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I thought I'd share the unfolding problems my family are currently having with property. I won't say too much about the locations in case they are reading. I don't want anyone to get the impression I'm happy about their problems as I'm certainly not. But things seem to be gradually deteriorating as far as the property market is concerned:

1) My mothers partner has had his house on the market since the beginning of the year. He hasn't had one single viewing. The EA has apparently told them it's not overpriced. I've given them all my best wishes etc and I doubt they want to hear anything from me about the state of the market. So I've avoided giving any advice other than suggesting they should go back and discuss it with their EA.

2) A cousin has a BTL which he bought in summer 2004. It's been rented since then but apparently he has been trying to sell it for about 4 months with no interest at all. It's a new build in SW London where there are loads of similar properties. He doesn't give a reason for wanting to sell it but it seems plain to me that he can't be making a profit (I took a look at something nearby earlier in the year and decided there's no way I could get enough rent to cover the mortgage).

3) A brother-in-law has a very similar new build. Again SW London bought last year. He's been trying to sell it. for several months too with absolutely no interest. Unfortunately he's not had a tenant for the last two months. Again knowing what he's bought the mortgage will be a lot more than the flat he's living in (so it seems reasonable to assume the monthly mortgage is hurting him with no tenant). As he has already had to borrow from friends to cover the mortgage in the past I'm a little worried that he may ask us to help out. The family know we STR'd so they know we have spare cash and have, for non-property reasons, been asked to lend money in the past (which we declined!) Obviously being family we would consider it if he is in trouble. But it would be ironic that we would be the ones to suffer in this market despite having seen it coming and got the hell out of it.

As I said, I'm not getting any pleasure over any of this but that's three properties in my family and NONE have had ANY interest since they went on the market.

EDIT: Excuse the typos I'm a little drunk :)

Edited by Portent

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Obviously being family we would consider it if he is in trouble. But it would be ironic that we would be the ones to suffer in this market despite having seen it coming and got the hell out of it.

Family or not, he took a risk and I doubt he would share any profits if he had made any. Why should you be bearing his losses? Don't bail him out!

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Family or not, he took a risk and I doubt he would share any profits if he had made any.  Why should you be bearing his losses? Don't bail him out!

I do agree. But if the worst came to the worst (which hopefully it won't) and if he did ask (which hopefully he won't!) then it's harder done than said. But in all honestly I doubt I'd agree to it. I have a daughter now and have to put her first over any other family member.

Neither of the BTLers are greedy people. They are just trying to do better by themselves and have been caught up in the TV property developer mania. When I was their age I didn't even have the get-up-and-go to even try. So all credit to them for doing so.

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I do agree. But if the worst came to the worst (which hopefully it won't) and if he did ask (which hopefully he won't!) then it's harder done than said. But in all honestly I doubt I'd agree to it. I have a daughter now and have to put her first over any other family member.

Neither of the BTLers are greedy people. They are just trying to do better by themselves and have been caught up in the TV property developer mania. When I was their age I didn't even have the get-up-and-go to even try. So all credit to them for doing so.

This is very difficult, and the best solution is to avoid it! With regards to your STR cash, can't you say its in bonds or something??

Also, if the BTL relatives ask for help, would you want to look over their P & L for their properties? After all BTL is a business, and like cgnao says would they share profits with you (if they had any)?

I'm was in the same boat (not quite as much) with my family. My Dad just got a new job the other side of the country, and he is under pressure from his company to buy (to show commitment), but is currently living rent free in the company's apartment. My Mum plans to move next summer.

But the free-rent thing was only to get him to come to the company, so he'll have move out soon. Anyway, I have talked them out of getting a detached due to the falls, and were thinking about a cheaper semi (circa 130k). And although they could afford it to half in value there's no reason why they should. So, now I have talked them into renting which is cheaper than an IO mortgage.

I suppose the problem is now solved, but it doesn't help when my sister (who bought 2 years ago) hears me say this.

Oh, and my Dad keeps saying it always go up in the long run (yes Dad, we're all dead in the long run too), and it will be higher in 5 years time - I have my work to do on this!!!

