"hamster" Hammond awaits housing crash
20 January 2007, 03:08 PM
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"hamster" Hammond awaits housing crash
Mirror.co.uk - News - Richard Hammond
IMO he may have sold his home at the perfect time (ie the absolute top of the bubble) and could stand to buy back a far better house for a lot less money in a couple of years, and it has to be said fair play to him - Hammer's a top bloke and hes clearly got his head screwed on as well!
Originally Posted by Richard Hammond
NO HOME IS AN IMPROVEMENT
20 January 2007
WE move house today and, for the fourth consecutive house move, I won't be there. I'm away working.
Which means that once again, Mindy will be filling the packing cases with dinner plates and photo albums, making a million cups of tea and deciding where our stuff is best dumped in the new place.
And I shall spend the day loafing about with my mates, occasionally breaking off to talk briefly to a TV camera.
On the day before the move, I shall rise from my armchair in our living room to go to work and I will return to the same armchair in a different living room to complain about where the telly is.
But the thing I'm most looking forward to? Not being a homeowner for a while.
Thanks to the vagaries of the housing market, we have sold but not bought, so we're living in a rented house until we do.
And I can't wait. I shall be freed from having to justify my decor, the wallpaper, the carpets and the colour of the ruddy bath.
It's a rented house, I didn't choose anything in it, and so I can't be judged by it.
We've become far too interested in expressing ourselves through our home and worrying what our curtains say about our politics.
The best a house or flat can do is keep out the rain. When someone visits your home for the first time, you can feel them casting a critical eye over your fixtures and fittings.
They are judging you as a person on the aesthetic qualities of your lampshades and the colour of the carpet in the bog.
When folk arrive, you hear them going "Ooh, I love those seagrass carpets, they're so natural. And the halogen downlighters really throw the texture into relief."
THEY go on and on as though they're standing back at a gallery and soaking up a major artwork.
I really want someone to pitch up at the front door and say "wow, this place is great. It's raining outside but look, my head's completely dry in here. What a great roof. And your stairs - they go up as well as down. Brilliant."
Perhaps rather than agonising over what shade of lilac is in this year for kitchens or whether to have contrasting throws on the sofas, we should worry about the price of houses. How can it be that buyers need to be high earners to stand a chance of owning a home?
The average wage in this country is 35 per cent behind what it costs to own the average house. So, to afford the average-priced house, buyers would need to earn 35 per cent more than the national average.
In an age when we've all supposedly got an avalanche of rights, you would think that the right to a bit of shelter and somewhere to cook your tea might be in there somewhere - apparently not.
If you go to France you'll find that most people don't worry about owning a home. They will happily rent apartments and houses all their life. But that's France and not here, where we seem to be orientated towards paying the mortgage and spending the weekends choosing wallpaper and painting skirting boards.
But how are first-time buyers supposed to get a foot on the ladder? And what happens if they can't? For most of us, when we sign for the mortgage on our first house, it is the first time we have to face the shambolic mess our finances are in after the exuberance of our youthful spending.
In other words, it's when we 'fess up to the bank that we're thousands in debt, have three credit cards - all full - a stereo on HP and spend too much on beer and takeaways.
Getting a mortgage is the first grown-up thing we do. We have to pay it each month or there's trouble, so we struggle and do it.
Without the steadying influence of the first mortgage to calm things down and curb our spending, what will happen?
If I'd stayed at home with my parents longer or rented any more bedsits, I would have spent every penny I had on records, fancy sound systems and old cars and would by now own a Ferrari and live in the shed.
Actually, I wish I had.
20 January 2007
WE move house today and, for the fourth consecutive house move, I won't be there. I'm away working.
Which means that once again, Mindy will be filling the packing cases with dinner plates and photo albums, making a million cups of tea and deciding where our stuff is best dumped in the new place.
And I shall spend the day loafing about with my mates, occasionally breaking off to talk briefly to a TV camera.
