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House Price Crash Forum


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About joe42

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  1. If you'd bought 1 property and paid it off mainly from your earnings, you could say that this is your pension. But you were greedy and instead of paying off 1 property from mainly YOUR money and saying thank you for all the extra wealth from the rent your tenants, you paid for 7 deposits and were hoping that others will pay off all 7 seven properties for you from THEIR money and you will end up 7 times more pension than you'd deserve. 1. It won't put seven families on the street, just because the ownership of the house changes, there will be people living in the house. 2. You can raise rents, but if you raise too much, tenants will leave and you might have a hard time finding someone else at your new higher price and it is going to be hard to bridge the gap from your own earnings. 3. You shouldn't be that greedy. Why you wanted 7 property on other people's money? Why you haven't paid off 1 property fully? You could just silently say thank you for all the capital gains and unwind the portfolio to a safe number, 1-2 properties let's say and you would still have an easy time compared to others. Instead of this you are still whining, cause you think you have the right to own 7 properties on other people's money. Wake up...
  2. Perfect title! The description contains almost everything, but I would put a bigger emphasis on the fact that as the interest only mortgages do not repay the capital, the monthly instalments are way smaller, so the landlord taking an interest only mortgage can easily outbid the hardworking families in every scenario. This is especially sad, as families are repaying the capital, while most landlords do not have a real plan to repay the capital. So at the moment we actually subsidy the risky interest only mortgages against the safer repayment mortgages. The content is good otherwise, but wording is a bit complicated and I think there is some limit on the description like 1000 characters or similar, so imo make it simpler and shorter!
  3. So then what is your problem with me expecting a correction around 30%? How big crash you want? You maybe want a 70% crash, so then an average house would cost 50K? How this price level would be sustained, when an average family with two earners earns more than that in a year? What do you think would happen if a flat in Central London would suddenly fall to 100K? What would do an French investor, who normally buys similar flats in Paris centre for 1 million? What anyone else in Europe would do with a bit of a cash? You should be a bit more realistic. 30% correction might happen, 50% maybe if it totally gets out of control, but there is no way prices will go down much more than that, unless there is a huge worldwide recession and and the whole banking system collapses.
  4. Sorry, but I was reacting to someone saying prices will go back to the 1997 level, this would be a 90% crash in London, this won't happen. 30% correction quite possible, 50% maybe, but 90% is not possible.
  5. How is that hilarious. Japan hasn't seen recent property crashes before 1990. The current UK government already stopped a housing crash and inflated another bubble. They have also wittnessed quite a few recent property crashes in developed countries. USA, Spain, Eastern European countries etc... They have way more information now, what might work, what might not work, also the whole world has way more experience with asset bubbles, that's why they are already tightening lending, they are trying to prevent it, this is something they have never done in Japan. I might be disappointing you, but I doubt you will ever buy a flat in Richmond for 100K (you could easily do it in 1997), that price level would mean banks could write off ALL their mortgages, so they wouldn't survive, and if banks go bankrupt, savers wouldn't get their bank deposits either and there would be not enough cash printed to go on with everyday life.
  6. The thing with Japan is that time gov and central banks knew way less about property booms, crashes etc... This time, 25 years later, everybody is fully aware of the possibility of a crash, also we have a central bank and gov who have inflated and stopped crashing bubbles, so I would say "this time it will be different" Also I think for a foreign investor it is easier to buy property in the UK now, than in 1990 in Japan, so they would flood the UK if prices are coming down a sensible level. So unless we will have a huge international recession I don't see prices coming down to 2001 level, but I can see a ~30% correction, depending on what the government really wants.
  7. I agree with most of what you said, but I am sure we will never go back to 2001 and 1997 prices (unless there is a huge international recession). For example the average wage has inreased around 40% since that period. Foreign investors would also flood London way before prices fall that much. We also have a generation of property "experts" and whatever happened in the past they would buy in, way before prices would fall that much. On the long term property is always a good investment - if you can get it for a good price (which you can't right now). Also that would mean the whole economy would collapse and there would be truly unrecoverable losses in the banking sector, no bank could survive, savers would loose their deposits etc... so government will not let things going that far. The question is what the government REALLY wants now, if they are OK with falling house prices for a while, in the best case we might see 2010 prices - especially outside London and Greater London, if not, they might again come up with schemes propping up the market and we might not see anything. That is not necessarily a bad thing, they might even start giving away free 20%-30%-s for FTB-s with family etc..., while restricting BTL, resulting in much less change in the price levels - it would be still cheaper for them than building houses.
