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lets get it right

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Posts posted by lets get it right

  1. There is going to be a stampede for the exit from BTLs who realise that prices aren't going to get back to 2007 levels

    Off all the myths that dominate this site - that is the most nonsensical. Face FACTS - the vast majority of BTL scum landlords are not mortgaged up to the hilt, regard their investment as medium to long term and there will NOT be a STAMPEDE (what a nonsensical word to use regarding the highly illiquid property market) 'for the exit'. And, prices will go back to 2007 levels. It might take 10 years, it might take 20, but they will go back.

    ... and from forced sales from public sector redundancies.

    The vast majority of which will be voluntary from retirement and people leaving of their own volition. Another stampede that won't take place.

  2. I am willing to believe that as well, but would like a linky to the relevant info please.

    If this is true, it would imply that the proposed changes to HB would not have the negative effect being screamed about by the Guardian, as LLs could easily take the hit financially and would be willing to lower rents on a "better the devil you know" basis.

    Which is why the government isn't bothered about this. They know most landlords can take a hit and will take a hit rather than sling out tenants whose rent is guaranteed by the state.

    Sorry, can't remember link. I would have read it following a link from here in the list of news stories sometime in the last couple of weeks I guess.

    At the height of the bedlam I'm sure some people got caught out. We all read on here about people who bought city centre flats in Birmingham and Manchester that were worth half what they paid for them a year after they bought them. On here it was generally interpreted as meaning that all BTL landlords are idiots and leveraged up to the necks.

    Unfortunately they aren't. On a purely anecdotal basis, I've rented two properties over the last 7 years - both landlords are very comfortably off and both houses are unmortgaged.

  3. Good for them. However the truly 'in it for the long term' landlords are just bystanders when it comes to determining the price of property.

    Absolutely. As has often been said on here, property prices are set at the margins and, obviously, only by those buying. It only takes one buyer to set the price for a whole street, or streets, of similar properties.

    And if 10 properties out of a thousand similar properties come on to the market over the course of a year and, one by one, sell - albeit after being on the market for months and with price reductions - those prices make the market.

  4. Have you noticed how all the portions are getting smaller? From packets of crisps to bath foam, slowly getting less for more. Its a joke and not taken into account in the inflation. Running at nearer 10% once you take these frauds into account.

    Yes I've noticed that. You open a packet of crisps and think 'wow, a dozen crisps'. Someone bought me a big cardboard (square) carton of chocolate buttons the other day. The carton contained little packets of chocolate buttons with about 25 buttons in each bag. Must have been 8 bags in there. Total amount of chocolate - about as much as you get in a small bar of chocolate.

    We're being shafted from all directions.

  5. How is raising interest rates going to control inflation? If the cause of the inflation was domestic demand - fine, dampen demand by raising interest rates.

    But if the cause of inflation, in a globalized economy, is a relentless rise in commodity prices caused by demand increasing dramatically in Asia, how is raising interest rates in the UK going to affect that?

    As is so often the case, it looks as though economists, the financial media, politicians, the BOE etc etc. have everything exactly back to front. Also, in global commodity markets like wheat, oil, sugar etc - the price is massively influenced by options on futures contracts.

    4 times global GDP is gambled every fortnight on currency exchanges - yet the idiots in charge think raising interest rates in the UK is going to control inflation. The banksters and hedge fund managers are the problem. Not interest rates.

    Feckwits the lot of them.

  6. And yet in the South West people taking in a lodger charge huge amounts like 400 pounds/ month just to rent a room. Or for example in Swindon near where I live renting a small 1 bedroom apartment would be 600-700/ month. I would hate to be a minimum wage worker in the South of England, their lives must suck unless they live with parents on cheap rent. Minimum wage is I think around 770 / month after tax so imagine paying 400 rent on that and living off 370/ month!

    Spot on. And as long as people, particularly young people who have no cash behind them, continue to pay these absurdly high rents, property prices aren't going anywhere.

    There is a general perception on here that all landlords are johny-come-latelys who are mortgaged up to the eyeballs and only need a month's void to be ready to sell at any price. Nothing could be further from the truth. The average LTV of all landlords is, apparently, 37%.

