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Posts posted by ReggiePerrin

  1. Perhaps they're printing old news in an attempt to keep the market afloat?

    Apparently as I have nothing better to do I had a look at rightmove & properties in Chelsea and there are a ton of properties up for sale. I was under the impression that houses/flats/sheds were being sold as fast they came to market... there are even properties that have been on the market since the summer of 2013 which are priced lower than in 2007 (Going by the Zoopla stats)

    Perhaps I'm wrong and Chelsea isn't in London? And are we absolutely certain that house prices have taken off again? I mean it's not just the MSM fooling people into believing the property market is red-hot again?

  2. Good explanation by the OP on the disadvantages of taking the lot out in one hit to invest in BTL (although I think going by the past decade most of the population is mad enough to do it)

    Given the number of references made by the politicians on Budget day to 'paying off the mortgage' I think this is all about trying to defuse the IO timebomb (this has probably been discussed to death here.. my apologies if it has). So if you add the tax lost taking your pension out onto the interest paid over the years on an IO mortgage you'd have lost a small fortune on your 'investment' in a house

  3. Levered investments are geared on the way up...and the way down...and if you've been on a bike you will know how much easier it peddling down hill in a high gear. :lol

    and that's what amazes me the most about this property crazed country, people don't understand the negative side of gearing and the media never explains it. You quite often read articles that compare BTL returns with the return on cash savings, but they're nothing like each other from a risk perspective.

    So I wonder how many of these financial wizards/BTL landlords haven't got a clue how potentially dangerous their investments can be to their wealth, until it's too late of course? They certainly understand the upside, but no clue on the downside... we live in interesting times.

    [Afterthought:- a lot of people don't know what an Interest Only Mortgage is, so the pro's/con's of leverage would be impossible for them to understand]

  4. IMO he is stopping thousands of people from voting labour, a liability....... As all the parties are much of a muchness......can't we pick the best people from them all and create a good, honest, creditable and ethical party. ;)

    using your criteria I think you'll struggle to get enough MPs to form a 5 a side team, let alone enough to run the Country

  5. The relevant article from the BoE's Q4 2013 Quarterly Bulletin:

    The financial position of British households: evidence from the 2013 NMG Consulting survey

    Those people are not on the same planet as the rest of us.. one example

    Nominal household disposable income has grown by around 3% a year over the past three years (a cumulative rise of about 10%) and there

    may be some increase in that rate of growth if the economy continues to recover

    Some of their statements give the impression that they're hoping for wage inflation to kick in to sort out the mess (there is no mention of how people would cope if wages dropped, only the impact of varying degrees of wage increases are discussed)

  6. The only thing that surprises me is there isn't more of these stories in the press. I was watching 'home here or in the 3rd world' (or something like that) and they talk of 30%. 40%, etc price falls from peak in places like Spain and now is a good time to invest etc etc.

    But what about all the people who bought at peak, where are their stories? Given people like to complain like mad about being mis-sold anything and everything they're being very quite.

  7. This lack of supply is one of the most noticeable aspects of the post-crunch UK housing market and therefore poses the biggest question. Why has there been such a marked lack of supply? They keep reporting it but very few speculate on why it is happening:


    1. Lowering real wages creating mortgage repayment difficulties creating forced sellers


    1. (Recently) expectation of future HPI gains delaying potential sellers
    2. Valuations being in negative equity territory locking people into current location
    3. Banks not repossessing non performing mortgages (to avoid crystallization of loss on their books)
    4. BTL culture spreading into 'inherit to let' on deceased parent's homes?
    5. Low wages and savings preventing potential second steppers moving up
    6. Low new build numbers
    7. Poor jobs market meaning less relocation churn in sell to buy

    Any others?

    Clearly the supply constricting factors are dominating.

    I'll have a go at another one..

    An increase in the avg age of the FTB; If you bought in your early 20's you're just starting your career, hence there's scope for further wage increases as you progress, combine that with some increase in the value of the house and you can afford to move up the ladder. If you're a first time buyer in your thirties on or near peak earnings and you have to stretch yourself financially to get on the ladder, you ain't going nowhere fast. So supply is constrained by 30 something FTB'ers stuck in a one bed rabbit hutches.

    On the same theme; propaganda states that you must 'own' a house before you can have children, buy at thirty and you're going to have [expensive] kids a lot sooner than someone who buys in their twenties...

  8. So what happens if you negligently cause structural damage - by burning the place down as in the mumsnet tale of woe, by leaving the taps on whilst holidaying etc?

    The LL in the OP has taken on no more risk than Bloo Loo (and I suspect most renters) by being underinsured (unless Bloo Loo - unlike the mumsnet LL - has a sufficient wedge to shrug off a bill for a rebuild).

    Assuming the LL had insurance and there was a get out clause for negligence then the renters insurance would contain the same clause, therefore the renter would be liable to pay for the damage out of their own pocket. But then again what's the difference between an accident and negligence?

