At what point do you remain here, and sell your 'home', back

[the lynx]

Yes. It is the MYR craze.

Why buy it now? It's going to sink even further surely given the series of disasters coming Malaysia's way? (Oil price, Gas price, Malaysia Air, Political craps etc).

It is more for practical reasons rather than investment-related ones.

I have Malaysian friends who decided to change them in tens of thousands so that they can now pay off their mortgages (or at least a huge chunk) for properties in Malaysia.

Meh.

[PNGMK]

Yes. It is the MYR craze.

Why buy it now? It's going to sink even further surely given the series of disasters coming Malaysia's way? (Oil price, Gas price, Malaysia Air, Political craps etc).

It is more for practical reasons rather than investment-related ones.

I have Malaysian friends who decided to change them in tens of thousands so that they can now pay off their mortgages (or at least a huge chunk) for properties in Malaysia.

Meh.

Ah ok - I guuess we may see MY interest rates spike like Russia then.

[JR8]

Ah ok - I guuess we may see MY interest rates spike like Russia then.

A very good point!

[Wd40]

Just curious about one thing. Do properties keep appreciating forever, like some of the property owners on this thread seem to suggest? Wouldn't there be a point when an apartment becomes unlivable and needs to be razed down. How long is it? 30 years? 40 years? 50 years? Its only the land that holds value isnt it?

[sundaymorningstaple]

Once a flat/condo hits 45 years of age (on 99 year leases), it is doubtful it will appreciate any more and should probably start losing value as it is only a lease. 999 and freehold will probably continue to appreciate until a rumour of a government buyback happens (highways, other civil infrastructure). However, if a flat/property is being bandied about for privatization, then the possibility of a new round of increased valuations will normally happen, as redevelopment/privatization will normally result in the petition for new lease (not always given).

[JR8]

Just curious about one thing. Do properties keep appreciating forever, like some of the property owners on this thread seem to suggest? Wouldn't there be a point when an apartment becomes unlivable and needs to be razed down. How long is it? 30 years? 40 years? 50 years? Its only the land that holds value isnt it?

No they don't go on by default. Just ask the former residents of Detroit or similar previous boom-cities. The mansions of Riga, Latvia, Warsaw, Berlin, and so on...

The hope of 'appreciate forever' comes via many factors. Build quality, economy, wealth, desirability etc etc. What do you think it might take to trash values in Kensington, London, or on Madison Avenue, Manhattan?

My home in London is a mere 154 years old; I grew up in a c450 year old house. Some things were built to last (and in retrospect) improve with age Should we bulldoze the palaces of Rajesthan because they're well past 50?

Absolutely no buildings of any age or architectural merit in the UK can be 'en-blocked' except under exceptional circumstances, and it's very very very rare that it is granted. This idea of 'build everything shiny new again every 30 years' is a strangely Singaporean thing and anathema to anyone with an interest and belief in the value of culture and history...

[JR8]

Once a flat/condo hits 45 years of age (on 99 year leases), it is doubtful it will appreciate any more and should probably start losing value as it is only a lease. 999 and freehold will probably continue to appreciate until a rumour of a government buyback happens (highways, other civil infrastructure). However, if a flat/property is being bandied about for privatization, then the possibility of a new round of increased valuations will normally happen, as redevelopment/privatization will normally result in the petition for new lease (not always given).

In the UK once what were originally standard 100-125 year leases get down to about 80 years remaining, then you start encountering problems. They're less attractive as people have this notion, not of 'I'll live there five years and move on', but instead, 'Hang on, I'll maybe live 80 years which means my home ends up as worthless!'. Mortgage lenders in parallel get sniffy, the pool of potential buyers evaporates.

In the UK you have a statutory right to extend a lease. By default the extension adds an additional 90 years to the unexpired term. I recently did this to a lease with c75 years unexpired. Not a fun process, but entirely pragmatic and ultimately self-funding+.

I think I've mooted this before - what happens when the older HDB estates here have remaining leases such that they're unmortgageable? About 65 years remaining and the valuation curve becomes steeply downwards. Well, I'm sure HDB have an answer to this, as they're going to have to...

