I've noticed a definite change to the attitudes of some of my relatives lately.

Firstly, earlier in the year when I would explain to my mother the HPC economics I discuss on here it would generally be met with a kind of patronising middle class: "Yes dear, aren't these current prices a scandal, I don't know how you young people could afford to manage" (and such-like). Most home-owning relatives would have the same response... a kind of condescending sympathy, which genrally looked completely insincere as they didn't believe for a moment that their new-found riches could ever evaporate. However, now that prices have been falling for a while, and the media and general public opinion is now pretty negative, their attitudes have changed, and they're actually becoming quite hostile to anyone who points out the inevitable. They seem to treat you (and anyone else who's bearish about the market, deliberately renting, STR, etc) as if they're to blame, and your conspiring to steal their "wealth".

Had another incident of this earlier this week. My brother-in-law was quite hostile with us. He'd been pretty bullish about the market and believed prices would keep rising forever. In the last few months they decided to move... had bought their flat for about £80k a few years ago, now valued at about £130-140(-ish), and they want a bigger place. So they are keeping the flat to rent out, and borrowing against the £50k of equity in it use as the deposit to buy a £250k house. Their employment circumstances have also changed (since agreeing the mortgage) and currently they have to live on a single shop-assistant's (I think) wage, probably not much more than £10k a year I'd guess. So now they find themselves effectively having a 25x income multiplier on their main residence, and now have a BTL property with ALL the equity withdrawn from it at the top of the market. (rather them than me!) And then they have the nerve to phone us and accuse us of being "lazy, irresponsible freeloaders" for renting cheaply, while saving a fortune and not over-exposing ourselves, while the responsible members of society like them all do their bit and pile their borrowed money into the market. I'm sure it's mainly the financial pressure that they must now be under that's causing the hostility. I'm sure we're going to see much more of this kind of thing in the months and years to come.

Is this for real? Blimey, I've heard some incredibly obtuse statements drop from people's jaws during the boom, but that... really?

I know what you mean though. Has anyone noticed the people who could be in a spot of hot water with the places they've bought probing you, as if they want you to say something controversial that they can be upset about? I mean, we've never thrown the HPC into the faces of recent buyers, but we've certainly shut up about buying ourselves for over a year now.

'Why aren't you buying?'
'Are you still looking?'
'They say it's a good time to buy before they go up in the spring?'
'Hey, I've found you this house down the road from us....'
'We are thinking of moving as we have equity? What do you think?'
'You should get on the ladder?'

... all said pensively...

Too much of this and you feel like flipping out:

'CRASH!! THEY ARE GONNA CRASH BIG, GODDAMMITT! EVERYTHING!! YOU ARE DOOMED!!! WE ARE ALL DOOMED!!! DO YOU KNOW BRUNO????'

As smug and as self-satisfied people who bought years ago are i find most of them ok to me as an FTB.......Mostly they're just so relieved they're not ftbs now..rather than exhibiting schadenfreude.

I've noticed the same hostility, in fact i try and refrain from talking about housing to them because of this hostility.
One relative tried to put me down recently by saying to me ' What right have you got to talk about houses you don't even own one'

I get around this as follows, for examples when answering in front of my relative who bought a five bed detached for £125k four years ago (now worth £280).
I simply say that I am looking for a house like his " I seem to remember that you paid £125K, with inflation I should now be looking at about £140k. I am interested if the right house should come on the market at this price.

What can They say????

Ask them how their DVD player works, I'm sure they own one of them too!

I've had exactly the same thing. "What do you think you can possibly know about property/mortgages, when you've never even owned one!?"

Had something similar from someone I know who's just MEW'd. Rather predictably the main items on the shopping list are a Plasma Telly and an Audi TT. Not sure what it is about these two specific items, is it a requirement that you are contractually bound by your lender to MEW to buy them? People ALWAYS seem to buy Audi TT's.

... then when you point out that "of course their repayments on their Audi look relatively cheap, that's what happens when you repay a car OVER TWENTY-FIVE YEARS and protect the bank by securing it against your house"... they simply come back with something like: "these Audi TT's barely seem to lose their value over the years"....

Not everyone who owns a TT has had to borrow for it I may add

My reply to the relative was that 'I was interested in Economics, and that housing was a very interesting part of economics at the moment' this seemed to stump them and shut them up ( probably due to their lack on knowledge of economic). I followed up with saying that we were 'coming out of the denial stage of the bubble and entering the wake up/panic phase' I also stated that this was all part of the psycology of a bubble and had all happened before to anticipate any 'new paradigm' response.

I find a reference to the 'when folks start talking about new paradigms, its time to get out of the market or wish you had got out earlier' usually counters a new paradigm arguement, as economics rarely changes

Shoot the messenger.








Or is it more lazy and freeloading to live OFF property rather than IN IT and expect money-for-nothing? Isn't that the definition of freeloading?




LOL!!!!!!!!!!!! COAB, you SHOULD say this!



Others on this thread have already pointed out how stupid this comment is.

Well most of them have been making long time plans to spend their new found wealth. Their dreams look like they may be shattered now.
There is only one guaranteed way to become wealthy, work, save, and stop trying to keep up with the Jones`s.

Charlie is right. There's a zillion-dollar industry informing us round the clock how great it is to take on extra debts, or compress our megadebts into handy bite-sized chunks, so more spending can take place.

On the other hand, the live-to-the-max-within-your-means movement* has a tiny budget by comparison.

If you are without debt or are focussed on reducing those you have, the feeling of clearning debt is actually a brilliant one. Far better than the feeling of buying the latest five-minute wonder.