    I think the issue is whether the damage was deliberate or not. Did the renter deliberately burn down the house with a candle or simply fell asleep with a lit candle on the go (using your example; did Bloo Loo forget to turn the taps off or did he leave them on deliberately to flood the house?)

    By the sounds of it the original renter had an accident, they didn't burn the house down deliberately, and if an insurer can use negligence to get out of paying we're all buggered, e.g. car insurance would be useless (how many accidents can be classified as being caused by negligence?.. most of them)

  9. I didn't read too much of the linked article (the author appears to be the last person you'd want to invite to a Christmas party; a miserable sod like me), but raiding savings to pay for stuff is good, because why bother saving if you're not going to ever spend it.

    So debt on credit cards for stuff = bad;

    saving for stuff (and I don't mean the gas bill :) ) = good

    I think the author of the article doesn't understand what savings are for?

  10. It might be correct that if the tenant caused damage to the property and neighbouring properties through negligence, then they are liable. It would take a real hot-shot lawyer acting for the neighbour to get that to stick, though.

    In practice, that is why the neighbour has buildings insurance. Fires, floods, burst pipes, etc. happen all the time, and not necessarily through negligence. In general, unless there is overwhelming evidence of deliberate damage (e.g. arson) or gross negligence, the insurers will just deal with it as an insured loss, each insured party claiming for their own loss.

    Similarly, the LL may have a claim against the tenant for the damage to their property, if the tenant was provably negligent (e.g. by the use of unsupervised candles, particularly if the tenancy agreement prohibited the use of naked flames). In practice, in the absence of overwhelming evidence of negligence or deliberate fire setting, such a claim will go nowhere, and anyway, the tenant is unlikely to be able to pay. The whole purpose buildings insurance is to protect against this risk.

    No naked flames?? Does this mean you can't have a gas cooker in a rental, or a pilot light in the boiler, put a candle on a Birthday cake, etc? The idiot Landlord had no insurance, that's the real problem

  11. This is the very meaning of a catastrophe; a fiasco, a complete disaster

    I hope the tenant recovers, yes the candle was a mistake, but then again it wasn't so long ago that someone successfully set fire to themselves decanting petrol from one continer to another in the Kitchen, with the gas oven turned on, so a candle isn't a biggie and they had enough sense to have contents insurance

    On the other hand the landlord is a moron.. not an amateur moron but a grade A professional moron. The term 'amateur landlord' should be banned.

  12. So from about 2002/03 there's been hardly any growth in wages during a huge boom! There clearly was a structural problem in the UK way before the banking system started to creek.

    Growth figures down to immigration?

    Nope, the real reason was cheap credit, mewing, etc. We spent on the never-never until never came and kicked us in the soft parts, and looking at the latest lending figures, we learnt bugger all from the experience.

  13. This could level the playing field a bit.

    No stamp duty on a residential property

    Stamp duty if it's used as a business, e.g. BTL. (Anyone taking out a BTL mortgage on a property that has a residential mortgage against it has to pay stamp duty again, e.g. let to buy)

    The obvious argument is people will lie about their intended use of the property - So Banks/insurers must be required to inform HMRC of every BTL mortgage/building insurance application

    Cash buyers are a bit of a problem.. although it's nothing an anonymous helpline won't cure :)

  14. Congrats! I know the feeling of dread at the prospects of uncertainty when the stakes are raised.

    But, schools are not to be worried about for the timebeing surely (unless your offspring are brighter than most..) and don;t forget 5 years is easily enough time for good schools to go bad and bad schools to be turned around- planning too far ahead for this one might be a difficult unless you have a age-old consistent top performer in mind.

    You ought to be able to get a 1 year AST to cover getting turfed while expecting. You could try a longer deal too, we offered one and it was accepted despite severe scepticism from the letting agent.

    Master B.L.T. is now a couple of weeks old and settling into his rented accommodation nicely. Although he can't talk, the occassional flicker of an expression across his face is clearly imo him expressing a satisfaction at having found himself in a decent house without having the burden of maintenance obligations and the risk of capital depreciation in the medium term. It's so cute when they do that.

    Congrats on the new arrival, and good luck with catching up on the sleep; Me and Mrs Perrin (mainly Mrs Perrin tbh) have successfully raised two Perrins in rented accommodation over the past 13years with no problems, quite the opposite, as the new Boiler we had fitted would have crippled us when we were struggling the most to keep with the expensive of the first Perrin. Then when Perrin number two arrived we were able to rent somewhere larger for a fraction more rent.

    Tip:- Buy shares in a company that makes Nappies.

  15. This kind of repo is by LPA receiver, so it doesn't show up in the figures for court possession orders.

    Plus I imagine at this stage many OO borrowers who were in forbearance since 2008 and couldn't maintain the pace have quietly given back the keys. All the lenders developed processes to make this easier after the crash.

    In sum - the figures from the repo courts don't tell the full story. It may be that there's a wave of BTL repos as we speak.