[sundaymorningstaple]

JR8, I don't think they do. Don't forget. The country is only 50 years old so only the very oldest flats are getting on to near 50ish so they've never had to deal with the problem before. Most of the time the estates are slated for redevelopment and the existing flat owners are given new flats in new estates based on the market of their old flats at a given point in time (unsure when/and what markers they use but it's probably out there somewhere. This happened to my Sister in law a couple of years ago when the HDB bought back their flats out on the Farmways (off of Jln Kayu) and moved them to the estate just opposite the Greenwich V shopping centre where the old Seletar Market once stood on Yio Chu Kang Road & Seletar Road.

[Wd40]

Just curious about one thing. Do properties keep appreciating forever, like some of the property owners on this thread seem to suggest? Wouldn't there be a point when an apartment becomes unlivable and needs to be razed down. How long is it? 30 years? 40 years? 50 years? Its only the land that holds value isnt it?

No they don't go on by default. Just ask the former residents of Detroit or similar previous boom-cities. The mansions of Riga, Latvia, Warsaw, Berlin, and so on...

The hope of 'appreciate forever' comes via many factors. Build quality, economy, wealth, desirability etc etc. What do you think it might take to trash values in Kensington, London, or on Madison Avenue, Manhattan?

My home in London is a mere 154 years old; I grew up in a c450 year old house. Some things were built to last (and in retrospect) improve with age Should we bulldoze the palaces of Rajesthan because they're well past 50?

Absolutely no buildings of any age or architectural merit in the UK can be 'en-blocked' except under exceptional circumstances, and it's very very very rare that it is granted. This idea of 'build everything shiny new again every 30 years' is a strangely Singaporean thing and anathema to anyone with an interest and belief in the value of culture and history...

Interesting! So the build quality of UK apartments must be good then. In Singapore there are not many examples of apartments of over 50 years old. But the few there are, from what I read, owners had maintenance problems, like leaks etc, like the Pearl Bank apartment, which was put on en bloc 3 times. In case of other poorer countries, its even worse. In Indian cities like Mumbai some of the 40+year old apartments are terrible rundown and dangerous to live in.

[JR8]

Jln Kayu, looking at an aerial map (say centred on the adjacent Fernvale Road) you can see the redevelopment there. Between red-tiled roofs to the south (YCK), some to the north and quite a bit of undeveloped land surrounding, some apparently more recently cleared. Grids of new blocks going up. Any idea what the low-built red-tiled mansion sized bungalow-type structure is sitting on that *huge* plot of cleared land say 1000M to the west of Jln Kayu... that's got to be some valuable 'ransom strip' of a building? [...Cue: Thoughts of the Mitre Hotel...] I don't know that specific area but it must have been an interesting neighbourhood. Almost suburban, perhaps a bit 'ulu', it must have been a pretty peaceful place.

If the estates get redeveloped before the length of the remaining leases becomes an issue, and the residents are moved to new estates then that would appear a solution. Barring the inevitable 'I was born here, and I will die here' contingent.

I forget how HDB value blocks due for redevelopment, but such things are largely based upon well recognised formulae, with some arguing over matters like precise potential future value if the property had a renewed lease, and some tweaking for internal unit condition etc. In the name of efficiency I expect HDB make it an attractive enough deal that few issues arise. Such disputes can otherwise go on for years, and time is money.

The block around Greenwich V, again if you look at a map, that's being redeveloped encroaching into in an area of tile-roofed houses. Out of interest do the government have to power to 'compulsory purchase' streets of houses, or would that block have perhaps been land put to another use, warehousing and the like (for example Trellis Towers in Toa Payoh is built on the site of a historic biscuit factory!)?

--- Didn't HDB list/gazette a few (?) historic estates, perhaps down Queenstown way? Ah well, I'm sure they'll have thought up a solution before future lease issues arise. I can imagine the stereotypical kiasu uncle: 'Yah we live in an HDB, but it's a Conservation HDB you know!'