On the day before the move, I shall rise from my armchair in our living room to go to work and I will return to the same armchair in a different living room to complain about where the telly is.
But the thing I'm most looking forward to? Not being a homeowner for a while.
Thanks to the vagaries of the housing market, we have sold but not bought, so we're living in a rented house until we do.
And I can't wait. I shall be freed from having to justify my decor, the wallpaper, the carpets and the colour of the ruddy bath.
It's a rented house, I didn't choose anything in it, and so I can't be judged by it.
We've become far too interested in expressing ourselves through our home and worrying what our curtains say about our politics.
The best a house or flat can do is keep out the rain. When someone visits your home for the first time, you can feel them casting a critical eye over your fixtures and fittings.
They are judging you as a person on the aesthetic qualities of your lampshades and the colour of the carpet in the bog.
When folk arrive, you hear them going "Ooh, I love those seagrass carpets, they're so natural. And the halogen downlighters really throw the texture into relief."
THEY go on and on as though they're standing back at a gallery and soaking up a major artwork.
I really want someone to pitch up at the front door and say "wow, this place is great. It's raining outside but look, my head's completely dry in here. What a great roof. And your stairs - they go up as well as down. Brilliant."
Perhaps rather than agonising over what shade of lilac is in this year for kitchens or whether to have contrasting throws on the sofas, we should worry about the price of houses. How can it be that buyers need to be high earners to stand a chance of owning a home?
The average wage in this country is 35 per cent behind what it costs to own the average house. So, to afford the average-priced house, buyers would need to earn 35 per cent more than the national average.
In an age when we've all supposedly got an avalanche of rights, you would think that the right to a bit of shelter and somewhere to cook your tea might be in there somewhere - apparently not.
If you go to France you'll find that most people don't worry about owning a home. They will happily rent apartments and houses all their life. But that's France and not here, where we seem to be orientated towards paying the mortgage and spending the weekends choosing wallpaper and painting skirting boards.
But how are first-time buyers supposed to get a foot on the ladder? And what happens if they can't? For most of us, when we sign for the mortgage on our first house, it is the first time we have to face the shambolic mess our finances are in after the exuberance of our youthful spending.
In other words, it's when we 'fess up to the bank that we're thousands in debt, have three credit cards - all full - a stereo on HP and spend too much on beer and takeaways.
Getting a mortgage is the first grown-up thing we do. We have to pay it each month or there's trouble, so we struggle and do it.
Without the steadying influence of the first mortgage to calm things down and curb our spending, what will happen?
If I'd stayed at home with my parents longer or rented any more bedsits, I would have spent every penny I had on records, fancy sound systems and old cars and would by now own a Ferrari and live in the shed.
Actually, I wish I had.
20 January 2007, 03:54 PM
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20 January 2007, 04:41 PM
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Property prices never drop...
Hamster could end up on a council estate driving a mondeo with illuminated washer jets if he isnt careful...
Also, famed for his motoring journalism, property may not be his forte and is akin to reading a car review by Kirstie Allsop...
Hamster could end up on a council estate driving a mondeo with illuminated washer jets if he isnt careful... Also, famed for his motoring journalism, property may not be his forte and is akin to reading a car review by Kirstie Allsop...
20 January 2007, 08:06 PM
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"Thanks to the vagaries of the housing market, we have sold but not bought, so we're living in a rented house until we do"
Awesome! Let's watch whilst the market keeps rising at 15% a year & he cries a river of tears when his fantastic idea crumbles all around him.
TX.
Awesome! Let's watch whilst the market keeps rising at 15% a year & he cries a river of tears when his fantastic idea crumbles all around him.
TX.
20 January 2007, 08:50 PM
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20 January 2007, 08:50 PM
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WRONG!!!
I sat in a house For Sale as house prices were falling faster than people could drop them!!
