Pablo-silver or lead?

Many people have mortaged their future. They now (the vast majority haven't woken up to this yet) have very little control of their lives. Interest rates will go up .25 to .5% by the end of this year, to 4.75 or 5%! This will have a massive effect on sentiment. The headlines will come and the sheeple will see how stupid they've been (that will not stop them blaming others). There is no reason why IR by the end of 07 early 08 couldn't be at 6 to 6.5%. Interest Rates at 5.5 to 6% are still historically low. As a reflection to how screwed (and our peception of it) the whole thing has become, consider the folowing; We are in a situation where the level of IR that are probably needed to bring the economy back into balance will be a disaster for those who have borrowed out of ignorance, greed or fecklessness. Here's the Headline "Property crashes as Interest rates reach 5.5%!" The fact that low interest rates (albeit higher than the artificially low ones we saw post 9/11) can cause a crash demostraights that this housing market is out of balance. Pablo Silver or Lead?

They are all correct. Just not the timing. It is happening now. Pablo Silver or Lead?

cocacolalight I have a friend who trades as opposed to invests in the Spanish property market (or did until the market turned), there's no need for hyperbole, its desperate. http://www.surinenglish.com/noticias.php?Noticia=8239 As i say many good Spanish properties will soon be able to be picked up at pence on the pound. Its just the market shaking out the 'loads a money dreamers'. Pablo Silver or Lead?

All! Always have always will. As Markets develop its gets worse. From France, Spain and now Bulgaria and Romania. They say beware of Salesmen bearing gifts. In a new 'developing' market it’s hard to benchmark both the 'market rate' for and the costs associated with the 'purchase and ownership' of property in that country. As the market develops and therefore sucks in 'new mugs in the form of El-Gringo Anglo Saxon' the secondary market i.e. the market to 'rich' foreigners set its own bench marks which are disconnected from the local/real market. In any case in the Off-Plan new build aimed at Foreigners market, the disconnect is probably at its greatest. Florida (obviously not EU) is a mature markets where Brits buy off plan. New mugs would say in a self congratulatory smug way: “I’ve bought a phase 1 villa, 12 months ago for $300k. Phase 2 is being advertised for $340k, I’ve made $40k, aren’t I smart?” The fact is the people paying $340k are fresh new mugs, off the plane and they are in a ‘process’, which has been perfected over 200 years to extract maximum $ out of the unsuspecting. In reality the 12 month old ‘second hand villa’ will only sell at a 10% lower price than that of the new build phase 2 villas. $340 – 10% = $306k, ah well, they’ve still made $6k profit? Yes, well no! When you add the none recoverable costs of purchase at circa $12k and the none recoverable costs of selling at circa $23k. The disconnect between what the new mug thinks he’s made, + 40k and his real position which is a loss of $35k is substantial. The trouble with the emerging new markets in Europe is that over the next 2 to 5 years they are going to be competing against virtually free apartments/villas in Spain. A combination of over building, naïve buyers borrowing too much money to pay too higer price and rising global interest rates topped by oil at historically highs, Spain will provide a source of below cost properties for the foreseeable future. In Spain forget entering the disconnected ‘processes of off plan new build’. You can walk into any EA office and negotiate 30% discounts off the prices (of second hand) and were only at the beginning of the buyers market. So you need to factor in the ‘risk premium’ of buying property in emerging European countries, having first considered all the factors. Just my opinion of course Pablo Silver or Lead?

The last time around BTL’s amateurs weren’t a factor, this time they are. When things get tough (I/R increases, job loss, inflation, property price dropping etc) people will batten down the hatches to preserve and keep their main family homes roof over their and the kids heads. So things are getting tough and the vast majority of BTL’s will do everything they can to keep a roof over their heads. They’ll be trying to sell and if they can’t, they’ll be chucking the keys back at the lenders, shouting have the 2 bed exec lux flat just leave us the 3 bed semi we’ve foolishly mew’d to buy it! In 1988 to 1995 I knew no BTL investors, now the hairdresser, the postman and Butcher Baker et-al have got a couple. They are all shi$$ing themselves. Pablo Silver or Lead?