[sundaymorningstaple]

Jln Kayu, looking at an aerial map (say centred on the adjacent Fernvale Road) you can see the redevelopment there. Between red-tiled roofs to the south (YCK), some to the north and quite a bit of undeveloped land surrounding, some apparently more recently cleared. Grids of new blocks going up. Any idea what the low-built red-tiled mansion sized bungalow-type structure is sitting on that *huge* plot of cleared land say 1000M to the west of Jln Kayu... that's got to be some valuable 'ransom strip' of a building? [...Cue: Thoughts of the Mitre Hotel...] I don't know that specific area but it must have been an interesting neighbourhood. Almost suburban, perhaps a bit 'ulu', it must have been a pretty peaceful place.

When I first moved into Seletar Airbase back in 1983 from where you are referring all the way to Jalan Kayu parallel to YCK were old miltary buildings (mostly quarters). The one in front of the huge government building (restricted access) is the only one left. all the rest have been demolished for the widening of YCK from 2 lane to 4 lane years ago. That one sat well back off the proposed widening area. For a time it was used by a local archery club but not sure if private or SSC operated. Behind the government building (the huge grey thing) are more military buildings sitting around a radar or some other type of transmitter. There used to be a number of very tall antenna masts (2 or 3) out there but I don't know it they are still there or being used. You cannot see those back building from YCK but you can see them from the CTE.

I lived out there in the camp from early 83 till I moved into my HDB flat in Sep 99. It's peaceful normally, except when SAMCO used to bench test their rebuild turbine engines out at the Seletar Airport. Then you couldn't hear your TV or hardly talk without yelling. But it was usually only for an hour or two now and then. Hadn't Premas Int'l taken over management of the old black & whites from UDMC, I'd probably still be there today. I loved it out there as it was just about a close to being home as I could find on the Red Dot. I was close to the water as well.

[JR8]

@WD40
Well, it's complicated
London occupied a pretty defined central area until quite recent times (c1800). For example Kensington Palace was a Royal 'out-of-town' summer residence, and the adjacent Kensington Gardens, now half of what is commonly referred to as Hyde Park, was where the king and his entourage used to go and hunt deer! A further example is Portobello Road, named after the Battle of Portobello, and now famous for it's street market, which used to be a simple farm-track connecting Notting Hill Gate (the 'Gate' was derived because it was the site of a toll-gate on the road from the west into London*). That track led from the Gate up to a farm about two miles north called 'Noten Barnes' [i.e. 'barns']. Located on a hilltop, the name for the area evolved over time into Notting Hill.

As London grew in wealth, so did the likes of population density. Houses were heated via coal fuelled fireplaces. Usually at least one in every room. Houses were big, and rooms were small enough to facilitate a simple fireplace heating them, so a middle class house might have say 8 - 12 fireplaces, and grander place might well have 20+. This of course was well before the advent of smokeless fuel, and so London fast became something of a victim of it's own success. The air was very polluted, and in winter it was commonly shrouded in a 'pea-soup' fog, or more literally smog. This is where the term (later borrowed by a historic US rain-wear company) 'London Fog' came from. Maybe you've seen the sort of conditions portrayed in Jack the Ripper (etc) movies, where you'd be out on the street and not be able to see your own hand extended before you.

So what happened was there was some kind of societal movement from the 1830s. Some of the larger family estates (Grosvenor, Cadogon, Portman, deWaldon etc), begun buying whole fields, whole farms, out in what is now 'Zone 2'. There they built magnificent squares and white-painted pillar-fronted terraces of grand houses. These were pitched as being healthy areas, more suitable for the rapidly growing middle classes, with garden squares and communal gardens, where families could enjoy space and fresh air, away from the dirt and overcrowding of the centre of town. And the people flocked to them, and hence rose neighbourhoods like Knightsbridge (and yes, that was named after a bridge across a tributary of the Thames used at least in part by knights heading to Hampton Court Palace to the west!), Marylebone, Kensington, Notting Hill, and so on.

But World War One changed everything. In 1913 you might be a well-to-do middle class family occupying a house like one of these - Stanley Gardens, W11.

... with parents, perhaps 6 children, and 3-5 staff. Maybe 5-6,000 square feet each, and backing onto small private gardens, that in turn back onto enviable communal garden squares. The domestic staff were in the front of the line that got drafted to the front-line, and a huge proportion never returned. A lot of young men, sons of the household who otherwise might have expected to inherit the home were enlisted as officers. Ditto as to their fate.