Edited by Jason

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Portent, the similarities are scary, but I won't say anymore. We don't know what to do if we are asked, but we feel like you. Why should we? We put money on black, they on red, why should we pay the debt if black comes in? :angry:

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The family know we STR'd so they know we have spare cash and have, for non-property reasons, been asked to lend money in the past (which we declined!) Obviously being family we would consider it if he is in trouble.

Yep, been there. My wife is in a large family and she is the only one without kids.

The assumption has always been that she has money and now there's an awareness that there's cash in the bank from the house sale....

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dont lend out your STR funds to help out someone elses property speculation.

that STR fund represents your future home. you wouldnt drag off a quarter of your house in bricks to lend for a relatives 2nd house.

its one thing if their debt was caused by accident or bad luck. you could consider those circumstances. but this is simply bad debt because your relatives have tried to profiteeer from the hoiusing market and failed. would they have shared the rental incomes ?

do you think its fair that their speculation investments are to be subsidised by your future housing fund and personal savings ? sorry, but they will have to take a loss. they will survive - but they will have to take a loss.

plus. you would never get your money back.

houses are going one way only for the next ten years.

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2)  A cousin has a BTL which he bought in summer 2004. It's been rented since then but apparently he has been trying to sell it for about 4 months with no interest at all. It's a new build in SW London where there are loads of similar properties. He doesn't give a reason for wanting to sell it but it seems plain to me that he can't be making a profit (I took a look at something nearby earlier in the year and decided there's no way I could get enough rent to cover the mortgage).

a cousin of mine is 24 and he works at McD as a manager he's probably on about 17,000.

he has a home with 90,000 interest only mortgage and a house he bought and rents out with an 80,000 mortgage - covers his mortgage payments only.

how in gods name did someone lend him that much money.

he now has his girlfriend in the family way so he to kick the lodger out of his main home and shes not working soon.

hes a little bit worried when i spoke to him

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I think there will be many who can relate to this story in one way or another and I agree with previous posters entirely.

"Dont' throw good money after bad."

"If your rellies need cash, that's what banks are for.

Harsh but true. "

These two statements (posted above) get my praise.

Short of a miracle, the last guy in your anecdote really sounds as if he's up sh!t creak. The property will eventually be sold at a crippling loss either by him or from under him by the bank.

If a bank won't roll further lending it says something very very clearly, that he is incapable of coming good on the loan. (and we know how lax they are at the moment)

His bank will take the loss on the chin - you simply cannot!

If you're anything like most of us, you have worked very hard for your money and, in the face of this outragous consumerist nightmare, treated it with value and respect.

Keep it safe.

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I think there will be many who can relate to this story in one way or another and I agree with previous posters entirely.

"Dont' throw good money after bad."

"If your rellies need cash, that's what banks are for.

Harsh but true. "

These two statements (posted above) get my praise.

Good advice. Furthermore if you are persuaded to bail out over-indebted relatives with your own savings don't expect to see it again certainly within the foreseeable future. Again, harsh but true.

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Aweful situation to be in. But as everyone else has said he tried to make money and failed. That is not your fault. The question I would ask myself is that if he had a gambling addiction would i bail him out. Personally no but what i would do is everything to help himself. I.E cut your losses and do everything to sell that house.

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if it were a bridging loan which u knew u were likely to get back then lending might be an option but let's face facts - he is going to sell at a loss - he is asking you to make up that loss - you won't get the money back because if he can't stump up however much he is short of then he isn't going to be able to repay a loan for that amount - harsh as this sounds, don't let sentiment get in the way

and a s others have said, if you give him your STR money, what are you going to buy with when the time comes?

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Investment is always at your own risk. This means to speculate you must be prepared to lose money as well. Many of the btl crowd do not accept this.

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Good advice. Furthermore if you are persuaded to bail out over-indebted relatives with your own savings don't expect to see it again certainly within the foreseeable future. Again, harsh but true.

Just to be clear I took those two statements from actual posts above my post.

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My brother has a non-profitable BTL which he bought in Dec 03. He's planning to emigrate to Florida this Autumn, but can't sell it at original price - 5%. He has asked me whether I'd like to buy it as he knows I have the cash.

