House Price Inflation Pros and Cons

[Keef]

I'm with *bob* and Cookie, this is all over my head, and I fear it always will be!

I find the whole thing depressing, and whilst I'm sure you're all lovely people (I know for a fact that some of you are), reading this is just making me feel rather jealous and hopeless, and I'm having wicked fantasy's about lots of houses burning down (whilst empty of course)...

Thing is, you'd only claim over the odds back on the insurance! ;-)

Sorry :-$

[*Bob*]

Come on Keef, get with it..

The small of fresh filofax leather.. the slap of red braces against cotton.. Gearing! Volatility! Ooh! Ahh!! Equities! Aahhh! INITIAL OUTLAY! OOOOHHHHHHH!

Excuse me, I've just c...

[AcedOut]

Insurance on a mortgaged house. That's a binary crash put on a call option isn't it!? ;)

Burn baby burn!

[AcedOut]

Bob - we could have a conversation about the relative merits of the change into the dominant key for popular music of the 1980-1990's is you like. What are your favorites? Westlife have some real winners!

[*Bob*]

AcedOut Wrote:

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> Bob - we could have a conversation about the

> relative merits of the change into the dominant

> key for popular music of the 1980-1990's is you

> like. What are your favorites? Westlife have

> some real winners!

Ha Ha,

Certainly not! That would be off-topic.

[Quaywe]

*Bob* and Mark....is there any room there for me on the sidelines? You should sell tickets! This is one of those "Friday Funny's" posts isn't it? :))

[mockney piers]

If any of the 'laymen' are interested, there nothing too daunting about it. City boys love to use as many odd terms as often as possible to confuse people and make themselves look clever.

Calls and Puts are options that allow you to mitigate risk against rising or falling prices, ie the right to buy or exchange something at a rate in the future regardless of what the future market rate is.

Deltas measure the sensitivity of a derivative (usually a 'future' such as a call or a put) to changes in price of the underlying (the real thing, share, bond, coal) price.

Gammas are basically the sensitivity of the sensitivity.

All this in terms of their day to day job amounts to being glorified spread betters, with lots of clever people crunching numbers to help them do their job.

Gearing or leverage is making money out of (mostly) someone else's money to help you make more money (hopefully).

Hope that helps.

[Ant]

My brain hurts.

[Keef]

Zzzzzzzzzzzzzzz ;-)

One day I'll understand, when I grow up....

[*Bob*]

Err... Anyone fancy a pint?

[Administrator]

Gents, you're taking this thread too far off topic, please don't

[mockney piers]

*swishing sound of piers getting his coat*

Really? I thought I was just helping clear up some of the terms in usage on the thread, being bandied about like secret knowledge.

[Keef]

Dear God yes!!!!!!!!!

[Administrator]

"Gents" was aimed at Bob, Keef and Ant, not you Mockney although I am assured you are a Gent

[Keef]

I fear Mrs Keef would suggest that I'm not :-S

Anyway, sorry, carry on chaps, I think I'd best ignore this thread from now on before my brain melts.

[louisiana]

I see this week in one of the estate agents that 2-beds in this neighbourhood (off LL near Dulwich Park) are now at the heady heights of 300k. This compares to around 225k a year ago.

This takes such properties over the 3% stamp duty threshold. Not good news at all. It was once possible to pay stamp duty out of income, but that's no longer the case.

It also takes a 2-bed over the inheritance tax threshold - probably not good news for co-habitees that don't have the property in both names. And fairly dreadful news for any co-habiting new mums out there: if your partner dies and the property is in his name, you could find yourself homeless even if you inherit the property (no money to pay the mortgage OR the tax bill).

The same of course applies to larger homes, but 2-beds is where people tend to start, and many young families will be struggling to get a house of any kind with current prices.

Louisiana

[Quaywe]

A pint - now we're talking Bob! I'll be at EDT tonight watching the Pom's get tonked by the Irish!

[Jeremy]

Administrator Wrote:

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> "Gents" was aimed at Bob, Keef and Ant, not you

> Mockney although I am assured you are a Gent

Mr Administrator, that sounds off-topic to me.

[AcedOut]

My two-bed flat (no garden) last December received the asking price of ?315k (agents valued between ?285-?325). I turned it down and took the place off the market, but I think most 2-bed places are going for over ?300k now, well over the ?250k 3pc stamp duty threshold.

[mockney piers]

Louisiana.

I guess the cohabitees of whom you speak should remortgage jointly (its not necessary to be married to do this). This way when the old fella is bumped off, err.. drops dead from work-stress induced embolism, mortgage is instantly paid off.

[louisiana]

AcedOut Wrote:

-------------------------------------------------------

> My two-bed flat (no garden) last December received

> the asking price of ?315k (agents valued between

> ?285-?325). I turned it down and took the place

> off the market, but I think most 2-bed places are

> going for over ?300k now, well over the ?250k 3pc

> stamp duty threshold.

Oh boy, worse than I thought.

Though there's not much of anything around, as far as I can see (but have only looked in one window). Have higher prices led to complete sclerosis, I wonder? Or is everything just moving very fast? I notice the only place in my road to be up for sale recently seems to have had a sale agreed just a couple of days after appearing in the window (3 bed house with garage).

Louisiana

[ClareC]

Remortgaging jointly wont make any difference, its the title deeds that count.

Even then it all depends whether the ownership is a joint tenancy or tenancy in common. If a joint tenancy, survivorship applies and the property immediately belongs to the other joint tenant, the value falling outside of the estate and therefore IHT. If a tenancy in common it will however form part of the estate (albeit only the %age of the property owned by the tenant in common) and therefore be included in IHT calculations.

[mockney piers]

Fair enough. We split the title deeds too, maybe i conflated the two concepts.

[ClareC]

and ensure you are stated as joint tenants on said title deeds :)

[beth]

I think Alan said he didn't mind when people who loved their jobs were priced out of the market and had to leave the area.

Well, there are alot of people working in key services such as nurses, midwives and teachers who are already upping sticks and leaving London. I'm not being funny but London can't survive with just investment bankers and stockbrokers living in the city - we need people working in the service areas that will support us, our kids, our parents and ourselves when we get older!! Public services and charities need workers who are able to afford to live in the area. Shared ownership schemes aren't enough. Maybe Alan you don't care now - but when you or a loved one need access to a service at a hopital or through social services or through a charity and you can't get the service because of staff shortages, then maybe you will.

Anyway, Euan Davies did an excellent three part documentary called the Homes we Live in (or something like that!) on Radio 4 recently where he expertly pointed to the danger of rising house prices - and he knows his economics!! I shall dig out the link on the Radio 4 website and post it so anyone can listen to it again!!