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House Price Crash Forum

Chartered Surveyor

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  1. I enjoyed reading the writings of two great educated thinkers namely a chap named Daddy Bear and Dr Bubb and its was the reason for reading this forum. I now appreciate the reason for their absence. My last reply with respect to the banks gaining access to cheap money to the money markets is my final clue for you all. They cant.
  2. I may be able to offer something of an answer to your question. I sent in my first post the other day were I touched upon the re-mortgage market. Over 2009 the levels of re-mortgage work that I was doing was very low. In fact dead. I would hazard a guess that about 10% of my workload was allocated towards this area. I will be able to give you a more accuarte figure shortly. This signalled to me that people were moving over to their lenders SVR. Since the start of the year 2010, the volume of remortgage work for me has increased quite considerably especially among the following three lenders namely: RBS, Natwest (off-set mortgages) and Godiva (Coventry, Buy to let Arm). All of the applicants have resonable loan to value ratios. 75% approximately. One of the questions I raised in my first post, and again I will be aiming to find more about it very shortly is the ability of the lending houses to access cheap money from the money markets. I have a gut feeling that the banks are beginning to grow once again suspicious of each other which in turn will result in, (and I hate the phrase) CREDIT CRUNCH mark II Edit Note: It would appear that Coventry Building Society is aiming to achieve access to money through its savers, were I can recall reading that they now offer 3%+ on their instant access accounts.
  3. I seem to have caused a bit of a stir with my first post. I will continue to offer up my observations for the time being and report what I am experiencing with volumes of mortgage work, and values being achieved in the London market only. For now I wish to give some of the reasons as to why I am bearish on property values over the medium to long term. The simple answer is DEBT and the level of DEBT both private and public. Thers is tonnes of it. Since early 2009 interest rates have been set at dangerously low levels. As a result (a year later) we are seeing the first glimpses in unsustainable asset price inflation. ( I wonder how small a Wagon Wheel will go this time). With low interest rates this has brought out the less cautious borrowers. They seem to think that these low rates can be maintained and will not go up, so out they go in the belief that they can buy a big house. This to me helps explain why prices have gone up of late, although it must be mentioned on very low volumes. Gordon Brown’s optimistic view for the UK economy is all smoke and mirrows. Whoever gets in after the election will have to address the problem of all this DEBT. The economic outlook for the the UK looks awful. I would even go as far to say that I think the conservatives are even trying to lose the election. There is so much ammunition for them to use against Labour yet they remain strangely silent. The UK national debt and balance of payments deficit is unsustainable.? How is it possible for a country to spend more than it earns. That is why the papers have been talking about a currency crises and a possible bond strike. It is a reason to also consider taking flight out of sterling if that is the currency you hold. So this country is stuck between a rock and hard place. A catch 22 situation if you like Print more money and you get a currency crisis, raise interset rates, then it is back to square one with a banking crisis. The 'A- level economics that I read taught me that the market was always bigger than government intervention and so interest rates will have to go up with government spending cutback or the crisis will get worse. It is at this point that I am doubting my own thinking. Are we in a new era. Are we embracing communism? If we are then it will be a long wait till you get your correction. My view is dont buy a house now if you are taking on alot of debt. Rising interest rates and falling prices go togther. The housing market can only bottom out during a period of high interest rates. Current low mortgage rates are therefore artificially maintaining the very high price of property in the UK. For me now is time to sell, for the next leg down towards something approaching more reasonable long term average house prices surely can not be far away. How long can this market be propped up.? Indefinitely? Remember the only time to invest in property is when prices are on the floor and yields high. With 3-5% yields for a London Buy to Let., you would have to be mad to go out and grab one now.
  4. Bot there are some people using this thread that are very angry with life. Anyway a few quick replies to some of the questions raised. In due course I will attempt to answer as to how I value a property be it for a sale or remortgage and what I am looking for with respect to providing a value for mortgage purposes. I will also attempt to give my views why I am bearish on the housing market for the UK and what are the views of other surveyors that work around the country. Edit Note: The RICS publishes a monthly report on its members views. These are from Chartered Surveyors working in estate agents. Chartered Surveyors engaged in mortgage valuations tend to be more bearish. The London is a bit more complex, but I will give my views on this at a latter date. Finally, there is a huge difference between a surveyor and a Chartered Surveyor. For one a surveyor (not Chartered), cannot carryout mortgage valuations for lending purposes.. Professional Indemnity Insurance plays a big role for starters. .