    Went to look at a house recently - 440k - been on the market for a while. Owner lives abroad but was there tarting the place up - house had been rented out. Owner moaned about the last tenant - how demanding she was and how she did this, this and this to the property and they ended up in dispute and he lost a few months rent. Moaning away about how it was 'his pension' - as if that gave the situation some earth-shattering importance.

    We didn't really want to buy (although we were looking at it as prospective buyers) so we went back after a viewing and asked him if he would consider renting it. He said he wanted to give it a bit longer as he wanted to sell up and buy two smaller BTLs 'with cash'. Anyway, that was a couple of months ago. He has since dropped the price by a whopping 10k and put it up for rent at £1600 a month. He, I think, is a typical landlord. He is not in a position where a month's void is going to hurt him - or even 6 months - he is in it for the long term and owns another 3 BTLs.

    The big problem now is that BTL is so bloody entrenched. Over the last few months, n the course of looking at properties to buy or rent, I keep meeting people who tell me they have a number of BTLs. As I said in another thread, none of the ones I know are baby boomers either - they are all a good bit younger than me. With a large number of people with BTL portfolios that are not highly leveraged, the only thing that is going to bring this edifice down is a rent strike.

  7. I would say that a slow down of FTB's is another reason why rents increase. Anyhow I still think the other psosters explantion of house prices and rents was spot on.

    The points made by MarkG are right I think. The cost and availability of mortgages will obviously influence a potential landlord's buying decision but, once he is a landlord, the rent he can get depends on what tenants can afford - and, of course, on supply.

  8. I am living in a house that I could not buy for £1700 down and £850 per month, not even at today's low mortgage rates.

    But, notwithstanding the desirability of a house price crash, and your situation - in many parts of the country properties worth a relatively small amount of money are rented out for £500 to £600 a month - indeed this seems to be almost a 'base' rent.

    In my area £850 gets you not much more than a flat - 3 bed terrace if you are lucky, 2 bed terrace more likely. The cost of properties like that is about £225k to £250k. (300k gets you a 3 bed semi but that gets £1000 a month in rent) and a 200k mortgage won't cost you much more than £850.

    So, I guess it depends where you live.

    Arguing for a house price crash is one thing - arguing, as some do on here, that renting is somehow a smart move is, in my opinion, nuts. Renting under Shorthold Tenancy Agreements is a bit soul destroying and, of course, you have security of tenure handed to you in 6 month chunks. And renting long term really is a waste of money.

    Some on here bought on the dip in 2008 and were congratulated all round. 2 years on I bet you won't find one who thinks they made a mistake.

  9. Spot on

    Spot on? Sounded like a load of nonsense to me. Rents don't go up because landlords' mortgage costs go up - 'forcing' rents up! Rents go up because landlords think they can get away with it and, of course, because fecking letting agents compete for the business by telling landlords 'we can get you £100 a month more than you're getting now and give you a rent guarantee' etc.

    If that were true, rents would have come down as landlords's mortgages came down, dramatically, when IRs were slashed as base rate fell to 0.5%.

    I've seen it happen loads of times - when a tenant leaves the landlord tried to jack the rent up. Property stays empty for a month - rent comes down - or offer is taken. Same thing.

    Rents, compared with the price of property - in some parts fo the country - are insanely high.

    And, of course, the lack of FTBs in the market means there are plenty of renters. That pushes rents up - not landlords' mortgage rates.

  10. £1000 a month for a 4 bed detached in 2003

    £1100 a month for a bigger 4 bed detached in 2005

    £1150 for that same 4 bed detached now - rent went up £50 a couple of years ago

    House prices during this period - where I live - have been basically static. Down a bit 2003-5, up in 2006-7, down in 2008, back up 2009, back down a bit now.

    The house I am in now is cheap compared to others (the one I'm in is pretty scruffy) - similar properties are £1400 - £1600.

    Rents are cheaper now than they were in the late 90s. In the dot com madness, the house I rented for £1000 in 2003 had previously rented for £1700 prior to the tech bubble bursting. £2k a month was common then for decent 4 bed detacheds.