  8. I think they are chasing BTL, as the big profits dried up elsewhere. Thats why HSBC hq is threatening moving out from the UK to somewhere else (asia maybe) due to "unfavorable confiditons" here. That's the problem with tightening and regulations, banks won't like it, they need the profit. That is what Osborne gets in return of the bailouts, I hope he learns from this and next time won't spend that much on saving them. If someone leaves there will always be other banks who will take their place.
  9. So basically this should not sound as a general attack against all BTL, it should be like throwing out the subprime monkeys who are dangerous to the economy, and opening up the field for new possibilities for other BTL landlords.
  10. My two cents: - title needs to be more obvoius, so people know this is against BTL - we should not mention their petition anywhere as we do not want to give them extra publicity - we could say that this would be good even for landlords who are not subprime overleveraged monkeys and who are buying on cash, or on repayment mortgages, cause than they could be buying easier and potentially cheaper. This might happen, that new people could enter BTL sector, who are playing safe, replacing the former subprime monkeys. We might get a few votes from landlords too.
  11. I mean they are coming back still on stupid high prices, but at least the sale did fall through...
  12. That forum shows the darkest side of people, I never imagined that degree of greediness and dumbness could exists. This girl is a nice example, just bought as much interest only mortgages as she could, without ever thinking of interest rate rises, repaying the capital, just a few quick $$$$ etc..., and talks like she would be a savvy property mogul and says first time buyers are all lazy dumb people thats why they cannot get a house... I really hope this time the gov won't bailout them on my taxes.
  13. What Frick says, this is data from before the budget and should show a huge increase in prices. Also I think prices in London and Greater London are going up, because in the lower segment the prices are going up, mainly because of BTL are picking up the last remaining cheap properties. But it seems to me that on this week there are even a few nice and relatively cheap houses coming back to the market as the sale didn't went through (I am almost tempted...) in cheap areas where price increase was 30-40% in the last two years.
  14. I think the petition needs to be about simple things, so that the average person understands it, otherwise it does not have a chance to get 100.000 votes. I would say something alongside these lines: "Tighten up Buy-To-Let mortgage lending conditions & ban interest only Buy-To-Let mortgages" Details: 1. Income from other sources than buy to let properties has to cover all mortgage payments. Pros: In a falling housing market - when income from BTL properties is drying up - there would be no "domino effect", as landlords could still cover the mortgage payments from other sources, so they would not be forced to sell. 2. Ban interest only Buy To Let mortgages. Pros: Most of the people who buys interest only mortgages never intend to repay the capital, they are gambling on future capital growth. This can be extremely dangerous in a low inflation environment when interest rates are on the rise, as capital growth might not meet the expectations. The interest only monthly payment is also way smaller than a full repayment mortgage, encouraging people to take on a much bigger debt - with no realistic plan on how to repay this debt. 3. These changes above would encourage smaller landlords with stable financial background to enter the BTL market and would stop further accumulation of huge subprime interest only mortgages at the hand of a big landlord - with no hope of repayment in case of a falling housing market. 4. As these changes would not affect existing mortgages, they do not have any instant effect on the availability of rental properties - no tenants would be evicted. Majority of the BTL landlords are already buying on cash or on repayment mortgages - we should encourage these much safer investments. Wording needs to be corrected as english is not my first language...
  15. I would say do not stop at the tax relief, average people does not have a clue about what is that. But if you say "ban BTL mortgages" or "regulate BTL mortgages" or "ban interest only BTL mortgages" masses will understand, we might even get 100.000 supporters. Also we can find valid reasons, which are in line with EU and government thinking: - the EU already wanted to ban BTL mortgages in the EU mortgage directive in 2013, for a good reason. - Mark Carney just said interest only BTL is dangerous to economy - BoE asked for powers to regulate BTL mortgages, they see the danger too etc...
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