The result post-WW1 was the surviving remains of families occupying huge houses, which were under-staffed. Suddenly areas such as these started to become somewhat less attractive as a reduced family with less or no staff, and less income, were simply not capable of running them. WW2 was the follow-up blow that changed everything. A great deal of family wealth was destroyed, as were those young enough to earn it. Longer established 'suburbs' such as Kensington and Knighbridge were less impacted, as by then they were probably home to long-established inherited wealth. More recent aspirational suburbs such as Notting Hill were hammered hard and by the late 1950s they were run-down ghettos where no polite person would dare to venture.

The UK begun a policy of mass-immigration of labour from the colonies. Many people from the Sub-Continent emigrated to the northern mill towns of Bradford, Coventry, Birmingham, and so on. West Indians who were coaxed with jobs as train drivers, postmen, bus drivers and so on seemed to congregate in west London, especially centred on Notting Hill. This saw the rise of rogue landlords like the notoriously violent Rachman http://en.wikipedia.org/wiki/Peter_Rachman It's after him that the British terms rachmanism, and 'a rachman landlord' are coined.

He bought up those huge houses, and housed maybe 20-30 immigrants in each, in slum conditions. A lot of the rights and protections you see today in modern tenancy law, tenancy agreements (even here in SG) likely derive from this one monster of a man.

Places like Notting Hill became essentially no-go zones. No sane person would venture north of Notting Hill Gate, even into the late 60s. Gradually, almost street by street, that boundary was progressively pushed further northwards. New housing laws and protections finished off the likes of Rachman. Aspirational but poor workers saw these magnificent streets of houses, and so there came a market for splitting up the huge old houses into flats that people could afford. The business opportunity was so compelling that hordes of building contractors were brought in from all corners to carry out such conversions. Many of them were from Ireland and were semi-skilled. There were almost no building regulations/codes so invariably the 'conversion' into flats was done as cheaply and hence shoddily as might be expected when a quick profit was the only goal. This is where the expression 'Gerry-built' derives from, meaning done badly/done cheaply. Gerry being a euphemism for your then average working-class Irishman.

By the time I moved there, the Front-line had pushed northwards to Westbourne Grove. My first home, as the owner, was the ground floor of a previously grand house located about 400M to the north. Even 25 years ago you had to keep your wits about you going home from work up those final few streets. Maybe akin to heading north above 96th (IIRC?) or 110th streets in Manahttan. The buildings were glorious from the street, but the internal 'build-outs' were usually of terrible quality. At the place a few streets away that is now 'my home' I had to remedy that by taking out all the internal walls and ceilings and pretty much starting again from scratch, in strict compliance with today's onerous and expensive Building Regulations.

So that's a double-espresso fuelled potted history of aspiration, deprivation, Gerry-built opportunity grabbing > final progressive gentrification and a phoenix-like rise from the ashes.

I'm sure there are parallel histories in other cities. I had the formative experiences of staying in the rather notorious 'Rex and Stiffles' hotel in Bombay in 1983, and a few years later the perhaps even more notorious Chungking Mansions (ha, what an ironic name!) in Hong Kong...

Notting Hill has now changed so much (I described this previously). The buildings all look pretty much the same from the street but the people who live there seem to have changed beyond recognition. The remaining West Indians who arrived in the 60s together with their [Notting Hill] Carnival must feel the same when they choose to take the money and move on.





* I love these old names hehe... Shepherd's Bush centred on Shepherd's Bush Common, was where farmers from the 1600s onwards would drove their flocks in from sheep-country in the west. That was their last RnR/overnight location before they'd continue onto Smithfield (meat) Market in the City.

[JR8]

Thanks SMS, very interesting. Using Streetview and viewing northwards I can now see all the barbed wire, and a monolithic 70s office-looking building. I remember you describing Seletar and living out that way.

I got to fly out of Seletar a few times, it was the Berjaya hub for destinations such as Tioman. Simplicity itself, but what with all the major road-building that was happening some years ago it's days were numbered. re: the plot discussed, there's probably room for 50+ blocks on that land...