Over a 20 year timescale they will always be worth more - but, the massive bubble that we are witnessing now cannot be maintained IMHO (oh, and in Hamsters opinion too - remember he spoke with God, what did God tell him? 'Sell your house my son and rent a while')?
I sat in a house For Sale as house prices were falling faster than people could drop them!!
Over a 20 year timescale they will always be worth more - but, the massive bubble that we are witnessing now cannot be maintained IMHO (oh, and in Hamsters opinion too - remember he spoke with God, what did God tell him? 'Sell your house my son and rent a while')?
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20 January 2007, 08:53 PM
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20 January 2007, 08:57 PM
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That's what I'm doing. I'm now wanting out of an appartment and into a house. All the houses I want (Style, size, area) are mostly out of reach for my income.
I'm going to wait for the crash. Yes my appartment will be worth less, but those properties (the ones I want) have seen the biggest rises, so they should take the biggest drops too.
If I'd been on my wage now, 5-7 years ago, those houses would have been affordable. A 4/5 bed house with double garage was ITRO £180-200k. At current rate they are over £500k.
A nice big crash within the next year or so, and I'll get me one of those 5 bed houses. Lovely.
I'm going to wait for the crash. Yes my appartment will be worth less, but those properties (the ones I want) have seen the biggest rises, so they should take the biggest drops too.
If I'd been on my wage now, 5-7 years ago, those houses would have been affordable. A 4/5 bed house with double garage was ITRO £180-200k. At current rate they are over £500k.
A nice big crash within the next year or so, and I'll get me one of those 5 bed houses. Lovely.
21 January 2007, 12:22 AM
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And if it doesn't crash you're f*cked!! If you can't afford it now then in a few years time ...
Plus all your money wasted on rent too!
TX.
Plus all your money wasted on rent too!
TX.
That's what I'm doing. I'm now wanting out of an appartment and into a house. All the houses I want (Style, size, area) are mostly out of reach for my income.
I'm going to wait for the crash. Yes my appartment will be worth less, but those properties (the ones I want) have seen the biggest rises, so they should take the biggest drops too.
If I'd been on my wage now, 5-7 years ago, those houses would have been affordable. A 4/5 bed house with double garage was ITRO £180-200k. At current rate they are over £500k.
A nice big crash within the next year or so, and I'll get me one of those 5 bed houses. Lovely.
I'm going to wait for the crash. Yes my appartment will be worth less, but those properties (the ones I want) have seen the biggest rises, so they should take the biggest drops too.
If I'd been on my wage now, 5-7 years ago, those houses would have been affordable. A 4/5 bed house with double garage was ITRO £180-200k. At current rate they are over £500k.
A nice big crash within the next year or so, and I'll get me one of those 5 bed houses. Lovely.
21 January 2007, 12:25 AM
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renting is dead money!
21 January 2007, 12:48 AM
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lol...brain damaged car journo gives advice on proerty market - prob about as usefull as the typical posts on here about the same issue (although the brain damage seems worse on here)
21 January 2007, 01:00 AM
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petem95 - If you keep saying house price crash - do you think it will make it happen? And if it does - it will be like a stopped clock - you be right one time!
21 January 2007, 01:18 AM
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To our typically British way of thinking it may be....
At the end of the day a roof is a roof whether you pay to own it one day or pay someone else just to live under it.
you are working your bollox off all your life so you can be put in a box and shoved in the ground and then the government takes a wedge and the kids (if you have any) get the rest..
Can't see the logic myself.
Andy
21 January 2007, 09:36 AM
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To our typically British way of thinking it may be....
At the end of the day a roof is a roof whether you pay to own it one day or pay someone else just to live under it.
you are working your bollox off all your life so you can be put in a box and shoved in the ground and then the government takes a wedge and the kids (if you have any) get the rest..
Can't see the logic myself.
Andy
At the end of the day a roof is a roof whether you pay to own it one day or pay someone else just to live under it.
you are working your bollox off all your life so you can be put in a box and shoved in the ground and then the government takes a wedge and the kids (if you have any) get the rest..