    But, of course, interest rates were higher then.

    Low interest rates and high rents are holding the market up now.

  11. That's true, but I can get a mortgage, but I'm not sure whether I want one! :blink:

    I'm hoping I get the timing right! :huh:

    If you are at the front end of your life - waiting to get a mortgage for the first time - and you can afford the mortgage - why wait? 25 years is a long time and all this will be a distant memory when you pay your mortgage off.

    Alternatively, you could give some barstaard landlord 10k a year for the next 5 years while you wait for the right moment. Maybe if you do that you'll pay much higher interest over the term? Who knows? No-one.

  12. I think that there is some confusion over these figures. The critical figure for home sales and hence for home pricing is the gross lending not the net lending.

    To illustrate

    Scenario A

    Lending for new mortgages GBP1,000M

    Redemptions and repayments of existing mortgages GBP900M

    Net lending GBP100M

    Scenario B

    Lending for new mortgages GBP1,000M

    Redemptions and repayments of existing mortgages GBP500M

    Net lending GBP500M

    Note in both scenarios the value of new mortgages is GBP1,000M.

    No point coming here and talking common sense.

    As someone else said ... £112 million divided by 45,000 mortgages means each mortgage is 2 and a half grand and it is now 1962.

  13. That's just wishful thinking on your part. No it's not, it's a simple fact. Markets don't have to be liquid in order to fall. Yes they do. Name one market where it takes an average of 12 weeks for a transaction to take place where the prices go and down like a yo-yo. The best example of this is what happened in 1988 when the flagged joint mortgage tax relief was removed. The housing market simple stopped. Just ground to a halt for months. Prices crept down gradually over 18 months to 2 years.. House prices are set at the margins. Absolutely and the only people buying can afford current prices - setting the price, as you say, at the margins. There are, and will be a lot more, forced sellers. Not much sign at the moment of forced sellers. The Sibley's of this world will just remain in denial, "I'm not selling it for less than it's worth!" :lol:Yes, ha ha. Many people take that view and don't have to sell - again helping to price the market. They might not sell, but if 10 similar detached houses are all on the market for 400k, you can bet the one that sells in a falling market will only go for a little below the 'general' asking price.

    I agree that the graph will not look as dramatic as the picture (actually it might in a lot of poorer areas), but it's still going down and you'd better get used to it. I want prices to go down. I've wanted prices to go down for 7 years. It's just that I am now facing the inevitable and realising they won't go down much.

  14. Edwin Stargazer, chief property economist at Crapital Economics, said: “I've been predicting a property crash now for 7 years or more. Still, as everyone knows, a stopped clock is right twice a day and, sooner or later, by the law of averages, I will be right. Meanwhile, I'll stick my economist's hat on and interpret the figures for lesser mortals. Mortgage approvals are down, housing market transactions are down, house prices have fallen a bit .... I PREDICT they'll fall some more. That's why I'm an economist."

  15. No answers. Just an observation. All the projections and opinions in that blog can be knocked sideways by how people feel about the future.

    I've noticed in past recessions that the fear stage lasts about a year. After that people get fed up with worrying and just carry on as normal. I think that's pretty much what is happening now.

    I'm not any more worried about losing work than I was before the Spending Review. I've got used to the idea that there is no point worrying about the future, you might as well just get on with the present.

    In terms of staying sane, and maintaining a balanced view of life and the world, this site is not a healthy place to hang around. Compulsive though.

  16. you are a wilfully stupid person, the trough before the current boom was not 1991

    No way did Manchester and Birmingham see rises in the early 90s. It was done and dusted by then.

    How can someone be wilfully stupid? It is a very ignorant thing to do to call someone stupid - and shows how bereft of merit your argument is.

    Are you being wilfully clever? Are you?

  17. so approvals to actual mortgages taken out must be an appalling percentage right now?

    i.e. there is more lending than actual demand?

    "Mortgage lending dived to less than a 10th of the level seen during the previous month in September as activity in the housing market remained subdued, figures show.Net lending, which strips out redemptions and repayments, totalled just £112 million during the month, down from £1.62 billion in August, according to the Bank of England.

