders are going to continue giving the high income multiples as the mortgage
Ans: I feel that they will not. Once they start feeling that there is going to be negative equity, they will checken out. Some banks have already done that. Which means- house price falls are going to accelerate.
Ans: I feel that they will not. Once they start feeling that there is going to be negative equity, they will checken out. Some banks have already done that. Which means- house price falls are going to accelerate.
That's for damn sure as mortgage approvals are now going to be scrutinised more closely than before. Say goodbye to the days of OTT lending.
I'm so sure, in fact, I've put my house on it!
When I tell my friends that I am saving for a house deposit they all look at me blank as if I've never heard of 100% mortgages (some friends have even managed to get this over 35 yrs!).
I reckon when it goes over 20% falls the banks will only consider 10% deposits and more.
Unless Barratt start kicking in the £99 move in and … oh sorry I think they already have!
I reckon when it goes over 20% falls the banks will only consider 10% deposits and more.
Unless Barratt start kicking in the £99 move in and … oh sorry I think they already have!
QUOTE
100% mortgages
From hereon in to be known as "INEMs" or Instant Negative Equity Mortgages.
QUOTE
(some friends have even managed to get this over 35 yrs!).
I'm sure they think this is some kind of achievement, "Wahey, I've managed to mortgage MY ENTIRE WORKING LIFE AWAY. Go Me!"
Never mind the fact that those with a 10%+ deposit have the best rates on the market available to them, whereas high LTV borrowers get shafted with the SVR.
Webmaster has kindly pinned this topic at my request, so we can identify the main property myths along with a considered attempt at the translation of the myth in reality (I think truth is too strong a term in hindsight) .
Please try and stay on topic as I think this subject is important, given the smoke and mirrors used by the vested interests to hide what is really going on in the property market.
If they have time, I'd be grateful if a veteran HPC poster or two would agree to edit the myths as i don't feel my knowledge in the property area compares with theirs - PM me if wish - cheers
Please try and stay on topic as I think this subject is important, given the smoke and mirrors used by the vested interests to hide what is really going on in the property market.
If they have time, I'd be grateful if a veteran HPC poster or two would agree to edit the myths as i don't feel my knowledge in the property area compares with theirs - PM me if wish - cheers
A great myth about property is that it will fall in price.
Take property over the past 200 years and draw yourself a graph relating to price.
And voila what have you got?.
Take property over the past 200 years and draw yourself a graph relating to price.
And voila what have you got?.
This:
I have just proven that this is not a myth.
QUOTE
A great myth about property is that it will fall in price.
I have just proven that this is not a myth.
Nope you have just taken the timeline that served your purpose.
I think Japan has been around a hell of a long time before 1980 or did those figures suit your point.
If I was to take the period from 1945 to present day then the picture would prove my point. Look at an investment over a lifetime not just the short term.
Your investment may go down as well as up but in the long term there is only one way to go hence the reason you would like to purchase a property yourself in the future. Because you know it will go back up.
I think Japan has been around a hell of a long time before 1980 or did those figures suit your point.
If I was to take the period from 1945 to present day then the picture would prove my point. Look at an investment over a lifetime not just the short term.
Your investment may go down as well as up but in the long term there is only one way to go hence the reason you would like to purchase a property yourself in the future. Because you know it will go back up.
QUOTE
Nope you have just taken the timeline that served your purpose.
As have you.
QUOTE
hence the reason you would like to purchase a property yourself in the future. Because you know it will go back up.
No I would buy it cos I want somewhere to live that i can call my own.
Laurejon, if an investment has gone up in the past, that does not mean it will go up in the future. So shut up.
Maybe we need a list of myths, both from a bear and a bull point of view.
However, the bulls seem very, very few on the ground these days.
However, the bulls seem very, very few on the ground these days.
I have read on this site this weekend that the average salary is £35K and dustmen get £25K. Must be true then!