My response was that I MIGHT buy it at 12 times the annual rental income, which would mean reducing it from 190k to 120k. He got annoyed and thought I was ripping him off, but I pointed out that that would be my required return on any property investment.

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Investment is always at your own risk. This means to speculate you must be prepared to lose money as well. Many of the btl crowd do not accept this.

I don't think that many of the btl crowd realise that they are speculating. If things do go wrong I fear that they will not take responsibility for their own actions; they will seek somebody to blame and in their eyes it will be the bank or some other outside factor which was the reason for their predicament.

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Portent's post makes for depressing and worrying reading. Which brings to mind my own family anectdote.

I have a sister who is a single mother of two kids, early thirties, and in full time employment. In January 2005 she bought a 3 bed maisonette (FTB) in Manor Park, East London for £180,00. Her salary was £30,000. She took out a self- cert loan for £160,000. It is interest only. She plans to start paying back the capital 'in 5 years or so'. Our dad 'lent' her £20,000 for the deposit . The property is a slum and requires in excess of £30K work on it (new kitchen and bathroom, whole place replastering, new central heating, new windows and carpets etc). I checked nethouse prices and it sold for 102K on 28/11/01. There's a cul-de -sac opposite the front door where junkies congregate occasionally at night.

I have 3 siblings and we have always been close. I discovered she bought the property only when she exchanged. She persuaded everyone not to tell me about her intentions and the purchase generally because I would 'only worry'. The truth is she knew I would oppose the sale vehemently (if for no other reason than to protect her children's interests) and that I would advise Dad not to jeopardise his dosh in this way. Dad says it's a home and her income will increase. He did not know she had taken out a self certified interest only loan of £160,000. She claims it's cheaper to buy then rent. She has not done her homework or there is an element of self deception going on.

So, I was greeted with a fait accompli, a conspiracy of silence by all my family,orchestrated by one of my siblings. I was so shocked when I learned of this I was speechless, unable to react. For a whole week I was stunned and could barely speak to anyone about anything. Thank goodness, because I had plenty of grounds to go to war and there was enough here to create a permanent schism within the family. Thankfully I read a thread on this forum where a poster had a similar problem and the unanimous advice was back off, say nothing and let people learn by their own mistakes. Such machinations can lead to permanent family rifts which in the long run damages everyone and achieves nothing. That sort of advice . I was grateful for that perspective and acted on it. It would have been so easy to pitch head long into battle. My God,it would have been bloody. There will be issues of course concerning the deposit and its status concerning inheritance purposes but I shall deal with that via my Dad.

What is clear is I will not bail her out. Under no circumstances. She is heading for financial disaster, that much is certain. The only saving grace is she is a whizzkid whose income may well double in the next 10 years. The crunch will come when she needs to move. 5 years I reckon, by which time the place will be worth barely 100K. Where is she going to get the 80K shortfall from? Not from me or from any family member. I am devastated by all of this, not least because I see the children's future jeopardised.

Sorry about the lengthy post. Portent set me off. Serious headrush. Wow!

Edited by Baz63

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Thanks for everyones advice. He hasn't had to ask for the money yet and hopefully he won't have to. But I've decided that in the unlikely event he does, that my answer would be no. I wish him all the best but my STR money stays where it is. I have my own family to consider and their future comes first.

Edited by Portent

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Guest Daddy Bear

I don't think that many of the btl crowd realise that they are speculating.

Simple solution to this problem. If everyone is convinced that the market is going down the pan and the whole family is absolutely fu**ed with mortgage debt up to their eyeballs and their is a crash on the way , tell them this....

"liquidate any other assets you have, approach loan companies - lombard direct give out loadsa money --yes still...-and take out the biggest loan they can 9great rates at present only 5-6%!!) I reckon 20k may be feasible to borrow.... and then short the property market (estate agents, buy to let companies and the high street lenders).

In 9-12 months time with such a high gearing investment I reckon they could realise 200K.

On the other hand if they don't think the market is going to crash - hold on to their properties for 2-3 years and sell at a huge profit.

Greed and fear....greed and fear... where is the balance now??...

no sympathy ...

Any other ideas how to get out of their predicament?

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  • 336 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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