Monday, Jun 30, 2008
Timber!!!!
Reuters: Crash worries grow over housing market
More gloomly figures, how much longer can the UK housing market take before it goes same way as US market, not long I think. What will be the final nail in its coffin?
Posted by speculatorone @ 01:23 PM (988 views) Add Comment
8 Comments
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1. str 2007 said...
"Approvals are now pointing to house price falls of 15 to 20 percent this year," said Vicky Redwood of Capital Economics.
These figures will put a significant amount of BTL portfolios in negative equity.
By this time next year the majority of BTL portfolios could have no equity.
With the recently reported increase in rental property available combined with the fact that unemployment is likely to rise the level of defaults in this sector are likely to rise significantly.
Banks should be calling for equity top ups before the BTLers run out of equity altogether.
2. cyril said...
In the last property crash, a frend of mine had to rent out his flat because he needed to move and he was in negative equity. It seems to me, the BTL brigade will be in the same kind of trouble (if they're not already). He had about 5 difficult years with dodgy tenants and all the rest of it but he survived in the end because he had a decent-ish job.
Mind you, his flat only cost £55,000 at the top of the market so a lot of todays' amateur landlords are going to be up sh+t street.
3. tyrellcorporation said...
A mate of mine tried to sell his house last summer. He was then persuaded by the EA not to sell it but to rent it out and to buy another. He then took out an IO mortgage to finance the new house purchase. Even at the time of this decision (pre credit crunch) he admitted he was subsidising the tenant's rental payments from his own pocket by about £50 a month. He cited the old chestnut that he was in it for the long game and that the rental property was his pension (he's a teacher so would be getting a platinum plated pension anyway!!). He's now into negative equity on his new house and both are plummeting in value. I don't have the heart to say 'I told you so'.
How many other saps have been suckered across the UK?
4. cornishman said...
"He was then persuaded by the EA not to sell it but to rent it out and to buy another"
I suppose that was legal - but it shouldn't have been...
5. Timwest100 said...
Surely EA's have no business advising you on what you should do with your property assets. They are selling agents, thats it! I expect them to give you factual information about different possibilities avaiable to you, but to offer advice as to which to take sounds like it should be illegal as it is with other financial investment packages.
Even if it isn't illegal, why are they doing it? are they making more money buy advising people to let and buy rather than sell and buy? I would have thought not.
6. need-a-crash said...
@4. Your right, why isn't that kind of financial advice, with all its serious consequences, as heavily regulated as the selling of stocks & shares??
@3. "How many other saps have been suckered across the UK?"
Absolutely loads is the answer. I know a number of people in London who moved house in the last 4yrs and were told NOT to sell their previous place by EA's but rent them out. These people had no real intention of becoming landlords and probably never even considered it before the EA's told them it was an easy route to free money!
7. gone-to-colombia said...
No matter what they were 'advised' by an EA they are still responsible for their own actions. This failure to fully understand the magnitude of debt and risk has led to a nation of idiots.
8. it_is_going_with_a_bang said...
"Prime Minister Gordon Brown is banking on an economic recovery next year "
That's just the kind of 'banking' decision I would expect of him.