The sound of silence .....

In message , Andrew MacPherson writes

The same thing happens during every boom. This was my third and, in various ways, people get excited and think they are going to make a fortune out of property. "Unseasoned investors" jump on the bandwagon and borrow the money to buy. Then they find the market changes, many fall by the wayside, and some go on to become "seasoned investors".

The difference with this boom was that it was a bit easier to borrow the money, with the transparent marketing of "Buy To Let" mortgages. The process is the same as it has always been, it has just been easier to see it happening.

So is can be said that you chose the timing of your retirement rather well, having milked the boom for all it was worth, and then taken a "stuff this for a lark" view when faced with the prospect of struggling with the bust.

Sure, but if you do that you learn that you should have stuck the money in shares...

Well done. It's nice to hear of parents trying to inculate monetary sanity. My parents made me do jobs around the house to earn pocket money. There's something about having to work for money that makes even kids more careful with it.

FoFP

But the problem with all these figures is that they only measure the prices of houses *currently* being bought & sold, or put up for sale. As such they skew towards high turnover areas.

As an example, some relatives used to live on a newish estate where there was a lot of BTL speculation, and a lot of people buying "starter" homes. Most people seemed to move after a few years, and it seemed every other house had a for sale sign. Most people on the road I live on have been here 10+ years, some much longer. Maybe 1 house in 20 has a for sale sign.

So if 10 out of 50 houses on the new estate are sold each year and selling prices went up 10%, but only 2 out of 50 on my road are sold and the prices went up 5%, what is average house price inflation?

Also potential sellers are less likely to put their houses up for sale if they know that prices have gone down in their area, and more likely if they've gone up. So using actual sales or asking prices to measure house price inflation won't necessarily give a meaningful result.

*Eventually* Crowley etc will be right, no matter how long it takes :)

Much the same here. If they needed extra money, there was a lucky dip jar containing folded pieces of paper with jobs marked on them. IIR cleaning the downstairs windows was worth a fiver.

In later years, I rashly promised them to match every pound they saved. Bad move. It's amazing how much money teenagers can amass when there's a hot convertible Astra they've set their hearts on.

Question on BBC FOUR's excellent 'Mindgames' last night.

A man goes into a bank and withdraws GBP100. In so doing, he doubles his bank balance. How much was in it in the first place?

100 overdrawn is the obvious answer - but guess there's a catch?

Maybe 200 overdrawn - with an overdraft limit of 250 - resulting in 100 of bank charges making the balance 400 o/d.

But thats always been the case, (some areas with higher turnover, reluctant sales if price drop and also differences between areas), so you are still measuring like for like if you compare one year with another. Obviously an average across the whole country only gives you that, it doesnt tell you if there are marked regional or even local differences. You can always focus in using the land registry if you want to measure a specific area.

No, because during rising prices, turnover will be much greater in the speculative/starter home/BTL areas than it would be during falling prices. In areas with more long term residents, the difference in turnover wouldn't be so great. Additionally price volatilty in speculative areas would be greater.

So in a rising market, the land registry, mortgage company stats etc would be heavily biased towards speculative areas, which would probably see the biggest rises. In a falling market, they would be much less biased towards speculative areas, which would probably see the biggest falls.

Another possible answer is £100 in credit. You have to read the missing words too. [A man goes into a bank and withdraws £100 from his coat pocket in order to deposit the sum into his account. In so doing ...]

Another answer is NIL. You have to take the strict sense of "in the

*first* place" as referring to when the account was opened, not to the moment immediately prior to the withdrawal.

In message , Andy Pandy writes

That's it. Go up one in the class. The brunette is spoken for.

I would agree.

It was early 1998 when I did my first BTL review for a client, and there were only about 6 lenders prepared to do BTL mortgages, IIRC. Also, LTVs were ~ 60% to 70% and no (or very few) self-cert lenders.

Spot on!!

The alternative was to survive until the middle/end of the next boom, which is likely another 7-10 years. It wasnt a difficult decision

"JF" wrote

If that's the answer they wanted - it's not a very tasking "mindgame", is it?!!

Price increase be buggered!.... they want a 30k reduction!!..and although they say they are willing to compromise...they add that the compromise will only be slight (estate agency believes this will be circa 5k). Theres the evidence if any were needed of house prices falling in North Lincolnshire...thats the second house I have had an offer for sale in 2 years and the other had to be sold for 15k less than the asking price (which incidentally was not set by the vendor but a reputable estate agency, as indeed was the price of the present house I am selling).

This isn't heresay... this is my personal experience and is a FACT.

30k & 15k reduction on your *asking* prices is not necessarily the same as a fall in actual house prices, and thats a FACT. And it might surprise you, but 'reputable' estate agencies sometimes use high suggested asking prices in order to get a vendor to go with them instead of someone else. And thats a FACT as well.

Of course, it may be that prices are falling in Norh Lincolnshire, since the Nationwide numbers are a national average. Believe it or not, a rise (esp a small one) across the entire country *on average* doesnt imply prices are rising everywhere, so I've no idea why you think you can extrapolate from two sales, probably at too high prices to start with, in just one location, to whats happening over the entire country.

"Tumbleweed" wrote in message news: snipped-for-privacy@individual.net...

What was an issue was a locally well known agency with a well featured easy to use website and proactive mailshots. Also the other issue was the instruction to price to sell within

6 months, which meant the price being lower than maybe it should have been for the area. In the village where the house is located there are 25 other houses for sale, so there is a glut in supply. Looking round the town where I live the same excess of supply seems to exist, and I hear from my aunt who lives in Warwickshire that the position is very similar there. Looking at each and every one of the houses in this village in terms of price and features this house is priced appropriately and if anything gives slightly better value for money than most of the others. If one looks at the Nationwide quarterly bulletin issued in september (and not the monthly bulletins) there is map detailing price falls which does indeed show price falls in the locality for a distance from approximately goole in the west through to grimsby in the east, and about caistor to the south up to the humber in the north, The nationwides price trends methodology uses lending data, so although asking prices and selling prices are different I suppose it is only so in a bear market, since in a bull market buyers exceed sellers and asking prices are easier to achieve, and indeed if more than one buyer is interested in the property it becomes more like an auction. In the present bear market asking prices have fallen because as another contributor has said estate agencies prefer continuous business and the only way they can achieve that is by driving prices to meet the market affordability rather than the vendors unrealistic expectations.

Needless to say we have rejected the derisory offer.

Possibly an unwarranted assumption, in a rising market I think people tend to ask more than the house is 'worth' in the hope that they will get more but not necessarily in the expectation they will get the whole asking price. If I offered my house for sale *in any market* and it sold the very next day for the full asking price, I might suspect it was priced too low, rather than I was clever to achieve my asking price.

No reason why that wont happen in a falling market either, it depends what price you start from. Offer it for 25k and see what happens!

Its only 'derisory' ( a very loaded word) if thats significantly below what its worth*. If the house eventually sells for that price, its realistic. It may also be just an opening bargaining offer. It may be someone who routinely offers much lower on the off chance they will eventually come across someone desperate to sell below the true value because of time pressure. It may be all they can afford. You can't afford to get emotional about these things.