    Another factor is that the receiver has to honour any existing BTL tenancy, so that can add months to the process. (One mistake tenants make in that situation is applying to court under the Protection of Tenancy Act - the judge assumes the tenancy is not BTL, so the tenants fail to extract the full period of their tenancy.)

    Thanks for that, I'm learning a lot today; I've never heard of a 'LPA Reciever', thankfully ... Found this on t'Internet for others like me.

    What are LPA Receivers?

    Law of Property Act Receivers act for banks and private lenders who have secured their loans by a Legal Charge (mortgage) on a property. Under the terms of the Legal Charge the lender can appoint a Receiver to deal with a property when the terms of the mortgage are not being met – usually when repayments and interest are not being paid.

    Why are LPA Receivers needed?

    Lenders can face a number of circumstances in which they do not have the capacity, legal or physical, to deal with properties. Lenders may not wish to expose themselves to the liabilities that attend a corporate body taking possession of a property directly. LPA Receivers are experts who can manage the property, deal directly with occupants, outstanding problems, insurance and repairs. Receivers collect in money to repay the debt, from rents or by selling the property.

    What happens in an LPA Receivership?

    The role of the LPA Receiver is to focus on recovering the debt owed to the lender. This involves taking control of the property and, effectively, standing in the shoes of the owner. In most cases the task is then to arrange an early sale of the property in order to repay as much of the loan as possible.Lenders review each circumstance, or commission a report on the appropriateness of Receivership. This may highlight issues not previously known to lenders which may effect how a property can be dealt with. Details of planning permissions and other licensing should be examined at this stage if at all possible. Factual occupancy arrangements are checked and, very often, the borrower is asked to contribute, to see if there is a way that the loan can be repaid without further formal action.Once appointed, the LPA Receiver takes over the role of the owner and the owner may not deal with the property in any way. The Receiver has full discretion as to how to deal with the property. If obtaining planning permission or some other action can improve the realisable value, the Receiver may decide to pursue the opportunity but is not obliged to do so.

  16. I don't think they were certain hence the constant ramping over the last few months ,IMO if the demand is not there at the right price levels it could backfire in a big way ,but they do have the luxury of being able to balance the supply with the demand

    That was a typo on my part: I meant to write 'It might also explain why the Government is so certain HTB isn't going to push up prices to bubble levels.' :)

  17. I'm probably putting 2 and 2 together and coming up with 10.

    HTB2 was announced back in March and launched early, for what looked like Political point scoring, but shortly after the launch ME starts getting serious about decimating the bad debts left over from the B&B and northern rock collapses (I hadn't heard of this until today).

    So is HTB2 primarily designed to stoke up demand to absorb the ME disposals and prevent a HPC; and the sudden urgency to offload these loans now, before house prices are pushed up, is because the IO timebomb is due to blow up in a few years, so there's no time to wait, i.e. the market in a few years time can't possibly absorb all the pent up problems without imploding?

    Looks like the Banks/Government know that they about 4-5yrs to get rid of their bad loans, so is this the tip of the repossession Iceberg, cunningly hidden by HTB? If so things might get interesting.

    edit:- It might also explain why the Government is so certain HTB isn't going to push up prices to bubble levels.

  18. How on earth can you ever hope to clear 260K worth of debt!? Presumably, they are adding interest to it also.

    So they had tenants, were paying the mortgage but still ME repoed, sold the houses and then sent them a huge bill?

    I guess the same as Koala just replied to someone else.. repo. ME don't seem to be the sort of organisation that will just walk away from a 260K debt. Give it a few months and they'll be posting that they're being taken to court for the shortfall

    I wonder how long before other BTL lenders start checking whether any of their clients have a connection to ME? Strikes me this could be the trigger for a lot of BTL'ers finding themselves with some very serious financial problems... If I was lender I'd want to be first in the queue to get my money back before ME goes to work.

    You have to feel for anyone who takes up a H2B mortgage and gets into financial trouble... they're going to be taken to the cleaners.

  19. The author seems to think that if LLs can hang on in there that they will get offered a sizeable write-off of their mortgage debt by ME just to get them off the books.

    That's appears to be a high risk strategy, one missed payment and MX goes to work.. it bit like prodding a bear trap with a stick; great fun until it takes your arm off (I know it's a pathetic analogy)

    I have to say the same thing has happend to us on two properties with Mortgage Express, we recieved the letter to say our properties had been sold. they took an £8,000 payment one day and then sent us the letters to say we owed them another £130,000 per property as this was the short fall.

    we had been sold a mortgage for 220,000 on two properties. and they sold the houses for £80,000 approx and sent the bill. we signed nothing , the place had tennants and we had cleared arrears. they seemed to just make that decision over a a few weeks, we spoke to them often ( very often ) they called nearly every day, we felt being in touch was good as we could explain that a payment was going to them at a certain day , we made this payment and then as i say got the letter to say . . .er we now owed them £260,000.00.

    This is on a linked article on Pottery 118 , or something like that ...

    Potty 118 site

    It appears that BTL is a little bit more risky than saving cash in an ISA... strange, this doesn't get mentioned on the mainstream media.

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