In areas like Scotland HPI will stop soon and this will shake down into the National averages. Soon the media/press who have been rightly critsised on here will be talking the market down. You can feel the sentiment of the sheeple changing. I know stacks of people shi$$ing themselves, they have tradded up massively and or bought BTL's at the wrong time. I was in a major EA yesterday (6 negs desks) for 40 minuets not one incoming phone call! the only person to enter apart fom me was an irrate vendor. They gave me 30 sets of details for 2 bed flats many were bought 2 years ago and are on the market now for the same price. Most were BTl's who are quiting the market. I know I will be able to buy a 2 bed flat at the end of this year 20% cheaper than the vendor paid approximately 2.5 to 3 years ago. I think I'll wait till the end of 2007 and get it 35% cheaper. This turkey ain't going to fly no more. Assume crash positions! Pablo Silver or Lead?

The reason EA are expanding and taking on extra staff is because its a crap job so new people come and go quickly, its hire and fire. In the 'great market' where property is flying off the shelves'. EA are strugling to earn sufficient commisions to live on. There is low volume in the market, too many deals fall out of bed as chains can't be built or collapse also there is lots of competition, because a monkey can set up as an EA. Pablo Siler or Lead?

In the normal boom bust cycle as we approach the top (Late 2003 to Early 2004 South, E & W Midlands/ Late 2004 to Early 2005 NE & NW and NI + Scotland will follow) the Johnny come lately highly leveraged speculators/investors/btl's need to be right every month Bears only have to be right once! The trouble is the bull has run further and faster than ever before (especially in the north compared to last time being the late 80's) off the back of 'artificially' cheap money post 911 loosening. Holding any debt at present especially on property you don't need to own is absolutely crazy! It will certainly be different this time and especially for our friends in the North. Oil at $50 a barrel is a huge risk to the economy at $60 or $70 we are indeed in unchartered territory and I for one find it scary! Pablo Silver or Lead!

apom little people can make a differance. If you feel that ll these individual acts of fraud, by the applicants, encouraged by brokers and blind eyed by the VI /Financila Institutions, has disenfranchised you from the market by fradulently driving it higher, you should make a formal complaint. I would write a well structured letter giving anecdotal or any other evidence you have and send it to the SFO, the Council of Mortgage Lenders and the FSA. If you can give well structured cogent argument that this is taking place, they are legally obligated to look into it. just my thoughts. Pablo Silver or Lead.

There is a rush to the exits in Florida. Lead by the Brits who have swallowed the Sales Pitch only to discover that the recent 2001 to 2005 double digit HPI was an anomalie. The majority of Brits that bought out there are not able to cover their operating expenses as the rental market is very competetive and the costs of ownership high and getting higher. Property in Florida is on a crash diet, shedding $ thousands by the week, with few serious buyers (some new estates/subdivisions that are dominated by Brit owners have over 50 villas for sale with none sold for 5 months!). I've never seen a market turn from a sellers to buyers market so quickly (Orlando HPI +34% in 2005 and at least -20% in 2006). Add to this the none recoverable cost of purchase and sale (e.g. about $40k), oh and taxes and thousands are finding their dream an expensive, stressfull nightmare. Pablo Silver or Lead?

Seamaster I agree with you that the better quality city centre appartments will hold their price better than the others. However due to the sheer quantity (of good and bad city centre developments in some cities), the timing relative to the cycle and inflationary pressure (on both IR and the economy in general), they are both tanking. Rubbish ones will be down 35 to 45% with many effectively unsellable. The better quality ones will fare better loosing between 25 to 35% over the next 18 month to 3 years and possibly a lot more. The property market is realatively 'good' now, IR at historical lows with property 'flying off the sheves'. Agaist the background theses places are allreadt 10 to 15% off the top. This is a crazy time to be holding New City appartments as investments as many are discovering they are worth less than they paid for them and thousands more in the pipeline. The demand that is left is from new mug BTL's as there are hadly any end users buying these. Pablo Silver or Lead?