[Primrose Hill]

I too like most people have a figure in my head, may it be £1 or £5/10m. Once that's achieved, what's the point of working anymore?
I started my UK journey in the late 80s in East Londn, interest rates were at 15%. I love the countryside of OXfordshire and Buckinghamshire. However, nowadays with Dave's caraway idea of HS2 you have to be careful where you buy.
My husband quite fancy Netherlands

[JR8]

I guesstimated it in a different way. I looked at my annual outgoings in London, as a presently comfortable benchmark. That was *everything* from the gas bill, DIY, clothing, groceries, dining out, via the mortgage, to holidays and Xmas spending plus all the rest. I then tweaked it considering a move to a regional city; so > no future mortgage likely, but having a car and running costs would be a new necessity, and so on, and so on. IIRC I then perhaps doubled the income figure targeted, since this was a lifetime target, and I wanted to ensure every eventuality was well covered. That indicated a target income requirement ['x'].

To secure a steady reliable annual 'x', one has to consider steady and reliable indexed (for inflation) income streams. This might have included let property, but as my own plan was/is to fully move away from hands on investment (landlording) that is not an attractive to me. An alternative, especially for those who LOATH WITH A PASSION hehehe... managed financial products is self-investing in a small basket from the FTSE-100 index. Conservatively that yields 5+% ['y'], and any longer term capital gain on top is an unplanned bonus.

Therefore the savings pot required is => x/y. Or to illustrate, an income of say 25k, at 5% requires a savings pot of 500k. Pretty damned stark isn't it, but better one faces this well ahead of time. Annuities (how many fixed pensions operate) work in in a similar fashion, though they guarantee a fixed return and generally speaking you lose control of the capital, and never get it back. Annuity actuaries rather unromantically use 'death tables' to estimate based upon your address, education, career and so on what your life-expectancy is. And since you're not getting your whole capital back, you need a smaller lump sum to secure a comparable income.

I know for a fact some people might find this a curious approach to go about things, but I actually found it a surprisingly liberating exercise. I've figured out my own personal 'x' that will allow for all known knowns, and hopefully almost all unknown unknowns (i.e. plus contingency) that I, we, might wish for. That includes a garden, dog, cat, and a goat!

And that's the course I've been navigating for 5+ years now. Progressively exiting property (while tax incentivised) and building my DIY 'annuity'.

--- If it seems a bit over-planned, esp to non UK people, keep in mind many UK corporate pension schemes imploded in the 90/00s. And the state pension scheme went a similar way around 2000, and hence I'm essentially going to receive neither. If you have a rock-solid corporate pension scheme, or national one (CPF etc) then good for you, and I'm very envious The only people in those shoes in the UK these days seem to be politicians and civil servants (spit).

When the time comes to pop my clogs, I want to ensure my dependents are as fully comfortable as they are now. On the flipside, I do not wish to leave anything additional to them/others that I might otherwise enjoy myself whilst I still can. 'I earned it, I damned well intend to enjoy it!'. If this entails breaking the parsimonious habits of a life-time (that got me to this position) then I'm going to have to grit my teeth hard and force myself to do it.

Lastly there comes the concept of winding down the portfolio as time passes on, with the perfect scenario being spending your final £100 on the day before you depart this world. I don't think that one can ever in any meaningful way map this one out, what with all of life's uncertainties. But the old adage goes 'He lived a modest life, and died the richest man in the graveyard': And one thing I'm determined about, is that I am not going to be that man.

--- I 'started out' in work in 1986, and with my first home in '92. So we're almost on a par there. But 15% rates - ouch! you really started out at the hardest time, though I can imagine if you had the funds there must have been some juicy opportunities around. Agreed, there's little point needing to work when you've hit your goal. However employment brings a lot to the day beyond a pay-cheque. There might be future avenues for part time work, volunteering, and so on.... we'll cross THAT bridge further down the line...
Bucks/Oxon have a lot going for them, but from what I've seen as they're becoming prime commuter belt they're getting damned expensive too.
I have a soft spot for the Dutch. They had colonies, and were a great trading nation, so despite their almost impenetrable language they think similarly to the Brits (compare and contrast vs some of our other EU neighbours). It is not an obvious retirement location though, not least in not having a better climate than we do. But I'm sure your husband has his reasons, and London-AMS is such a well served and short route, it would make a very convenient location for a 2nd home...