BBB, How about giving us a list of property myths from a Bull view as the ones we 've got so far are mainly from bears.
QUOTE(Saving For a Space Ship @ Nov 29 2004, 09:27 PM)
BBB, How about giving us a list of property myths from a Bull view as the ones we 've got so far are mainly from bears.
ok then no probs, however i won't be getting into any long arguments/discussions over them, i don't mind clarifying anything, but refuse to be drawn into any marathons. these are my opinions and my views, you may see them differently to me, thats why i'm bullish and you're bearish. i'm sure i will have covered the basics (and indeed depths) of most myths.
BEAR MYTHS
1)population decreasing
2)planning permission is going to get easier.
3)the housing market acts the same as the stock market
4)Landlording is a non profitable mugs game
5) landlording/developing does not give back to the economy
6)paying £1000 pcm rent is a sound financial idea
7)high IR's and recession came after the crash in the early 90's ie the crash was caused by primarily through sentiment.
8)property is'nt a good long term investment in real terms.
9) you can gear a share in exactly the same way and with the same same risk element as a house
10) the bears on this site have no vested interests.
11) the market should be viewed and treat as a macro market.
12) interest only mortgages have no merits.
13) a three bed semi is my god given right.(at whatever age)
14) the crash will come this year (repeat per annum)
15)all bulls suffer from money illusion
16) theory is more important than practice
17) interest rates have no bearing on affordability.p/e is the only worthy measure
18) self certs are dead
19) a degree makes you some kind of super human being, and the answer to all your dreams and aspirations (even though someone else in the meantime could have used the time to learn something far more appropriate to getting on in life/with people) although you may think this has nothing to do with property you only have to look to see how many priced out grads there are on here to prove my point.
20) there are no bargains anywhere in todays market.ie everywhere is topped out and yielded down.
21) people will bypass a basic human need to 'nest' and house themselves when in a position to be able to do so.
22) i messed around a little in my younger years,(not saving/spending too much/drinking/not making sacrifices) but now i have the right to own a house......right now. i mean now.
and........ thats just off the top of my head.
Phew, nothing in BBB's post to stop this market crash, I thought he might have had something up his sleeve
Here's the biggest myth of them all
There will be no crash, just a soft landing
By that I presume they mean that these ridiculous prices will ease off just a touch so that STILL NO SOD can afford them. Interesting (and completely stupid) notion
There will be no crash, just a soft landing
By that I presume they mean that these ridiculous prices will ease off just a touch so that STILL NO SOD can afford them. Interesting (and completely stupid) notion
Sorry if this one has been posed already, haven't got time to read thru all of the previous:
Myth: A 20% fall will only wipe out last year's 20% rise.
Fact: A 20% fall wipes out a 25% rise (and 33% wipes out a 50% rise!)
Myth: A 20% fall will only wipe out last year's 20% rise.
Fact: A 20% fall wipes out a 25% rise (and 33% wipes out a 50% rise!)
If you have made money from property in the last 5 years then you are a "Property Expert".
QUOTE(muttley @ Dec 1 2004, 07:37 PM)
If you have made money from property in the last 5 years then you are a "Property Expert".
I thank you young muttley, makes one feel so humble to receive such a compliment.
QUOTE(Charlie The Tramp @ Dec 1 2004, 08:29 AM)
I thank you young muttley, makes one feel so humble to receive such a compliment.
Er..that's my nomination for "Property Myth" Charlie..
QUOTE(muttley @ Dec 1 2004, 09:40 PM)
Er..that's my nomination for "Property Myth" Charlie..
Sorry.
I had better add my "Property Myth" or two actually.
1. Your property is your pension.
2. Buy aged 25 sell aged 65, and spend your remaining days living at the Ritz.
Not sure if it is counted as a myth,
A 20% increase in price followed by a 20% drop in price, you do not reach the original value.
For example a 20% increase on a start price of 100K
100 + (0.2*100) = 120K
20% decrease on 120K
120 – (0.2*120) = 96K
A 20% increase in price followed by a 20% drop in price, you do not reach the original value.
