Monday, Feb 26, 2007
House price boom 'could end soon'
Dail Mail: House price boom 'could end soon'
The era of rising house prices and low interest rates could soon be at an end, say leading economists.
In a red alert to Britain's 18m home owners, they said rates could rise while house prices fall. Last week, the average house price went above £200,000 after more than a decade of increases
Posted by cash_buyer @ 02:24 PM (167 views) Add Comment
9 Comments
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1. sirgoogle said...
Well I have had my first personal indicator of BTL going sour ....
Chap had 5 houses (GBP1.2M) and GBP800K in mortgages - and had borrowed on credit cards for the deposits.
Went a bit sour. He has now got rid of the houses (just) and is paying off the remaining credit card debts. Seems the whole experience was not worth it, the debt was piling up and ate up any capital gains made. Had nearly been taken to court over the debts. Barely got out with the shirt on his back. Recons that he won't do that again.
This (smart) guy called the market a bit too late to make a profit. But he did get out and will soon be debt free (but learned his lesson - so he says).
I do not think others will be so lucky now the tide is turning.
2. Dohousescrashinthewoods said...
Thanks for that, Sirgoogle, good to hear.
Nice to see that the simple facts are finally being presented to real people - interest rates are unusually low, things are changing and the likeyhood is that rates will rise.
The BOE seems to be in communication mode - I guess they want to raise rates but don't want to shock people this time. Punts on a rate rise at the next meeting anyone?
3. bidin'matime said...
SirG - heartwarming stuff!
4. sirgoogle said...
Bidin'
Yes it is. I really tried not to smile while I was being told this.
Yes ... RESULT !!
5. geed said...
cash_buyer...You posted the source as the "Daily Mail". I was gobsmacked to think I was reading such blatant truth from a main stream minion rag, only to find out that it was thisismoney.co.uk. You had me there, Good article though, simple and to the point without any journalistic opinions.
Sir G, a truly heartwarming tale. I am astounded that these people can sleep at night, house deposits on a credit card....sweet jesus!!!
Just had a call this morning form the estate agent saying the owners of our rented property wants to sell and can we tidy the place up for inspections. They own next door also. Been here for over 2.5 years, house is in a top spot and would have accrued some serious capitol wealth but i reckon the owners are old school BTLers, not these young wet behind the ears pr!cks. They must realise that for the yield to make sense they would have to up the rent up by a huge unrealistic percentage.
Lets say they own half the house (Big assumption i know) ($700,000 / 2 = $350,000). 5% on $350,000 is $17,500 /annum, this is what you can comfortably get in the banks here in Australia. We are paying roughly $17,160 / year in rent, so it would seem a shrewed move to keep the property as they have the bonus of Capital gains to come on top of that. I'd say they realise the Capital gains wont be there anymore so they are selling up and putting there money elsewhere....its a big confidence booster that i think i've got it right, things are going to get even more sour here in OZ.
6. inbreda said...
Geed - tell them that if they want the place tidy EVERY time there might be an inspection then it will cost them. It's a cost they will have to lump in with 'maintenance'
7. millard said...
Dohousepricescrashinthewoods: I've got a few quid on betfair for a .25 rise and a couple on .50, while .50 is highly unlikely it's worth £2 for a gamble of getting £148.....
8. harold said...
IMHO with all the noises coming out about "inflation expected to fall" I think they'll hold off until April. Sad to say.
9. inbreda said...
Again - it's those mysterious utility bills that have no effect when they increase, but lots when they fall. What about the poll tax increasing above inflation and everything else that is costing more. It is starting to look as if they make up or ignore the figures at will.