  5. I have listed below the major players (lenders) and the not so major. RBS & Natwest (off set mortages- popular with City boys) Nationwide Abbey Alliance and Leicester Coventy Building Society - a very strong lender that has come into the market of late especially their buy to let arm Godiva. You need 60%LTV. You still get the few try on desperate BTL owners trying their arm at getting a good rate but they are soon found out, down valued and rejected as their LTV does not meet the necessary requirement. My view on this lender is that they have taken over from Cheltenham and Gloucester who were a well run and sound bank with an excellent and well capitalised portfolio until they were forced to merge with a bust bank Woolwich ( Barclays) Mortgage Express - largely Audits which I hate to add is on other surveying firms were the value given for mortgage purposes was excessive. Making a return slowly our friend Northern Rock - good applicants and sound checks appear to have made Yorkshire building society - increased volumes are now appearing In the doldrums - BTL Chelsea Mortgage Express Accord Scarborough Bank of Scotland Halifax Intelligent Finance Bimingham Midshies Bank of Ireland To name but a few
  6. I have been reading this site with some interest for a short while now and have decided to offer up what I am experiencing to date with resepct to the housing market in my patch anyway. As a Chartered Surveyor I am engaged in undertaking survey and valuation work within prime Central and West London for a major surveying firm. As a surveyor I have always been well fed with work from all of the major lenders though with the onset of the recession my workload is way off its peak 2007/2008, So were are we today. From February 2009-September 2009, my workoad boomed largely due to the massive intervention by the government though money printing and a lack of competition from other surveying firms that simply folded. Throughout this period those that were buying were the following social group: a) cash buyers, and a few smart City Boys (probably with inside knowledge) young affluent families who were taking the long term view that they were buying a family home and in it for the long haul. c) those that had been waiting in the wings for a market bottom, or those who were previously priced out of the market and now saw an opportunity to buy without understanding the fundamentals of what could happen if the market continued down. I must add that most of the LTV ranged from 30 to 75%LTV max with 60LTV being the mean. d) Government Approved Housing Schemes. I really do pray for these poor simple souls. These are very poor buys just on economic/fiscal judgement alone . I can see a public enquiry one day investigating why the Government actively encouraged the banks to lend on these whilst at the same time giving a back door bailout to the distressed House Builders. This Housing scheme is a horrible scam. In my view, in nominal terms at least, the market bottom was reached in March 2009, and will remain so, although I would like to be proved wrong on this. Since September 2009 to December 2009 things started to turn ugly again with sales drying up and I was very much anticipating a second dip. This never materialised due to a further injection of QE. This brings me to were we are today. With QE running out next month (February 2010) I was on guard for tough times ahead and feeling bearish once again. Instead I have been surprised with the new year thrusting out of the blocks with some gusto. The re-mortgage market is back in town with sales up and agreed sales prices up , although I must add that quite a large percentage of those agreed purchase prices I have downvalued as they cannot be suppoted. In addition to this I am surpised at the LTVs, we are back to 75, 85 and I hate to report I did my first 95%LTV just last week. I am also seeing more of the old lenders come back into the market who before where nowhere to be found. This, suggests to me that they are getting access and funduing from the money markets. How long this will last I dont know., and I would welcome any feedback on this. So to conclude my first post I am Bullish on the housing maket for the very short term (3months) and bearish over the medium to long term. Whilst I hate to say it, I do not consider a violent downturn in property values, not just yet anyway. Instead this very much looks like it will be a long drawn out affair. There is a power game in place with big money involved. The banks and governments will do whatever it takes to protect and preserve their position. It will be the tax payer that will pay the price. For me housing is a horrible investment to participate in especially BTL. For me hard and soft commodities is were I see the money, Leveraged housing stock and sterling for not what one should be holding just right now..
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