The only reason for rates to be cut is if the majority on the MPC think the UK ecomomy is going to go tit$ up! They will increase rates if inflation over the next 4 months increases, either way holding property, especialy highly leveraged property as an investment is a crazy risk at this time. The vast majority of the Johnny come lately BTL's havent got a clue of their exposure. There is only one outcome! Pablo Silver or Lead?

All the buy to let landlords I know (5 that have all come into the market since the middle of 2002) are Shi$$ing themselves. They have portfolios of 3 to 6 properties. All their properties are south of the M4 (+ 2 in Spain and 1 in Florida). They all started out, back in 2001ish with lots of equity in their main and only homes. Now they have Mewed to leverage BTL mortgages and got a few years 'real' experiance under thier belts, reality is hitting. 3 out of the 5 are trying to sell at least one property to try to reduce their exposure. All this in a good market! As it's now clearly turned, it's going to be a frightening spectical to watch it all fall apart. Pablo Silver or Lead?

Mortgaging assets in the UK to fund a business/life in the US does not absolve you of the responsibility for any personal debts on your UK property. It would be very easy to lien his assets in Florida if the lending institution in the UK needed to recover any shortfall on their loan, should he default and they reposes! Pablo Silver or Lead?

Many Real Estate Agents in Florida are openly talking about a 30 to 35% correction in prices. He will be going over on an L1 visa. He will also find the cost of living over there about the same/ more expensive as UK. There is no state income tax in Florida (there is Fed income tax) but there's many hidden costs to living/doing business there. If he thinks there's a lot of paperwork and government interference in the UK he's in for a surprise. It appears about 1 in 4 Floridians works for the city, county, state or fed government and boy do they like paperwork and regulations. You need a licence/qualification/governing body bond and insurance just to sneeze. Truly the land of the free. I hope he's done his home work as it's an extremely unforgiving place, even for extremely experienced and switched on people. What business is he in and what business is he setting up in Florida? How do you make a small fortune in Florida? Arrive with a big one! There are plenty of people there willing to help you make them rich. Been there done it set a business up from scratch and sold it on and I’m glad to be back on the Dorset Riviera! Pablo Silver or Lead?

I get the impression that there are a lot of 21 to 30 year olds on here who are a lot more switched on than their parents, who are probably in their mid 40's to early 60's? I'm 47 and there are a lot of people between the ages of 40 and 60 who really believe the property market owes them a living/retirement! Everyone should do 6 months on the front desk of a High st EA. It may not change your opinion of EA's but it certainly would about Joe public and their total disconnection from normal behaviour and reality when it comes to their piggy bank properties! Pablo Silver or Lead?

The Spanish term for a big estate villa in the hills/country is Hacienda. The little one’s are Finca’s. “ 2 bed apartments on the beach soon to be £50 to £65K 3 bed detached villas no where special soon t be £80 to £90k if anyone will buy them. The scary thing is we all know friends and relatives that own these places. Pablo Silver or Lead?

