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House Price Crash Forum


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About bluegnu

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  1. Hahaha...great read! Check out the tags at the bottom of the article too. 😄
  2. I remember when articles questioning BTL started appearing across the press. A few months later S24 was announced. Of course we'll never know for sure and I'm definitely not one for conspiracy theories but seeing that happen in realtime opened my eyes to what can perhaps happen behind the curtain.
  3. Tenant Fees Bill – MPs unanimously vote through second reading https://thenegotiator.co.uk/mps-vote-through-2nd-reading-of-tenant-fees-bill/ Looking good!
  4. Reality noun noun: reality 1. the state of things as they actually exist, as opposed to an idealistic or notional idea of them. "he refuses to face reality"
  5. I think the interesting thing about this story has been the public response. It could have been 'boo!...hiss!...nasty banks evicting a nice couple', but it wasn't. Most comments have been supportive of the bank and critical of the couple for IO with no repayment plan. I'm sure other banks could take this as a green light that repossesion of IO property is socially acceptable.
  6. If I remember correctly many BTL mortgages require a certain amount of equity in the LL's main home to qualify, say a maximum of 60% LTV? I've wondered if we start seeing widespread falls in house prices LL's may find that the increased LTV in their home no longer satisfies the lending criteria for the BTL mortgage. Of course many older LL's own their own home outright and many more would have seen their LTV fall dramatically due to the recent HPI and so won't really be affected but I do wonder if there are some out there who have just scraped through, younger LL's who have yet to pay down their main mortgage or LL's who have MEWed to release cash for the BTL deposit? Could we hear stories of double margin call, LL's having to restore the LTV of both their main home and the BTL?!!! Leverage, eh?
  7. I seem to remember reading that Germany has a similar system to this. Land is sold to individuals at a reasonable price who then sit down with 'prefab' companies and spec up the house they want to live in. I think Germany has a whole prefab industry that simply doesn't exist here. I would love to do this!
  8. Eh? Is this just another way of describing fixed rate mortgages?
  9. Price of land and building costs stayed pretty stable but profits have almost doubled since the introduction of HTB rising pretty much the same as the average HTB loan. How on earth can HTB to justified after seeing this?
  10. Yup, this is the most frustrating thing for me, the previous generation of house buyers don't quite realise how astonishingly lucky they were. It's not just standard inflation either, they had 20+ years of falling mortgage rates. Lets assume someone can afford a monthly payment of £800/month on a standard 25 year repayment mortgage. At 10% you can borrow about £90k, at 2% you can borrow £190K. Now lets say someone took a £90k mortgage initially at 10% in the past and can now remortgage at 2 % - they'd now be paying £381/month. Remember this is just the effect of falling mortgage rates and is not inflation adjusted and yet they'd be paying less than half! Now lets adjust the figures for inflation. £800/m today would have been equivalent to £400/m in 1992 and that would allow you to borrow £45k. Remortgage that today at 2% and you'd be paying £191/m. Falling interest rates has made it easier and easier for a whole generation to pay off their morgages and would also have allowed average Joe Bloggs to MEW as he went along. TL:DR - someone taking on a mortgage in the early 90's has seen their monthly payments half due to falling interest rates and half again due to inflation. ...and as we go into a world of rising rates that is all about to go into reverse.
  11. It's worth playing around with an online mortgage calculator - for mortgage holders a 1% increase in mortgage rates increases the monthly payments by about 10%, and for borrowers it reduces the amount they can borrow by about 10% (for the same monthly cost).
  12. Indeed. A couple of my friends have had extensions and roof conversions done. One of them had it done a couple of years ago when London prices were rising 10% pa, thinking that piling money into the property is better than keeping it in the bank. Twenty grand on a loft conversion will added 50k to the house etc. He did pay for it with savings though, not debt. The problem with this though is that so many people are getting it done. In some areas/streets the 3m extension into the garden and a room in the attic will start to become the norm rather than a luxury and so the value of these improvements will decline.
  13. I had exactly the same thought. When rates start to rise it could be utter carnage/a thing of sublime beauty (delete as applicable). I had a play with the numbers the other day and found that a 1% rise in mortgage rates reduces the amount folks can borrow by about 10%, assuming the same montly cost. Bear in mind that the BoE Term Funding Scheme is ending in Feb and has been reckoned to have suppressed mortgage rates by about 0.5% so I think it's very reasonable to see mortgage rates rise by 1% over the next year.
  14. Neal Hudson tweeted a nice summary of the figures a few days ago, 65000 units under construction! Scroll down to the 3 posts on Jan 21 (I'm not sure if folks like embeded tweets here?)... https://twitter.com/resi_analyst?lang=en-gb
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