Can't see the logic myself.
Andy
After 25 years of paying a mortgage you can stop because you own your house. You can then spend the rest of your life living there without paying anything for the privilege. This means that the big family home you've bought to raise your kids in and that has been appreciating in value over the last 25 years can now be sold, some of it re-used to purchase a nice little bungalow in a nice place and the rest used to fund some of your retirement now that the kids have left home.
After 25 years of renting you have to carry on paying someone to live under their roof.
21 January 2007, 10:40 AM
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Paying say £200k at 6% for 25 years will cost you £185k in interest.
Sounds like enough to have bought somewhere smaller when the kids have gone.
So all in all if you rented and then downsized and rented again, you have spent no more than you would have if you bought a place to begin with.
Andy
21 January 2007, 10:46 AM
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But if you've been renting for 25 years, you've spent the same if not more, but you don't have the capital of the house at the end of it.
Put it another way, if you bought a car on HP and at the end of the loan period the garage took the car away, would you be happy?
Put it another way, if you bought a car on HP and at the end of the loan period the garage took the car away, would you be happy?
21 January 2007, 11:20 AM
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Well, the difference is simple:
After 25 years of paying a mortgage you can stop because you own your house. You can then spend the rest of your life living there without paying anything for the privilege. This means that the big family home you've bought to raise your kids in and that has been appreciating in value over the last 25 years can now be sold, some of it re-used to purchase a nice little bungalow in a nice place and the rest used to fund some of your retirement now that the kids have left home.
After 25 years of renting you have to carry on paying someone to live under their roof.
After 25 years of paying a mortgage you can stop because you own your house. You can then spend the rest of your life living there without paying anything for the privilege. This means that the big family home you've bought to raise your kids in and that has been appreciating in value over the last 25 years can now be sold, some of it re-used to purchase a nice little bungalow in a nice place and the rest used to fund some of your retirement now that the kids have left home.
After 25 years of renting you have to carry on paying someone to live under their roof.
Les
21 January 2007, 11:27 AM
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Well, the difference is simple:
After 25 years of paying a mortgage you can stop because you own your house. You can then spend the rest of your life living there without paying anything for the privilege. This means that the big family home you've bought to raise your kids in and that has been appreciating in value over the last 25 years can now be sold, some of it re-used to purchase a nice little bungalow in a nice place and the rest used to fund some of your retirement now that the kids have left home.
After 25 years of renting you have to carry on paying someone to live under their roof.
After 25 years of paying a mortgage you can stop because you own your house. You can then spend the rest of your life living there without paying anything for the privilege. This means that the big family home you've bought to raise your kids in and that has been appreciating in value over the last 25 years can now be sold, some of it re-used to purchase a nice little bungalow in a nice place and the rest used to fund some of your retirement now that the kids have left home.
After 25 years of renting you have to carry on paying someone to live under their roof.
21 January 2007, 11:32 AM
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21 January 2007, 11:33 AM
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Paying say £200k at 6% for 25 years will cost you £185k in interest.
Sounds like enough to have bought somewhere smaller when the kids have gone.
So all in all if you rented and then downsized and rented again, you have spent no more than you would have if you bought a place to begin with.
Andy
a) How much rent have you paid in the meantime (including rent rises?)
b) How much has your asset appreciated?
The appreciation in value of an owned house is likely to exceed the amount of interest paid (in the long term, I accept the fact that there will be times in the next 25 years that this will not be true for). Also, your rent is likely to increase at least in pace with inflation over the 25 year period.
You're saying that the interest saved will buy you a nice new pad when you come to retire. How many renters save that money? 0.0000001%?
Renting an appreciating asset dead money, buying an appreciating asset is an investment.