When the market turns in the NE, NW and Scotland and it will, as sure as God made little apples, anyone that has paid a silly price Will see substantial drops. For the first time in history prices in northern areas not traditionally hot, expensive areas such as Harrogate, York and the Wirral, are the same as the south? This is because many areas in the south have had no increase in prices for a couple of years whilst prices in the north continued to rise. “But it’s different this time”. It certainly is. Many estate agents in the north (that have been in the business for more than 10 minutes) when you look them in the eye and have a grown up conversation, admit it’s totally unsustainable. Dose anyone have an intellectually rigorous argument to say this time the North Will not see drops of circa 35%+. London does not lead the UK property market. It’s the most expensive UK market due to being a leading International city with lots of well paid jobs. It is, as the price increases in the north over the last 2 years have shown (whilst SE stagnated) uncoupled itself. The UK property market as a single entity lead by London is a broken model, be warned by that. London and the south crashed ahead of the north last time because the prices were hugely inflated relative to the north. That why when you look at the stats for last time UK average prices fell about 20%, 40% in the south, 10 to 15% in the north. This time the north has piled on more HPI than last time. This time there doesn’t need to be a London crash to trigger one in the inflated northern markets. Northern bulls, apart from naïve hope over the law of market forces beyond any of our control, what going to stop the overstretched northern house prices falling and falling big time? Pablo Silver or Lead

isv take the family back next year the sticker prices in the window will be 20% lower and if the same agent is still there he'll say " I can get you 20k to 50k off any of these". Spains got a long way to fall. Pablo Silver or Lead?

We've all seen the crash in Spain coming a long way off. -20% on the coasts is just the begining. I have no doubt that many properties on the Costa’s will be uneconomically viable (not enough rent vs. too much cost), whilst at the same time falling in value. There will be many areas where 50% falls will be the norm and still you can't sell. If you can't sell a property and its rental yield is negative effectively the properties worthless. It could be worse than last time in Spain as the scale of UK ownership by naive mug punters is 4 times the early 90's. With this and what going on in Florida it's going to have a big impact on sentiment in the UK. We are all related or now someone who owns in these markets and they can't hide that it's hurting. Pablo Silver or Lead?

Walk into the EA. Ask to see the Branch manager state that under the freedom of information act you would like access to your file (initial valuation form/agency agreement corespondence viewing log etc). That should take them 5 minutes to get together. Then ask them to explain why has the house they sold to an employee? or associtate beem marketed at a subtantially higher price than the one they obtained for you in a static market after being advised to reduce the price? If you do not find this explanation satisfactory. Ask them if they are familiar with the Laws covering EA (the EA act)? Tell them unless they are prepared to come to an agreement, you are minded to make a formal complaint to the police (criminal) and trading standards, with a view to civil proceedings. They will $hit themselves. Pablo Siver or Lead?

No he is correct. The longer the prices run, getting further disconnected from the fundimentals the harder they WILL fall and fall they WILL. Pablo Silver or Lead?

If people are loosing money with prices still going up just wait till they really start falling! Pablo Silver or Lead?

Poole is now Cheaper than Newcastle ‘Up the Toon!’ I've just saved myself £75k (on paper as I'm not buying) 18 months ago Crest Nicholson the developer of Poole Quarter was advertising 3 storey 3 bed Town Houses from £325k. In today’s Compass magazine The have a full page advert: “3 bed Town Houses from £249,950!” “Part Exchange Available!” (their potential buyers are struggling to put a chain together) “Ready for immediate occupation!” (they surprisingly struggled to sell them off plan at £325k) I might pop down and offer them £220k for a quick completion. If they don’t bite then I’d compromise and go for £180k for a slow one. Developer need to understand that they’re prospective purchasers like to be ahead of the market. Pablo Silver or Lead?

Poole is now Cheaper than Newcastle ‘Up the Toon!’ I've just saved myself £75k (on paper as I'm not buying) 18 months ago Crest Nicholson the developer of Poole Quarter was advertising 3 storey 3 bed Town Houses from £325k. In today’s Compass magazine The have a full page advert: “3 bed Town Houses from £249,950!” “Part Exchange Available!” (their potential buyers are struggling to put a chain together) “Ready for immediate occupation!” (they surprisingly struggled to sell them off plan at £325k) I might pop down and offer them £220k for a quick completion. If they don’t bite then I’d compromise and go for £180k for a slow one. Developer need to understand that they’re prospective purchasers like to be ahead of the market. Pablo Silver or Lead?