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Economic Crash: Should we be feared already?

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Coronavirus with Crude Oil crash strikes in.

All major indices are plummeting like in 2008, gold is picking up in value. UK Oil is almost rock bottom. UK goverment is trying to stimulate the economy, again! 

  • Should we be worried already?
  • Is recession coming?
  • Is 18-year cycle a MYTH?
  • Major politics and public people are getting infected by the Coronavirus.
  • What one of major politics will die due to Covid-19? Will this cause a panic?
  • Will this whole uncertainty bring UK property market down in post-brexit era?
  • Is there enough toilet paper for us in the world? ;)

None was scared about financial crash early 2008, but the tension is building up now and I am a bit worried...
You can click on the image to zoom in. each line - green or red - represents 1 month period.

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I’m in process of buying 2 properties cash and having serious wobble now - what if I can’t get mortgages - does the BRR model not work in recession ? 

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I'm pretty sure it will pass as quickly as it started. I don't know whether I'm optimistic naturally but I dont think it will derail anything.

We have had virus' and diseases before that have come and gone. The percentage of people seriously ill from it remains very low.

People will always need somewhere to live after all...

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Personally, i think this is a prolonged mid cycle wobble.

A lot of the share sell off is over-reaction as companies have lost over 40% in share price who are not affected by the virus.

Plus credit is so cheap at the moment.

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while people need somewhere to live - a lot of the job market is going to be decimated and will take a while to recover - most likley many companies will be going bust along the way - so am not at all optimisitic about starting anything new this year.. Hopefully recovery will be swift but we ar eat the start of this thing so impossible to predict..

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Warren Buffett once said that as an investor, it is wise to be “Fearful when others are greedy and greedy when others are fearful.” This statement is somewhat of a contrarian view on stock markets and relates directly to the price of an asset: when others are greedy, prices typically boil over, and one should be cautious lest they overpay for an asset that subsequently leads to anemic returns. When others are fearful, it may present a good value buying opportunity. 

Market frenzied collapses offer buying opportunities....having cash on hand right now could offer some very good opportunities this year. Periods of market rises offer the long-term investor stable returns when applying pound-cost averaging...this is akin to saying 'Keep calm and carry on' in other words.


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Isn't it more about Banks and financial system rather than providing people a place to live? Of course people will always need a shelter to live in but what big banks are going to do with the mortgages is the question. 

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I'm wondering if it will soon be the perfect time to buy, if property takes a bit of a dip we'll be able to get properties cheaper. Maybe there will be an increase in sales falling through meaning motivated sellers with few buyers. If the country goes into a lockdown no one is going to be able to view any properties coming on the market. This potentially could be the time to snap up some bargains. I'm planning on viewing a bunch of properties now and then waiting to see what happens to see if I can get myself a bargain.

At least thats what I'm hoping.

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Hi. My tenants have given notice and wish to leave end of May this year.  All fine, until coronavirus reared its head. My question is, do you think the rental market will slow down a great deal in London? This is a four bed nice property in Clapham which has very rarely been empty in years. However, having just purchased another two BTL in Manchester, I don't want to get caught out with an empty flat. Any views/ advice appreciated. 

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I think what we can see right now it's just the beginning. Holiday lets and serviced accommodation is already suffering from the crisis. 

I think we should buckle up because the best is yet to come.

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I am full expecting tenants to stop paying the rent now that the govt has banned evictions and are focussing on helping renters - at the expense of landlords. People are 'nuts' to be consdering buying in the midst of all this - at least wait it out a little bit is my strategy

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I agree with the above. I completely underestimated this. It would appear to be far more serious than I envisaged. I've got a purchase going through but I will be pulling out. 

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33 minutes ago, nicholas_b said:

I agree with the above. I completely underestimated this. It would appear to be far more serious than I envisaged. I've got a purchase going through but I will be pulling out. 

What purchase? I'll take it from your hands :)

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Whilst not searching for purchases that are facing through I think Onkar may have the right idea. The world seems a scary place now - but it looked scary after 9/11 and in 2008.

We will get through this. Govts etc are throwing money we never knew they had and we will come out the other side. People have very short memories so you should plan to be in the right place when we emerge from this crisis and now may be the best buying opportunity for a while.

If you are buying, double check all your assumptions; recalculate your numbers and if it all still looks good carry on. 

DO NOT PANIC! Don't be  headless chicken and above all in these uncertain times BE KIND!

Stay safe everyone.

 

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Indeed - don't panic but be smart as the environment is very different at the moment. I agree there will come a time to take advantage but right now feels too soon

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BoE rate down to 0.1% now, historic low. It's like someone has pressed Ctrl + Alt + Del on the entire economic system and we're not sure how or when it will reboot. 

I know it's not the same situation for everyone, but where possible, continue as is and manage the situation as and when it changes. Being based in London, we're prepared if we go into lockdown. One of the benefits will be spending more time with the 5 year old while trying to juggle work! 

As Julia said, be kind and look out for each other, especially the elderly and more vulnerable. 

To the key workers in this situation (e.g. NHS staff, police, fire, teachers, couriers and supermarket workers) - a huge thanks! 

I'm currently reading "The Daily Stoic" and coincidentally am up to the Fortitude and Resilience chapter for September. Some snippets attached which helps the mindset...

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Blog: https://abcdad.co.uk Insta: @abc.dad

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I reckon Q4 or Q1 2021 property market will take a plunge. In the same time proving the whole 18-y cycle concept, which I'm not big fan of, is just another myth.

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On 3/13/2020 at 10:39 AM, emmajayne said:

I’m in process of buying 2 properties cash and having serious wobble now - what if I can’t get mortgages - does the BRR model not work in recession ? 

I am in a similar position of buying a property cash. It is a renovation and planned to mortgage when done to release the capital. Now I am having second thoughts. 

Thinking that better to minimise my capital tie up, I spoke to broker re: tracker mortgage but deals are being pulled. 

My thinking is to delay purchase couple of weeks (as near exchange/completion) to see how this develops. I will then share my thoughts with the seller (inheritance property) and see if they can agree a reduction. 

The property has 11% ROI at current price, but feel more secure if it is financed. Mainly because want to be in a position to buy if market goes down - which I expect it to. 

PS We completed on our second property nearly 2 weeks ago. Viewings last week and 2 applications for first 2 viewings. Agent said rental market very buoyant, but sales enquiries are disappeared. 

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