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London-loser

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Everything posted by London-loser

  1. If I remember correctly, Hometrack have been overly-bullish in their early predictions, certainly for the last two years, with fairly rapid downward adjustments following later in the year. I think they are also saying lower volumes to come... it can't be a fun time to be an estate agent.
  2. Hi Frugalista, I agree with what you are saying. My point was that the guy selling his old-built two-bedder has to compete with the new-build two-bedder and so he can see the value of his property dragged down by an oversupply of new-build (for precisely the reasons you point out), which in turn means he has less equity to help support his offer on the out of town place or whatever (so he must be willing/able to borrow more to maintain the same price of the other place). Essentially, the more the market is built on swapping bubble equity in one place for bubble equity in another the more it is at risk from falling prices anywhere along the chain. We hear how people "have to get X because that's the only way I can afford Y" but can't get X... eventually they have to accept they are not getting X so they are not paying Y. The depth of price falls is sure to be different in different parts of the chain and in differnt areas of the country but all property is potentially affected by the "over-supply" of new-build.
  3. Hi BuyingBear, I agree... but I think they MEANT to say prices are too high (the difference between there being too many new builds and there being too many new builds at a price "the market" can bear). It is a back-handed way of saying new-builds are over-priced. I'll have one if the price drops sufficiently... if not they can stay on the market as far as I'm concerned.
  4. The official number is somewhere around 6%. However, you need to recognise not all landlords are entirely honest and tell the revenue/their lender etc that they have a BTL (they can get a better rate on an owner-occupier loan and some don't like paying tax on their gains). The actual percentage is higher than the official figure but nobody really knows how high. Secondly, they control a far higher proportion of the bottom end of the market (traditional FTB territory) rather than detached houses etc (TTRTR is an exception rather than the rule), which means the bottom of the ladder is actually heavily dependent on BTL purchases/lack of BTL sales. This area of the market obviously props up sales further up the chain. I think you and the person you debated with are both right - BTLs control a relatively small part of the market but it was rampant buying in this part of the market that has driven prices so high... and, in my opinion, lack of buying or selling here will drive the reverse (remember BTLs, having priced most FTBs out of this area, now need to keep providing capital for further sales to take place at flat or even higher prices... if they will not or cannot then prices will return to the level where an FTB buys again).
  5. I bow to your wisdom Charlie. Nominal interest rates were indeed around 12-13% with annual inflation averaging around 15-16% (with zero/negative real interest rates)... it got worse in 1975. All-in-all, it was a grim time... but there were still more houses actually getting sold in 1975 than in 2005! And the CML is predicting the market is going into yet more of a shutdown? Well, if they are right, people MIGHT be able to CLAIM their house hasn't fallen in value but I pity anyone ACTUALLY trying to sell. A Pyrrhic victory?
  6. Aren't those VERY grim figures for property sales? I mean ACTUAL sales - after you have stripped out people shifting about their existing mortgages. I think Savills recently estimated house sales this year will be 930,000 (don't remember if this was the EXACT figure but it was there or thereabouts), which it described as the lowest number since 1974. Is the CML really saying that 2006 and 2007 will be even worse than 1974 (when interest rates were 25% or so, TWO general elections were held, the UK had a three-day week etc)?
  7. So, that is a lender officially saying it believes there is an OVERSUPPLY of new-build property and that the valuation of new-build property is essentially fantasy and that the property market has ceased to function in this area? OUCH! Now, I'm finding it hard to understand how there can be an oversupply of new-build property without there being a general oversupply of property. Either people need the property or they don't... whether it was built last week, last year or 50 years ago is surely a detail. And, as I read it, essentially the lender is saying it no longer wants to lend on these properties since it fears it is being conned and it is not confident its loan is supported by the true value of the property and the equity the BTL claims to have in the property. It is saying it believes the value of these new builds needs to fall (to remove the oversupply and re-balance supply and demand). Now, you may argue this is just one lender but that is pretty grim I would have thought. And whether you like new-builds or not falling prices here must have a negative impact on house prices generally.
  8. Hmm, Please excuse my ignorance over the ins and outs of the benefits system (I don't claim them and don't look to profit out of them so please do excuse me). Whether it is the DSS, DWP, HM Revenues & Customs, Gordon Brown himself, surely it still means THE GOVERNMENT (in whichever name it likes) CAN decide to unilaterally downgrade how much it will pay in housing benefit. It doesn't need to agree it with landlords. You are of course right, landlords can decide they will rent their property for more privately or insist the Housing Benefit recipient makes up the difference... if this is possible.