For example a 20% increase on a start price of 100K
100 + (0.2*100) = 120K
20% decrease on 120K
120 – (0.2*120) = 96K
Myth - ]Britain is short of land
Reality - Britain has a land Surplus. [/B]
Contrary to popular belief, the UK has approximately only 7.1% of its land built on. The Urban plot of 4 million acres is only 6.6%. The UK actually has a surplus of land. Despite claims of concreting over the South East of England, only 7.1% is built on with the Home Counties being underpopulated. The North West of England is densest with 9.9% of the land built up.
SOME FACTS:
* The UK has 60 million acres of land in total. Approx 1 milions acres per million of population. Approx 1 acre per person.
* 70% of the land is owned by 1% of the population.
* Just 6,000 or so landowners -- mostly aristocrats, but also large institutions and the Crown -- own about 40 million acres, two thirds of the UK.
* Britain's top 20 landowning families have bought or inherited an area big enough to swallow up the entire counties of Kent, Essex and Bedfordshire, with more to spare.
* Big landowners measure their holdings by the square mile; the average Briton living in a privately owned property has to exist on 340 square yards.
* Each home pays £550/ann. on average in council tax while each landowning home receives £12,169/ann. in subsidies. The poor subsidising the super rich. In Ireland where land redistribution occurred, there is no council tax.
* A building plot, the land, now constitutes between half to two- thirds of the cost of a new house. In London land is off the scale.
* 60 million people live in 24 million "dwellings".
* These 24 million dwellings sit on approx 4.4 million acres (7.7% of the land).
* Of the 24 million dwellings, 11% owned by private landlords and 65% privately owned.
* 19 million privately owned homes, inc gardens, sit on 5.8% of the land.
* Average dwelling has 2.4 people in it.
* 77% of the population of 60 million (projected to be more in new census) live on only 5.8% of the land, about 3.5 million acres (total 60 million).
* Agriculture only accounts for 3% of the economy at most and holds 68% of the land.
* The overall agricultural subsidy is about £4.5 billion per year, up to £6
billion if BSE and Foot and Mouth is taken into account.
* Agriculture has a turnover is only £15 billion per annum, less than many companies.
* Agriculture is subsidsed to 40% if Foot and Mouth and BSE is taken into account.
* Applied to the acres agriculture absorbs, and about 16 million acres are uneconomic, which is near 27% of the total UK land mass.
* Average density of people on one residential acre is 12 to 13.
* If every village, town and city was twice the size, the total area taken up would be less than 15% of the land mass.
* 10.9 million homes carries a mortgage of some kind.
* Average value of an acre of development land is £404,000. High in south east of £704,154, low in north east of £226,624. London is in a category of its own.
* Reservations of land have been place by builders to a value of 37 billion to build the 3-4 million homes required. The land reserved is almost wholly owned by aristocrats; with none of it on the land registry. This land is coming out of subsidised rural estates, land held by off-shore trusts and companies and effectively untaxed.
* Tony Blair ejected 66 hereditary peers from the House of Lords, predominantly large landowners, owning the equivalent of 4.5 average sized counties.
Reality - Britain has a land Surplus. [/B]
Contrary to popular belief, the UK has approximately only 7.1% of its land built on. The Urban plot of 4 million acres is only 6.6%. The UK actually has a surplus of land. Despite claims of concreting over the South East of England, only 7.1% is built on with the Home Counties being underpopulated. The North West of England is densest with 9.9% of the land built up.
SOME FACTS:
* The UK has 60 million acres of land in total. Approx 1 milions acres per million of population. Approx 1 acre per person.
* 70% of the land is owned by 1% of the population.
* Just 6,000 or so landowners -- mostly aristocrats, but also large institutions and the Crown -- own about 40 million acres, two thirds of the UK.
