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ziknik

I’ve paid off the mortgage on my mansion!!!!

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If you look for a mortgage that is linked to libor you should be able to hedge interest rate risk in the futures market, probably with the short sterling (3 month) contract. You would need to do your home work or if not a bespoke investment adviser would sort you out. Here's some links to give you a feel for it.

 

http://www.bbalibor.com/bba/jsp/polopoly.jsp?d=1630

 

 

http://www.euronext.com/trader/contractspe...MepDerivative=7

That’s a really good idea too.

 

I’ve had a quick look on Google and it seems LIBOR trackers are not very common.

 

I’ll have a more detailed look when I have more time.

 

I’m currently on the hook to Nationwide if I settle my mortgage early so I’m not sure I can afford to change for a few months

 

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I’m starting to feel like the only bull in the village on this site… And I’m not a housing bull.

 

This is my view.

 

** Houses are over priced in the UK

** Real prices are very likely to fall

** Real prices could continue to increase for 2 – 5 years before the next big crash. (They could also crash tomorrow)

** Nominal prices will not fall lower than the 2009 bottom.

** At this point in time it benefits me if house prices fall (real and nominal) as I am planning to buy a bigger more expensive house as soon as I can afford it.

 

 

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OK, I've done my first trade

 

I've shorted 'Gilts June' using Capital Spreads.

 

Gilts seem to go up and down a lot so I'm hoping to sit tight until I've hit target.

 

Target - 114.47 (will move down each day to cover fees)

EeeeKKK,

 

I've just lost 100% of the money.

 

Not a good start. Thankfully I've still got 14 years and 11 months to make up the loss.

 

Next month I might invest with a little less leverage to save myself from losing everything again.

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I’m convinced there is only one outcome for the UK. That outcome is “TOAST”. However a lot can happen between ‘Today’ and “TOAST” and I’m hoping to make the best of it.

What are your thoughts?

 

I’m starting to feel like the only bull in the village on this site… And I’m not a housing bull.

 

This is my view.

 

** Houses are over priced in the UK

** Real prices are very likely to fall

** Real prices could continue to increase for 2 – 5 years before the next big crash. (They could also crash tomorrow)

** Nominal prices will not fall lower than the 2009 bottom.

** At this point in time it benefits me if house prices fall (real and nominal) as I am planning to buy a bigger more expensive house as soon as I can afford it.

 

What are your thoughts? - GOOD QUESTION LOL

 

* Despite everything - the average man on the street (I am certain) and some /many in the City (I think) seem oblivious to the idea that UK house prices are well over priced. Obviously many on GEI have their own differing points of view. Maybe it means that nominal prices will not fall much lower. I do think this means that it will take a lot of pain / high interest rates to fully burst the bubble. Maybe it will just be a stagnating market for many many years - would not surprise me. I vaguely remember Switz. being a country with stupid house prices where houses are inherited with long standing mortgages! Germany seems to be the opposite. In short many unknowns.

 

* I think there is a massive difference between the idea of owning your own home and being a BTL. If you sold a house and bought gold 5 years ago you made money not because house prices fell but because gold rose - but it was a risk and might not have worked out like that. Maybe Im too cautious, but I think it is highly risky to sell a main residence to take such a bet. Selling out of UK BTL on the other hand...., probably sensible.

 

- set against that of course is being able to prudently buy a house /main residence without excessive debt / gearing - something that is very difficult in today's market.

 

* BTL is an interesting one - with pension saving difficult and annuity rates crap one can see certain attractions. However the German market is much more attractive than the UK one as per this piece - but will UK investors realise that ?

 

http://www.fleetstreetinvest.co.uk/economy...rket-01510.html

 

Although even German debt is forcast to hit 100% + of GDP given time.

 

* UK (or any) Gov is much less likely to penalise ordinary home owners main residence than other investors / investments - however this is not guaranteed as witness Norman Lamont ERM fiasco. Higher value homes will be vulnerable to the mansion tax idea.

 

Personally I prefer the idea of owning a home and playing safe by hedging if possible. Easier said than done :(

 

 

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Personally I prefer the idea of owning a home and playing safe by hedging if possible. Easier said than done :(

 

I agree with you.

 

It’s very very important to feel comfortable with your choices. However, it’s hard to balance risks.

 

I’m reflecting on my reasons for buying at the moment…. checking back to see if I made the right choice.

 

I’ll post my reasons below later so I can find them easily next time I want to double check my decision.

 

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I agree with you.

 

It’s very very important to feel comfortable with your choices. However, it’s hard to balance risks.