  9. As others say on this thread, taking investment advice from the man on the Clapham omnibus is a great way to become poor. They'll tell you property is a terrible investment just about the time that the market bottoms out (not when it tops out). And for the record, as pointed out over and over again on this site, unemployment rises AFTER house prices fall not before... prices peak out as everyone is very confident and extrapolate a wonderfully bright economic future... and later find out they were wrong.
  10. Brown closes door on property in pensions FT Story Now, as someone who thought the whole Sipp argument was mostly hot air I can't get TOO excited that it seems to have evaporated completely. Still.
  11. An interesting post TTRTR. I would agree the "political" risk is a serious factor - I seem to remember suggesting to BBB a long while ago that renting to DSS tenants is not the risk-free bet many see it as precisely because it could become a political hot potato (the amount of council tax money handed over to private landlords for housing DSS tenants) that COULD (not necessarily would) be hit quite quickly (the council decides it will pay a maximum of £x and the landlords can like it or lump it). This risk is obviously included in the rental premium you require when you decide to buy/hold property. In my opinion landlords NOT buying (let alone selling) in numbers will see the market fall significantly (precisely because BTLs have priced the other potential buyers - FTBs - out). BTLs are the key support for the market these days, if they re-trench the market WILL re-trench, potentially quite seriously. In such a scenario (which may or may not happen) I think prices will fall, rents might rise (perhaps only temporarily though as the balance moves back towards buying being attractive rather than renting) and longer term yields will rise again. You're describing a bear market in housing, driven by a lack of BTL buying on the back of these regulations. Like I said, I'm not sure they are quite that serious but I think such a scenario could play out (I believe it is likely) for a variety of reasons with this set of regulations not helping. The irony is people will all look back and say "obviously X killed the market (these regulations?), without that things would have been fine" but actually the market got killed by over-excited "investors" who didn't care about yields, didn't mind that they had no risk premium, were happy subsidising their tenants in the short-term etc."
  12. Sorry, if BTL loans get called in on any major scale I'll be looking to buy from a desperate landlord... at the going rate not what he'd like to get or what he needs to ensure his pension isn't trashed. I can't help feeling you are getting over-excited about this but if you are not you really ought to be turning bear about now.
  13. Aaaaaaaaahh, Then it will be time to buy a home... with the money saved and invested while assorted idjit boys bet their pension on 22 Acacia Avenue (because the government wouldn't let them lose money etc). No, I really will feel sorry for them.
  14. Hi enworb, I agree entirely. I'm not trying to stick up for overpriced UK plumbers (the last one my landlord sent around was Iranian - very good, very efficient, much cheaper, nice guy... why would my landlord even consider paying double for a lazy British con-artist plumber). My point is that these immigrants (I have no problem with immigrants by the way) undermine salaries in MANY areas (plumbing just happened to be the one this thread's originator chose so I stuck with it). Lower average salaries undermines landlords' abilities to "raise the rents", especially if the people who undermine the salaries are happy "doubling up"/packing themselves in. This is NOT the saviour of the BTLs' pensions... it is actually a bearish point (even if there is a short-term positive)... but I'm guessing he has "beenhearingthisforyears".
  15. The reason you haven't received a glowing welcome is not that you are a "non-believer" it is because you choose an inflammatory name and then obviously post a question that has been addressed over and over again on this site (if you bothered to read previous threads - I know it's dull - you'd have answers to these points rather than needing to post them all over again). You have two points - existing renters (STRs etc) and new immigrants. As has been pointed out on this site, ad nauseum, existing renters DO NOT create NEW demand. Only NEW demand supports higher prices or further BTL purchases. Existing renters DO NOT support a new purchase (I rent... if my landlord buys a new place to rent out I am providing no NEW support for him). If I sell a place to a landlord and then rent it back from him for less than he pays in a mortgage I am NOT helping him. This seems to be too subtle an argument for most BTLs. Immigrants (for example Polish plumbers) DO potentially create NEW rental demand. However, as you point out, they create demand for half a room in a flat... while increasing the supply of plumbers available and pushing down the average wage of a plumber in the UK. So, while adding £50 per week (maybe) in new rental demand... they undermine the average wage an old-school UK plumber can charge to the tune of what... £50 per day? TTRTR used to tell us how it was great for landlords that he could get foreign builders to work for half the price of English builders... while refusing to acknowledge that this in some way undermines the ability of those traditional English builders to pay high mortgages/high rents. If six Poles come here and work as plumbers, all living in one three-bed flat (on split shifts or whatever), while they provide a SMALL boost to rental demand what effect are they having on the status quo? I would say they are hitting six existing UK plumbers very hard, driving down their incomes and making it very difficult for them to support high mortgages and high rents. I would argue that they are having a deflationary effect on the cost of UK plumbers, an therefore on average earnings of UK plumbers and therefore on the average rents/mortgages UK plumbers can support. The BTL "benefit" is a short-term gain with a long-term cost. This is BAD news for the UK property market. WHY do BTLS think this is a fantastic result for the UK property market? It is convenient to focus on the one side of the argument that boosts what you want to believe (bull or bear) but both sides are important even if you choose to believe they are not. There seems to be a distinct lack of "joined-up thinking" in such arguments... could this possibly be because bulls only want to see one side of the argument? Surely not? As for pensions and BTLs HOPING their properties will rise in value, you hit the nail on the head - it is HOPE not investment.