    Lending levels are unlikely to pick up going forward, with the number of mortgages approved for house purchase falling for the fifth consecutive month to 47,474 - the lowest level since February, which is traditionally a quiet month for the housing market."

    It doesn't say how much was lent last month, merely that the difference between what was lent and what was repaid was low at £112 million.

  18. that's b0llocks, people in the regions were still paying high prices in 1991 before being burned in the lag

    No, it's not b0ll0cks. Take it from someone who was there. I put a property on the market at exactly the same time that the joint mortgage tax relief was removed in 1988. Two years later we sold for 30% below the first (aspirational) price. We bought back in in 1991 and the property I bought then for 100k had previously sold in 1987 for £154k.

    The crash was over by 1991 and, last time, the boom and crash was very much a feature of London and the Home Counties. The explosion in prices in Wales and the Midlands and North didn't happen because BTL was not around to any great degree then.

    You, mate, believe what you want to believe. Which is why you are wrong.

  19. That program is made up.

    If you are taking your property market steer from Homes under the ******ing Hammer, then I don't think there's any hope for you.

    Really? They're mock auctions are they? And actors playing the part of the people who buy!

    The level of denial here gets better and better. :rolleyes:

    If you take your property market steer from some of the stuff you read here ....

    I am not an estate agent, I don't spend my life going in and out of estate agents taking the pulse of the market, interwiewing buyers, sellers, lenders etc.

    Nor, I bet, do you. You form your opinions from the information available to you. And a reality TV show is part of that information.

  20. people in their late 40s and 50s are boomers

    but you are too stupid to understand the simple definition of people born between 1946 and up to about 1970, which makes people in their 40s boomers b y the UK definition

    like I say the thing which annoys me more than anything else is how wilfully stupid you are

    The last resort of anyone who can't make an argument is to call the other person stupid. Personally, I think you are wrong but I wouldn't be rude enough to call you stupid because I think you have failed to interpret the world around you correctly. As I say, I think you're wrong, but it doesn't annoy me.

    You were trying to stereotype BTL landords as boomers. I was merely pointing out that most of them are not. Definitions of baby boomer vary - my interpretation of it is the babies born in the post war baby boom. This didn't extend to 1970. Many baby boomers were in their 20s by then.

    You may well be able to dig up some sort of definition but, as far as I know, there is no law on the matter. I think most of us that are baby boomers would regard the limits as 1945 to 1960. I don't see many people in their 50s on the property porn shows building portfolios.

    Woman I had a meeting with in a bank recently told me she had 6 BTL properties - I'd guess she was in her mid 40s. Not my idea of a boomer. Almost too young to have been a property owner in the last crash. Maybe that's the dividing line. Anyone who was old enough to own property in the last crash may be a lot more careful about regarding property as an investment that people who have bought in for the first time since.

  21. So we agree volumes have collapsed big style? The second part of your argument only helps most sellers when most people have loads of money and want houses, there is no money, and I think the "want" part will soon start to wane? One person who is stupid/a money launderer/or just can buy whatever they want buying overpriced property doesn`t help the other wanna - be sellers?

    You're right, it doesn't affect most sellers. Yes volumes have collapsed - not quite as much as people think, but a lot. But you need to get your head around how the housing market actually functions. Nice properties in nice areas will be sold to those earning the most money - this sets prices - and the rest of the market prices accordingly.

    And, bloody 'investors' are still buying up anything a bit scruffy, tarting it up and renting it out at high rents. Just a few days ago on Homes Under the Hammer two young lads (both less than 30 - NOT baby boomers) bought a non standard construction 3 bed semi somewhere in the North for 36k at auction. They spent 2 grand on it (where do they get their kitchens and bathrooms from?) and the agents valued it at 50k to 60k (it is not mortgageable) and said they'd get £550 to £575 a month in rent.

    Camera back to two young lads 'yes that's about right because we've got a tenant already and they are paying £575 a month!'

    Yesterday (I think) house split into two poxy flats - basement flat and upstairs flat - £1000 to £1200 a month in rent each!

    When rents come down, prices will come down.

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