* Britain's top 20 landowning families have bought or inherited an area big enough to swallow up the entire counties of Kent, Essex and Bedfordshire, with more to spare.
* Big landowners measure their holdings by the square mile; the average Briton living in a privately owned property has to exist on 340 square yards.
* Each home pays £550/ann. on average in council tax while each landowning home receives £12,169/ann. in subsidies. The poor subsidising the super rich. In Ireland where land redistribution occurred, there is no council tax.
* A building plot, the land, now constitutes between half to two- thirds of the cost of a new house. In London land is off the scale.
* 60 million people live in 24 million "dwellings".
* These 24 million dwellings sit on approx 4.4 million acres (7.7% of the land).
* Of the 24 million dwellings, 11% owned by private landlords and 65% privately owned.
* 19 million privately owned homes, inc gardens, sit on 5.8% of the land.
* Average dwelling has 2.4 people in it.
* 77% of the population of 60 million (projected to be more in new census) live on only 5.8% of the land, about 3.5 million acres (total 60 million).
* Agriculture only accounts for 3% of the economy at most and holds 68% of the land.
* The overall agricultural subsidy is about £4.5 billion per year, up to £6
billion if BSE and Foot and Mouth is taken into account.
* Agriculture has a turnover is only £15 billion per annum, less than many companies.
* Agriculture is subsidsed to 40% if Foot and Mouth and BSE is taken into account.
* Applied to the acres agriculture absorbs, and about 16 million acres are uneconomic, which is near 27% of the total UK land mass.
* Average density of people on one residential acre is 12 to 13.
* If every village, town and city was twice the size, the total area taken up would be less than 15% of the land mass.
* 10.9 million homes carries a mortgage of some kind.
* Average value of an acre of development land is £404,000. High in south east of £704,154, low in north east of £226,624. London is in a category of its own.
* Reservations of land have been place by builders to a value of 37 billion to build the 3-4 million homes required. The land reserved is almost wholly owned by aristocrats; with none of it on the land registry. This land is coming out of subsidised rural estates, land held by off-shore trusts and companies and effectively untaxed.
* Tony Blair ejected 66 hereditary peers from the House of Lords, predominantly large landowners, owning the equivalent of 4.5 average sized counties.
QUOTE
the Home Counties being underpopulated.
This does not square with my day-to-day experience. I would say the Home Counties are very overpopulated.
QUOTE(zzg113 @ Dec 3 2004, 12:37 PM)
This does not square with my day-to-day experience. I would say the Home Counties are very overpopulated.
Sitting on the M25 you may get that impression. Figures state otherwise.
Bad planning and poor transportation can give the impression of a place being too dense.
Actually now I've got one, in reply to another comment on another thread:
http://www.housepricecrash.co.uk/forum/ind...?showtopic=3437
I'd just like to wade in with a response to that. In the past, UK landlords paid commercial rates which helped to keep rents high & discourage landlording (for want of a better word) along with the nasty laws that were in place.
After the 1996 Housing Act guaranteeing possession will be returned to the landlord for new tenancies, the BTL loan was born & was priced a little higher than the average OO loan.
Since then BTL has proven itself as quality lending, with default rates much lower than OO defaults (owing to the credibility and financial stature of us landords).
BTL rates are now MORE COMPETETIVE than OO loans, especially for FTB's who due to their small deposits and lack of a long term history, still pay 2% & even more over the base rate.
My loans are base + .74% and if it weren't for the redemption penalty for the next 2 years, I'd head out and refinance at what is now on offer, base + .64%.
If any FTB's can get a long term low variable rate like that, I'd love to hear about it. But please, no 1 year 3% followed by 24 years 6.99% thanks.
The feeling that landlords pay a higher rate due to a higher risk is therefore a property myth and I shall now add this to the property myths thread.
http://www.housepricecrash.co.uk/forum/ind...?showtopic=3437
QUOTE(lucky @ Dec 5 2004, 06:51 AM)
Dear Laurejon,
A correction to your idea that you don't need to tell the lender that it is being let out. Oh, yes you do, if you bought as an intended owner-occupier. It costs more to btl, as the risks to the lender are higher.