 

I’m reflecting on my reasons for buying at the moment…. checking back to see if I made the right choice.

 

I’ll post my reasons below later so I can find them easily next time I want to double check my decision.

 

Ziknik,

 

Great to see this thread continuing. It is good to see other people questioning even their own ideas. Sorry about your went-wrong-short. I've made a few bum trades this week if it is any consolation. I'd have done better just to sit tight and wait for the big big chance rather than trade when I'm not convinced of direction.

 

I'll be interested to hear your house thoughts. We're in a lucky position and are wondering whether to rent for the next 3-4 years till after HPC or until we go overseas again, to buy as big as we can afford because we can actually afford something quite nice, or hedge by buying something very small and squeezing in for a few years whilst keeping the Gold etc going.

 

W

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This is some of the thinking that lead me down this path….

 

(forums are great for storing ‘thinking’)

 

I might buy a house soon too.

 

It's going to be a small house

I'm going to buy it with maximum mortgage and minimum deposit. i.e. sell the minimum amount of gold.

 

I hope to buy a bigger house in 2 to 5 years time.

 

I should add to the above, I have a 10% cash deposit too at the moment and I hope this will be enough to secure a mortgage without selling any gold or silver.

 

I'm going to buy soon. I've outgrown my flat and I don't need the risk (riff-raff landlord, landlord repossession, etc...) of moving into another rental property. The law does not protect renters enough.

 

I'm hoping for a tax payer funded handout for FTB in the pre-budget report. I will buy after the pre-budget report, hand out or not. I am buying a home for stability I cannot get renting. I'm more than prepared to lose several times my salary if houses go down in price. I've just past caring about the money.

 

The mother ******* government have screwed me to bail out filth and scum. Prudent, risk adverse & hard working people are not welcome in this country any more. I can't beat them so I may as well join them.

 

Most houses are up on the 2007 peak round here (south Manchester). I've been fairly relaxed about it until this weekend. I thought they weren't selling. I phoned some EA's for information on houses I've seen on Right Move. To my horror, most of the property on RM is sold already. Lots of it is going through above asking price. There are waiting lists to buy. The EA's cannot believe it.

 

EDIT to add: EA's are not allowing gazumping of buyers in a good position to secure a mortgage, you have to join the waiting list and hope the other buyer drops out.

I think housing is a very poor investment right now. We are at bubble prices and it is very unlikely that they will rise in real terms. It's most likely that we get a double dip in the short term.

 

3. I'm trying to hedge my position. I could load up on debt and buy a large £0.5m house now OR spend £140k on something smaller and wait to see how the situation develops. There's only two of us + a future child. I don't need a mansion just yet.

 

4. I am losing money on rent anyway. There's little difference between rent on a one bedroom flat and a mortgage on a 4 bedroom house. Obviously interest rates may climb in the future so I am buying a 2/3 bedroom house.

 

5. The fundamentals could look poor for the next 25 years Japan style. I'm not going to wait 25 years. My personal fundamentals look great and I should be able to double my earnings in the next five years.

 

We need to move because we need another bedroom. I've spent 3 months looking at rental houses and I can't find anything that beats buying. I've even tried to coax my landlord into buying another house so we can rent it from him. He owns hundreds of small flats and big houses. Unfortunately he doesn't do small FTB houses. He says he can't take a good income from them.

 

The small houses are in crazy demand here. Rent are around £750 / £700 (probably cheap compared to other parts of the country). Mortgage interest on buying the same property would be £300 - £550 depending on deposit. Even if interest rates increased by 400% I would still be better off buying.

I'm not buying to make money. I will always consider my home to be outside of my investments. Houses cost too much money and take too long to sell for me to consider investing in physical property at the moment.

 

I'm not intending to wait for a second slide because this could lead to withdrawal of mortgages.

 

I hope house price fall. I want this for £200k in the future http://www.rightmove.co.uk/property-for-sa...y-27019223.html

 

I'm buying with an interest only mortgage btw. So I am renting it from the bank rather than owning it. It's far far cheaper to buy than rent where I live. Rents are down hard, but it seems landlords would rather keep their houses empty than cut rents any further. They also won't sell for less than the 2007 prices.

 

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Hi Wanderer

 

Ziknik,

 

Great to see this thread continuing. It is good to see other people questioning even their own ideas. Sorry about your went-wrong-short. I've made a few bum trades this week if it is any consolation. I'd have done better just to sit tight and wait for the big big chance rather than trade when I'm not convinced of direction.

I deserve everything I get for my stupid short. It’s a good reminder of risk. It was arrogant of me to think I could put down a random trade in the Gilts market and sit back waiting for the money to roll in.

