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JonoP

Shall I Sell It Or Rent It........?

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To kill time during a rather slow (and hungover) day at the office, I spent some time looking at the houses that have recently come on to the market in the charming Berkshire town that I call home. Specifically, I have been looking at houses that have been listed on Globrix in the last 36 hours.

The thing that shocked me the most is the ratio between houses for sale versus houses for rent. There are 48 additional houses that are listed as being for sale versus 133 additional houses listed for rent. I do not have exact figures for what the sale/rent ratio looked like at the height of the boom, but my guesstimate is that 2 houses were listed for sale for each house that was listed as being available to rent. That ratio has now swung 3:1 in the opposite direction.

I do not think the media have picked up on this yet. The point was briefly touched upon by Sarah Beeny in tonight’s classic TV show, but not in any level of detail.

The point is, there is a huge wall of pent up supply out there and it is growing exponentially bigger on a daily basis. This must pose a HUGE risk to the UK banking system – all of these people paying two mortgages ‘hoping they will get a tenant for their old house’. But there HAS to be far more supply than demand, so they probably will not get a tenant, or if they do, their tenant will lose their job..... and in a few months IRs will go up.....

The other thing that I am wondering is whether this is a deliberate ploy by the banks – rather than selling repossessions they are leasing them out......?

Either way, I increasingly think that the trigger for all of this to explode will be IRs increasing. Not sure when that will happen, but I fear for our banks when it does.....

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Yes, I reckon too that there is a lot of pent up supply out there. We saw just two anecdotal examples on the Beeny Show. And there's plenty more from the good folk of HPC bragging about getting excellent rental deals from reluctant landlords.

The recent uptick in the property market will bring a fair few frustrated sellers from the last year or two back into the market.

Plus there'll be people who want to upsize. Whilst prices were falling they were happy to see the differential between their house and their target new home shrinking. Now, perhaps they'll be thinking now's the time to make the move and put their house on the market.

I'll be watching the inventory levels in my home town with particular interest over the coming few weeks.

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Yes, I reckon too that there is a lot of pent up supply out there. We saw just two anecdotal examples on the Beeny Show. And there's plenty more from the good folk of HPC bragging about getting excellent rental deals from reluctant landlords.

The recent uptick in the property market will bring a fair few frustrated sellers from the last year or two back into the market.

Plus there'll be people who want to upsize. Whilst prices were falling they were happy to see the differential between their house and their target new home shrinking. Now, perhaps they'll be thinking now's the time to make the move and put their house on the market.

I'll be watching the inventory levels in my home town with particular interest over the coming few weeks.

Yeah, it would be good to get some historic inventory data that provides figures on the total stock on the market at a given point in time and the percentage of that stock that is for sale vs for rent. My suspicion is that the total stock available (by which I mean the total number of houses for sale or for rent) has not changed much but that the ratio of rental vs sales has. As I see it, one of two things could be happening:

  1. People are buying new houses and are not able to sell their old houses. Thus the stock for sale goes down but the stock for rent rises.

  2. People are renting their current house out and moving to a new rented house. This is a zero sum game in terms of impact.

My suspicion is that there is lots of option 1 going on. So the supply of rental properties coming on the market is rising far faster than the number of new tenants. Wonder what will happen next....?

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Quantitative shitting has got cash holders shitting themselves and rushing in to buy property to either live in or mainly rent out to try and get some yield from their money.

It is going to take a few months for all this type of purchase made in the last 6 months or so to reach the rental market - remedial work, lick of paint, certs etc all in place before the ad gets in the paper. When renting people are more likely to double up to reduce outgoings, others leave their place and move back home. I think we'll see such a huge disconnect between supply and demand in the rental market that it will crack big time, that will then precipitate the next lurch down in HPI.

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Quantitative shitting has got cash holders shitting themselves and rushing in to buy property to either live in or mainly rent out to try and get some yield from their money.

It is going to take a few months for all this type of purchase made in the last 6 months or so to reach the rental market - remedial work, lick of paint, certs etc all in place before the ad gets in the paper. When renting people are more likely to double up to reduce outgoings, others leave their place and move back home. I think we'll see such a huge disconnect between supply and demand in the rental market that it will crack big time, that will then precipitate the next lurch down in HPI.

Heh heh, good point about the time it takes to get a new rental on the market. I just love the laws of unintended consequence. How ironic is it that Brown’s ‘genius’ policy to help home owners (which is basically what QE is) actually looks like it is creating a huge imbalance in the market which will further amplify the downturn.........