  16. Indeed. A true tragedy... and under a supposedly socialist government.
  17. I didn't really want to post this in the Sipps Myth De-bunked thread but I found myself (through no fault of my own) in conversation with a mortgage broker (from Surrey) recently who said he thought it was pretty much all hype and that very few people had shown interest to him... except a few very wealthy people who he thought it made sense for. He also said (I don't know if this is true) that Standard Life has agreed to accpet BTLs into its Sipps but has already stipulated it will ONLY accept property that has its building insurance with one of six selected companies. Any other property would need to change its building insurance away from its existing insurer to qualify. He suggested this could just be the tip of the iceberg on future demands related to Sipps - since the Sipp-provider might want to cover itself in many other ways (such as insisting any work on a property is done via one of its approved workmen etc).
  18. I reckon Mr Average doesn't have £26k to worry about investing.
  19. Or unlucky if it in fact points to prices going down... Strange that, it's lucky if you are buying, unlucky if you are selling... or have eight similar properties in your portfolio already? You might not believe it but I'm not a pessimist at all... except where London property valuations are concerned. I really do worry for you TTRTR... I fear you think buying £10 for £14 is a bargain because it used to cost £15. I'm off out now.
  20. Yeah, how big would you guess his team of researchers is TTRTR? Apparently his in-depth research showed we had a point a year ago... but now things have changed marginally we no longer have a point. Ansd having done his in-depth research why is he SO excited about the recent (one-month/two-month) upturn? AAAaaaaaaaaaaaaaaaahh, dear, I need to go for a walk now. Thanks Researcher2000, I haven't laughed like that since I last read a dogbox posting.
  21. TTRTR, Hopefully by now you'll know I have nothing personal against you... but I am curious about this posting. I realise you are "a glass is half full" type of person but why would you ignore/downgrade the surveyor's opinion on the rental value of the property but lap up his opinion on the value of the property? Other than of course that if you do that it is self-confirming. His comment does not confirm it is a BMV property just that it is at the bottom end of his "usual" range. Perhaps I'm being "a glass is half empty" person here but isn't he covering his Aris? He's saying he has valued this property at the BOTTOM of what would be the USUAL range... if it actually proves to be worse less than this (not saying it is necessarily) don't blame me. You probably won't be surprised to hear from me that IMO a property offering a yield premium over the cost of borrowing of 1% (1.8% if we take your rental yield) is NOT a bargain BMV property... remember you suggested recently you were getting something like a 6% yield premium when you first started buying in 1995 or so. I have no particular interest in seeing you do badly but I still (politely) suggest you have just "falling in love" with your property investments and now your can't see any of your love's faults. It's beautiful... but it's not investment. It may well be that the surveyor is talking out of his (covered) Aris... but I find it interesting that your opinion of his opinion seems strangely biased. I think bears just say that GENUINE BMV properties are RARE while BTLs say they can get them day in day out. As I just explained, I don't think a rental property with a yield premium of 1.8% suggests it is BMV... but then I'm not in love with property.
  22. Hi Mark, I have my deposit in a high interest account and other investments elsewhere making a lot more than 4.75%. I just think dogbox et al deliberately choose cash as the alternative because it allows them to kid themselves that little bit more. I am a bear... still don't want to go to the HPC pub meet though. I like ranting anonymously.
  23. Which drinks night? Is there free alcohol in the offing? If you mean the HPC pub meet, like you, I'm staying incognito.
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