Also, when you start living within your means, you realise how easy it is to creat luxury out of nothing. Learn to cook a curry properly and fill the freezer with enough curry sauces for weeks. get into independent travel and have more interesting holidays than you imagine. Buy quality secondhand goods with cash whil your friends pay full-price and carge to their Mastercard. Start seeling your skills informally for extra cash. Focus on 'How can I solve the problem', rather than 'What products do I need to buy at full price to solve the problem'.

After a while it all becomes a sport and an artform. In a word, fun!


* I'm promoting the term 'frugalista' for this movement. People who have rebelled against waseful consumer society and re-adopted views and lifestyles that used to be the common sense norm

If you're as tight as me you could recycle xmas presents from last year. But the laws of probability state that at some point you'll get them back

A person who lives by credit during their lifetime never calculates the loss in value of their hard earned money. What is the true value of every pound they earn after allowing for tax and interest payments, probably around 25 pence.
It always amuses me when I am told by someone I only owe 100k on my mortgage. When I correct and inform them they probably owe 200k, you get very strange looks.
Talking to a guy a few weeks ago who has just borrowed 17k to buy a boat repayable over 10 years. He said it was a bargain at 17k, no I informed him, £316 per month including protection insurance is £37,920 that is the real cost of your bargain.

Try a little experiment, I have done it myself on numerous occassions.
The next time you get the urge to buy that super duper new electronic gizmo, start saving for it. I guarantee when you have saved the money you will no longer want it, and it will probably be obsolete by then.
People buy on impulse and if they don`t have the cash, that very nice person gives them the magic plastic, or says sign here and take it with you.

Like it COAB I saw the light 20 years ago.

I agree with Charlie & COAB, It is true we don't need all the consumer goods people keep telling us we need, and to purchase them on credit, so they end up costing a third more, and we are still paying for long after the have been put away in a cupboard and no longer used. Its true we purchase too much on impulse and if we were to save for it we would no longer want it. On the question of Buy to Let for income and growth, wouldn't be better to over pay on existing mortgage by cutting back on unnecessary purchases, repaying mortgage early and having an extra income from a mortgage you nolonger have to pay. No troublesome tennants to worry about, property maintainance, capital gains tax, or worry that prices will fall.

Totally agree Charlie.I believe it is called "delayed gratification".Or"How to irritate the Jones'".

What a great thread.

Even the Jones will have to keep up with somebody else. Take a step back and let them get on with it.

Did that as well. "How can you afford to retire five years early" they enquired, well it would have been ten years I replied, sadly I had an ar****le for a partner, off to work are we, have a nice day, what a beautiful summers day.

Did you get taken to the cleaners by an ex Charlie?

You must be Sherlock Holmes, a****le is not a term associated with indearment.

No, I was refering to my business partner, he wanted to work till he dropped, lot younger than me, finally forced to come to a financial agreement. Had to go when I did to save 20k CGT, Gordon Brown stopped the concession the following tax year.

I actually had a small victory over the xmas break. I finally managed to convince my dad that house prices were crazy and I shouldn't buy!!!!

I only saw sense myself in the early part of last year when I came close to buying a house but then it fell though as we were gazumped. It was then I realised how crazy things were because we were about to pay just under the £250K stamp duty threshhold (actually just over squeezing out every drop of cash we could give them for fixtures and fittings) for a tiny house (albeit in a nice area) which I thought was an insane amount of money to be coughing up anyway but the other buyer offered an extra £5K (despite the fact this meant they would have to hand over an extra £5K in stamp duty (as it then was) to the government). Suddenly I saw the light!

Anyway that is just background the point is that my father was giving me hassle over christmas about was I still looking etc. Whereupon my step mum pipes up with the old its always better to buy than rent argument. I live in commuter area just outside london and the yield on the house I rent judging from others that have sold is about 4.3%. I explained this and about interest payments simply being renting money in the usual way and then, suddenly, my father got it! I almost died...

My step mother however just said, "thats all well and good but everyone knows you should always buy rather than rent". Still, she isn't the brightest spark...

Keep plugging away boys and girls the message is getting through (at leaast to some people...)

How is it possible that people believe this ********? If renting cost 5p a month and buying cost £1million, which is the better option?




What "everyone knows" is usually wrong.

Had a very strange family moment a few months ago and this christmas.

For the last few years the parents where commenting on me not buying.. wasn't the right time for me, and at the time I though prices were too high then! (locally prices are well above average) Never had heated discussions, but after awhile we all avoided the subject.

Then a few months ago, talking to the parents, the subject of house prices came up, first time since (by them). Can't remember the exact words.. I was in shock.. but along the lines of "what do you think of the falling house prices, perhaps you are right to wait".

At christmas.. the subject comes up again, and I quitely explain my position in more detail (no debts, lots of cash in the bank.. backed up with real figures.. no messing! and that the place I'm in interest only would cost more than my rent) the parents said "I'm glad we have paid off the mortgage.. we wouldn't be able to buy anything now".. I left it at that.

Also around the same time, another family member said "have you heard about these people selling to rent" (with what I thought was some distain), soon after followed by "I hope interest rates fall"... didn't reply.. just walked away.

Conclusion..

1) I seem to walk away a lot for good reason, I know what my position is, and I know I can rant and rave.. which doesn't convince people.. what does is taking things slowly and backing up with facts.

2) Some people are starting to see whats coming round (mainly I feel having lived through the last one), some don't see that far ahead (possibly due to not remembering/experiencing) it.