A correction to your idea that you don't need to tell the lender that it is being let out. Oh, yes you do, if you bought as an intended owner-occupier. It costs more to btl, as the risks to the lender are higher.
I'd just like to wade in with a response to that. In the past, UK landlords paid commercial rates which helped to keep rents high & discourage landlording (for want of a better word) along with the nasty laws that were in place.
After the 1996 Housing Act guaranteeing possession will be returned to the landlord for new tenancies, the BTL loan was born & was priced a little higher than the average OO loan.
Since then BTL has proven itself as quality lending, with default rates much lower than OO defaults (owing to the credibility and financial stature
of us landords).BTL rates are now MORE COMPETETIVE than OO loans, especially for FTB's who due to their small deposits and lack of a long term history, still pay 2% & even more over the base rate.
My loans are base + .74% and if it weren't for the redemption penalty for the next 2 years, I'd head out and refinance at what is now on offer, base + .64%.
If any FTB's can get a long term low variable rate like that, I'd love to hear about it. But please, no 1 year 3% followed by 24 years 6.99% thanks.
The feeling that landlords pay a higher rate due to a higher risk is therefore a property myth and I shall now add this to the property myths thread.
TTRTR
I accept what you're saying, but wouldn't it depend partly on the LTV % and/or track record of the BTL borrower?
What LTV are you borrowing to get those deals?
What deal do you think you could get as a "first-time BTLer" as opposed to a well-established BTLer?
Btw, saw your posts on the Somers Board re Derivex. Agree it's probably a scam, but if it isn't I might join you in this BTL lark!
I accept what you're saying, but wouldn't it depend partly on the LTV % and/or track record of the BTL borrower?
What LTV are you borrowing to get those deals?
What deal do you think you could get as a "first-time BTLer" as opposed to a well-established BTLer?
Btw, saw your posts on the Somers Board re Derivex. Agree it's probably a scam, but if it isn't I might join you in this BTL lark!
QUOTE(laurejon @ Nov 29 2004, 03:19 AM)
Nope you have just taken the timeline that served your purpose.
Don't think anyone is saying that the long term trend is not upwards. However only a BBB would buy now as the short-term to mid-term trend is going to be down. Whats the point of saying yeah but houses always go up (maybe) but may as well wait 3 years and save £25,000 - £30,000 on every £100,000 (x 25 years interest!!!) Who cares about the long term trend!
Interest rate related myths:
1. If house prices start to fall, the BOE will start to drop interest rates.
2. If interest rates start to drop, house prices will 'go through the roof' once again.
3. Even if interest rates are unchanged, if house prices drop, there will be plenty of savvy FTBs around to buy at the lower prices, thus forcing prices back up to the max.
1. If house prices start to fall, the BOE will start to drop interest rates.
2. If interest rates start to drop, house prices will 'go through the roof' once again.
3. Even if interest rates are unchanged, if house prices drop, there will be plenty of savvy FTBs around to buy at the lower prices, thus forcing prices back up to the max.
QUOTE(wriggly @ Dec 14 2004, 10:26 AM)
Interest rate related myths:
1. If house prices start to fall, the BOE will start to drop interest rates.
2. If interest rates start to drop, house prices will 'go through the roof' once again.
3. Even if interest rates are unchanged, if house prices drop, there will be plenty of savvy FTBs around to buy at the lower prices, thus forcing prices back up to the max.
1. If house prices start to fall, the BOE will start to drop interest rates.
2. If interest rates start to drop, house prices will 'go through the roof' once again.
3. Even if interest rates are unchanged, if house prices drop, there will be plenty of savvy FTBs around to buy at the lower prices, thus forcing prices back up to the max.
you've nicely summarised dogbox's entire argument which he likes to trot out repeatedly.