21 January 2007, 12:16 PM
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and if you are a family the issue is so much more compounded.....my dad bought his house for £13k 30 years ago - thats now worth £500k and when he goes (say 20 years) 50% will come to me - so thats £250k in todays terms....by then i may be 50 ish myself and my mortgage will be gone on a house worth £400k in todays terms.....so thats now the thick end of £1m in property - i will downsize to a cottage in the country and pass £500k out to my kids who will also be on the ladder by then.....and so it goes on.
The poeple who are stuffed are those renting with parents that do the same! Off the ladder and no inheritance to speak of, if 20 years time there will be plenty of people still wanting to buy - but those folks one be able. Meanwhile the population V space issue will always ensure theres demand (despite the "ohhhh, it cant last because i'm poor so everyone must be" attitude)
The poeple who are stuffed are those renting with parents that do the same! Off the ladder and no inheritance to speak of, if 20 years time there will be plenty of people still wanting to buy - but those folks one be able. Meanwhile the population V space issue will always ensure theres demand (despite the "ohhhh, it cant last because i'm poor so everyone must be" attitude)
21 January 2007, 12:17 PM
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Over the long term I suspect I will own for much longer than I rent, expecting at most up to just a few percent per year of real capital growth once inflation is accounted for. Apart from being a student, so far I have owned for 8 years and rented for 6 months. In that time I saw a spectacular growth in an asset that I've now liquidated. I don't believe that it can continue indefinitely, and what is probably exciting Petem95 is that the sentiment appears to be at last changing, as well the official inflation data and interest rates. Along with a seasonally adjusted 1% drop in house prices in December and very heavy debt levels, he might be talking a lot of sense. If he and others predicted it too early we could suggest that is just means that the bubble has more speculative froth to explode.
At present I am renting an asset like many others that is at about 2.5% rental yield. Add inflation and costs to this and he'd need to make about 10% growth in the coming year to break even. The downside risk is IMHO a lot higher. Have I got my sums wrong, or will I continue to believe that in the present environment that the people that spout that "Rent is dead money" have bothered to do the sums?
At present I am renting an asset like many others that is at about 2.5% rental yield. Add inflation and costs to this and he'd need to make about 10% growth in the coming year to break even. The downside risk is IMHO a lot higher. Have I got my sums wrong, or will I continue to believe that in the present environment that the people that spout that "Rent is dead money" have bothered to do the sums?
21 January 2007, 12:44 PM
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Snug, will your father's estate be paying inheritance tax?
Should we include in the very impressive growth over 30 years that it depends very much on the period you take it over and is of course subject to inflation (depending on period that £13k would have turned into £130-145K?) Doesn't the valuation only matter when it is liquidated?
For example, if you bought at previous peaks it could have taken you about 12 years to be able to sell at the same value again after inflation. I feel in these time frames that inflation must be considered.
Should we include in the very impressive growth over 30 years that it depends very much on the period you take it over and is of course subject to inflation (depending on period that £13k would have turned into £130-145K?) Doesn't the valuation only matter when it is liquidated?
For example, if you bought at previous peaks it could have taken you about 12 years to be able to sell at the same value again after inflation. I feel in these time frames that inflation must be considered.
21 January 2007, 12:55 PM
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So in 25 years time you'll have £185k in the Bank will you? Pull the other one ...
Plus in 25 years time £185k won't even buy a hot hatch let alone a house!!
TX.
Paying say £200k at 6% for 25 years will cost you £185k in interest.
Sounds like enough to have bought somewhere smaller when the kids have gone.
So all in all if you rented and then downsized and rented again, you have spent no more than you would have if you bought a place to begin with.
Andy
Plus in 25 years time £185k won't even buy a hot hatch let alone a house!!
TX.
Paying say £200k at 6% for 25 years will cost you £185k in interest.
Sounds like enough to have bought somewhere smaller when the kids have gone.
So all in all if you rented and then downsized and rented again, you have spent no more than you would have if you bought a place to begin with.
Andy