 

My Mrs was on the phone the other day to one of her friends, “We’ve got an interest only mortgage but we are saving to make sure we can pay off the mortgage at the end” – I felt so bad, she doesn’t know I lost the money.

 

I thought about making up the loss with my own cash and decided to let the loss stand. These pot’s of money work best for me when I get in to the ‘pot mindset’. This first month’s loss will remind me what it feels like to lose everything in this pot.

 

My other pots are:

 

1. Pension – Incorporating ‘beaten down dividend payers’

2. General Investment Fund (previously known as FTB fund)

3. Gambling / Trading

 

The risk in this ‘buying a mansion’ pot of money should be somewhere between the Pension and the General Investment Fund. I’m not likely to spreadbet again anytime soon in this thread.

 

 

I'll be interested to hear your house thoughts. We're in a lucky position and are wondering whether to rent for the next 3-4 years till after HPC or until we go overseas again, to buy as big as we can afford because we can actually afford something quite nice, or hedge by buying something very small and squeezing in for a few years whilst keeping the Gold etc going.

 

W

I can 100% guarantee you that no-one can be sure a HPC will complete in 3-4 years. We could be in a 30-40 year HPC or maybe no HPC at all for another 30-40 years.

 

Interestingly, going overseas gives you the opportunity to set a deadline if you can choose to go abroad in 3-4 years time. You could be looking at a fixed(ish) time period – you could rent for 3-4 years till after the HPC or go abroad if it doesn’t come.

 

So assuming you are looking at 3-4 years fixed(ish), I would say look to rent something nice, suitably sized, secure and most importantly, with a stable & reliable landlord. You can keep your gold / investments and you can have the right home for your family. Gold is not likely to under perform property in this period so you shouldn’t lose out financially.

 

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It’s been a lot easier to pick a trade this month. I am going long on BP in my spread betting account. Spread betting is much cheaper than the dealing & management fee’s associated with actually buying shares, especially with the small amounts of money I am dealing with.

 

This trade is completely separate to the BP shares I hold in my pension portfolio. I am looking for a capital gain on this occasion.

 

I reckon BP is deeply oversold in relation to the rest of the big oil players. I think the market has over-reacted to the recent oil spill.

 

I am feeling a little uncomfortable spot oil prices. Brent was $1.50 more expensive than WTI this morning. Normally, WTI is a couple of dollars more expensive than Brent. This extra cost takes in to account the extra transportation requirement from the oil exporting nations to the USA. I remember this happened in 2008 before the mega deleveraging as traders in the USA grasped the situation quicker than those trading Brent in London.

 

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It’s been a lot easier to pick a trade this month. I am going long on BP in my spread betting account. Spread betting is much cheaper than the dealing & management fee’s associated with actually buying shares, especially with the small amounts of money I am dealing with.

 

This trade is completely separate to the BP shares I hold in my pension portfolio. I am looking for a capital gain on this occasion.

 

I reckon BP is deeply oversold in relation to the rest of the big oil players. I think the market has over-reacted to the recent oil spill.

 

I am feeling a little uncomfortable spot oil prices. Brent was $1.50 more expensive than WTI this morning. Normally, WTI is a couple of dollars more expensive than Brent. This extra cost takes in to account the extra transportation requirement from the oil exporting nations to the USA. I remember this happened in 2008 before the mega deleveraging as traders in the USA grasped the situation quicker than those trading Brent in London.

Take care because with spread bets you can lose more than your original stake if you get it wrong.

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It’s been a lot easier to pick a trade this month. I am going long on BP in my spread betting account.

...

:rolleyes:

 

I've had to bring forward the money from July and use it to beef my margin on the above BP trade.

 

I will also increase my long position by one third when the FTSE opens tomorrow.

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Take care because with spread bets you can lose more than your original stake if you get it wrong.

 

I've lost the shirt off my own back several times ;)

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Inspired by 'The Last Bear', I've decided to track the supply of the houses in my area.Supply of houses (like mine in my area) is definitely increasing.

 

 

There are 7 houses on Right Move

1 is Sold STC

1 is Under Offer

5 are 'For Sale'

 

The mean asking price is 13.4% higher than I paid for mine.

 

 

One house (like mine within 500m of my postcode) has sold in the last 3 months according to http://www.nethouseprices.com/index.php

 

It sold for 4% less than mine (I viewed it myself and thought it was way way over priced for its condition)

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:rolleyes:

 

I've had to bring forward the money from July and use it to beef my margin on the above BP trade.

 

I will also increase my long position by one third when the FTSE opens tomorrow.