Another Myth
There is no such thing as a Savvy FTB.
FTB'ers are the reason the prices rose in the first instance.
Take them out of the equation as is the case today and you have market stability.
Yet another Myth
A boom is always followed by a spectacular bust this is clearly not the case. Other factors have yet to come into play.
There is no such thing as a Savvy FTB.
FTB'ers are the reason the prices rose in the first instance.
Take them out of the equation as is the case today and you have market stability.
Yet another Myth
A boom is always followed by a spectacular bust this is clearly not the case. Other factors have yet to come into play.
QUOTE(Yonmon @ Dec 10 2004, 10:58 AM)
TTRTR
I accept what you're saying, but wouldn't it depend partly on the LTV % and/or track record of the BTL borrower?
What LTV are you borrowing to get those deals?
What deal do you think you could get as a "first-time BTLer" as opposed to a well-established BTLer?
Btw, saw your posts on the Somers Board re Derivex. Agree it's probably a scam, but if it isn't I might join you in this BTL lark!
I accept what you're saying, but wouldn't it depend partly on the LTV % and/or track record of the BTL borrower?
What LTV are you borrowing to get those deals?
What deal do you think you could get as a "first-time BTLer" as opposed to a well-established BTLer?
Btw, saw your posts on the Somers Board re Derivex. Agree it's probably a scam, but if it isn't I might join you in this BTL lark!
75% LTV for the rate quoted.
Here's another myth:
"I'm a good 'Good Tenant'."
There is no such thing as a good tenant. Joining the two words is a contradiction of terms. If they were good, they'd be a home owner & not a tenants.
Sorry people, it's one that I heard a while back & I think it's true.
So because someone is a tenant, automatically makes them a bad person IYO TTRTR. What a lovely piece of work you are.
QUOTE(zzg113 @ Dec 15 2004, 04:42 PM)
So because someone is a tenant, automatically makes them a bad person IYO TTRTR. What a lovely piece of work you are.
Now isn't that twisting it a little?
I'd just prefer to hear the two seperately, for example:
I'm a tenant.
I'm good.
Not twisting at all. The clear logic of what you posted above, is that you are asserting:
"All tenants are bad"
Which is exactly what Nicholas von Hoogstraten used to say, except he used the word scum instead of bad. You must be so proud to be a mini-me of old Nick...
"All tenants are bad"
Which is exactly what Nicholas von Hoogstraten used to say, except he used the word scum instead of bad. You must be so proud to be a mini-me of old Nick...
Edit by Mods: Discussion about what a "myth" is has been moved to a separate thread.
"Other factors like Low Unemployment and low interest rates will prevent a crash"
Does anyone know the REAL (unfiddled, unspun, unhidden) Unemployment figures? How many of the employed are in high flying jobs and how many are debt-laden graduates in run-of-the-mill McJobs?
Now the market has stalled and is starting to fall do it will continue to do so regardless of interest rates. Can low interest rates offset the fear of Negative Equity? Not a chance. Can low interest rates allow you to have a 5,6,7x mortgage? Not in a falling market. So interest rates will make no difference once the slide is in progress.
Besides the BoE have bigger concerns than the housing market. The adjustment of interest rates is usually in response to the inflation figures, which, as we all know conveniently ignores housing.
Does anyone know the REAL (unfiddled, unspun, unhidden) Unemployment figures? How many of the employed are in high flying jobs and how many are debt-laden graduates in run-of-the-mill McJobs?
Now the market has stalled and is starting to fall do it will continue to do so regardless of interest rates. Can low interest rates offset the fear of Negative Equity? Not a chance. Can low interest rates allow you to have a 5,6,7x mortgage? Not in a falling market. So interest rates will make no difference once the slide is in progress.
Besides the BoE have bigger concerns than the housing market. The adjustment of interest rates is usually in response to the inflation figures, which, as we all know conveniently ignores housing.
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