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And interestingly, a BBC report says this morning that there have been 4100 BTL repossessions in the first three months of the year, but only 1700 were then 'sold on'

The rest have basically been kept as rental properties by the banks 'until the market improves' It would appear that banks feel they can make a profit from the same tenants that the original BTL owner failed with.

Yet more pent up supply.

It will be interesting to see what happens to the houses the banks hang on to. If prices fall further, will they face the risk of being sued by the original mortgage holder as they did not achieve the best possible price for the house after they repossessed?

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To kill time during a rather slow (and hungover) day at the office, I spent some time looking at the houses that have recently come on to the market in the charming Berkshire town that I call home. Specifically, I have been looking at houses that have been listed on Globrix in the last 36 hours.

The thing that shocked me the most is the ratio between houses for sale versus houses for rent. There are 48 additional houses that are listed as being for sale versus 133 additional houses listed for rent. I do not have exact figures for what the sale/rent ratio looked like at the height of the boom, but my guesstimate is that 2 houses were listed for sale for each house that was listed as being available to rent. That ratio has now swung 3:1 in the opposite direction.

I do not think the media have picked up on this yet. The point was briefly touched upon by Sarah Beeny in tonight’s classic TV show, but not in any level of detail.

The point is, there is a huge wall of pent up supply out there and it is growing exponentially bigger on a daily basis. This must pose a HUGE risk to the UK banking system – all of these people paying two mortgages ‘hoping they will get a tenant for their old house’. But there HAS to be far more supply than demand, so they probably will not get a tenant, or if they do, their tenant will lose their job..... and in a few months IRs will go up.....

The other thing that I am wondering is whether this is a deliberate ploy by the banks – rather than selling repossessions they are leasing them out......?

Either way, I increasingly think that the trigger for all of this to explode will be IRs increasing. Not sure when that will happen, but I fear for our banks when it does.....

For complicated domestic reasons, I am considering moving so am looking for similar (3-bed semi) properties to my current one. The last 2 evening I've walked a different circuit of my residential area where I'm interested in buying just to see what's around, rather than just perusing Rightmove. Monday night I saw 19 EA boards on my walk - 17 'to let' and just 2 for sale. Last night on a slightly more 'pricey' circuit I saw 7 boards, again just 2 for sale. I was absolutely gobsmacked.

Of course this is a small sample in one part of one town, but it's absolutely clear that many people are either unable or unwilling to sell into the present market. I can't tell which it is, but whereas previously I was scoffing at EAs saying they were short of decent properties to sell (the usual EA leaflets through the door), now I'm in the reluctant position of pondering a move myself, I'm seeing the evidence for myself.

From what I can see, my 'area' house price is down around 20-25% from peak, which I guess is around average...

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For complicated domestic reasons, I am considering moving so am looking for similar (3-bed semi) properties to my current one. The last 2 evening I've walked a different circuit of my residential area where I'm interested in buying just to see what's around, rather than just perusing Rightmove. Monday night I saw 19 EA boards on my walk - 17 'to let' and just 2 for sale. Last night on a slightly more 'pricey' circuit I saw 7 boards, again just 2 for sale. I was absolutely gobsmacked.

Of course this is a small sample in one part of one town, but it's absolutely clear that many people are either unable or unwilling to sell into the present market. I can't tell which it is, but whereas previously I was scoffing at EAs saying they were short of decent properties to sell (the usual EA leaflets through the door), now I'm in the reluctant position of pondering a move myself, I'm seeing the evidence for myself.

From what I can see, my 'area' house price is down around 20-25% from peak, which I guess is around average...

I have an idea.

Why don't you sell your house and move into one of the plentiful rentals in your target area?

Then, if you like it and the neighbours are pleasant enough, you could offer to buy it from the landlord.

And with luck and following wind, your offer in 6months or a years time will be below today's prices.

I'd like to call it "Try before you buy".

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I have an idea.

Why don't you sell your house and move into one of the plentiful rentals in your target area?

Then, if you like it and the neighbours are pleasant enough, you could offer to buy it from the landlord.

And with luck and following wind, your offer in 6months or a years time will be below today's prices.

I'd like to call it "Try before you buy".

That's not an altogether bad idea - esp. since the reason I'm looking is that some festering BTL-kunt has purchased my attached-neighbours house, is wrecking it internally (with enormous noise and disruption), and will apparently be "putting 5 students in". Misery.

Short of cutting the BTLers brake-pipes, which would be justified, selling up and renting is an option I suppose. What price would I get though, with any potential buyer almost certainly noticing the 'noise problem' they're moving into. Anyone else had similiar situation happen to them or can suggest any tactics ?

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