There's no new trade this month as I had to spend July's money early to beef up my margins on June's BP long.

 

This position is still underwater :unsure:

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I was particularly cheesed off this morning following the release of some sold price data for houses on the market at the time I was buying. However, through typing up this post and looking at the numbers on the screen, it doesn’t seem so bad any more.

 

House one: Asking price was 13% above the asking price for my house. The condition seemed much better from the photo’s on Rightmove. I choose not to view the house as I thought it was too expensive for the area given the market conditions at the time. However, today, I discover that the sold price is only 6% above the amount I paid making the house a better deal as presented. I don’t know what came up in the survey for the house. I know the buyers almost pulled out after he survey so I hope it was something that will cost a couple of grand making the over all deal similar to mine.

 

House two: Asking price was 20% above the asking price for my house. The condition of the house was generally better than mine from the pictures on Rightmove. I chose not to view the house as the estate agent told me the sellers do not want to hear any offers below ‘X’ price. I thought it was too high. However, today I discover that the sold price is only 2% more than I paid for mine. Thinking about it as I am typing this post, I know from the photo’s on Rightmove that I would need to replace the kitchen - approx £7k of work by my estimate so the price for a suitable liveable home would be a similar deal to mine.

 

Another house has sold too but this house was never on Rightmove. I wonder if it sold at auction. I can’t remember the price, I will check it when I do my monthly tracking of supply in a couple of weeks.

 

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This month there are 7 houses for sale (like mine in my area and on RightMove) = 0% increase from the previous month

 

4 is Sold STC 300% increase

0 is Under Offer 100% decrease

3 are For Sale 40% decrease

 

The balance is tilling towards lack of supply

 

The mean asking price is 12.5% higher than I paid for mine a decrease of 0.9% on the month

 

5 Houses have in the last three months according to http://www.nethouseprices.com/index.php

 

The average sold price is 1% more than I paid. A 5% increase on the month

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It's nice to know you made that. Congratulations!! with the economy now it's pretty hard to make our move.

Things work out if you put in the effort and bide your time.

 

You'll get the move you want before long

 

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I've gone long USDJPY this month. Last time USDJPY hit 85, we got a decent sized bounce. I'm hoping for a similar thing again.

 

Sadly, that's the entire depth of my analysis.

 

My Previous BP trade is looking OK. I'm around 25% up at the moment.

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Inspired by 'The Last Bear', I've decided to track the supply of the houses in my area.Supply of houses (like mine in my area) is definitely increasing.

 

 

There are 7 houses on Right Move

1 is Sold STC

1 is Under Offer

5 are 'For Sale'

 

The mean asking price is 13.4% higher than I paid for mine.

 

 

One house (like mine within 500m of my postcode) has sold in the last 3 months according to http://www.nethouseprices.com/index.php

 

It sold for 4% less than mine (I viewed it myself and thought it was way way over priced for its condition)

 

What an interesting website, feel like a snooper now. Not sure it helps me much, 2 sales of similar properties since 1999 and the last one 4 years ago :lol:

 

Mind i've just noticed it represents a 200% increase on my unmortgaged purchase so guess i can breathe better :rolleyes: Always wondered what they sold for, thats going to get the neighbours talking ;)

 

More interesting, one fairly similar has just gone up and it's asking around double the last sale in 4 years.

 

How accurate do you think this site is Z in terms of properties listed, only i'd swear some right down my street were sold and are missing, unless they ended up being let.

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How accurate do you think this site is Z in terms of properties listed, only i'd swear some right down my street were sold and are missing, unless they ended up being let.

Nethouseprices should be 100% accurate as the data is taken from the Land Registry database. It can take a few months for a sold price to appear after the sale.

 

Some sites update faster than others. It's worth checking another site such as http://www.houseprices.co.uk/

 

Zoopla has prices going back to 1995 for some areas. http://www.zoopla.co.uk/house-prices/

 

If you spot an error or you know about an omission - you can report it to the land registry http://www1.landregistry.gov.uk/propertypr...t_error_rep.asp

 

The land registry will investigate and update the data. They will send you an email with the outcome of the investigation.

 

 

 

 

 

 

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Nethouseprices should be 100% accurate as the data is taken from the Land Registry database. It can take a few months for a sold price to appear after the sale.

 

Thanks Ziknik, the houseprice debate passes me by a lot of the time due to rural nature, as sometimes struggle to monitor prices in villages.

 

Perhaps use this though as inspiration to keep a rural check for my region. Pick a few areas I know well enough and start another thread without hijacking anyone else's, as a rural check for my own interest as much as anything.

 

 

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I am moving this one too !

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