Btl Meltdown

[88Crash]

I work in the housebuilding sector and deal with most of the major builders

I am NOT suggesting that I have 'inside information' but from what I see, the BTL 'problem' has been hidden/talked down (that's putting it mildly)

If BTL goes into meltdown IMO it will have an effect that the UK property market has NEVER expeienced before during previous HPC's

Meltdown may not happen - there is a lot of serious money/VI that will try to stop this event

Problem is - once/if meltdown starts - by the very definition of the word - it is very hard to stop!

FT article is one of the first I have seen on the 'dodgy' BTL

If the media start to report on the real extent of the billions that have inflated the property market, that is technically illegal, could get interesting

see old link on subject

http://www.housepricecrash.co.uk/forum/ind...wtopic=7226&hl=

[Dames]

I'm in 'the business' as well :0)

Have to say sentiment amongst the subbies has definately changed .Last year no-one would even consider the fact of a fall in prices , I'd go as far as to say I didnt find a single person to agree with me. This year almost totally reverse , most now see the signs.

Quite a few of the small sites I've visited ( 40 - 60 plots ) have almost all been exclusively bought up by BTL.

Dames

[right_freds_dead]

Quite a few of the small sites I've visited ( 40 - 60 plots ) have almost all been exclusively bought up by BTL.

<{POST_SNAPBACK}>

i hope so. these are the people that need to lose the most.

i have no sympathies for BTL. i feel for owner occupiers but not rental ticks.

also, im my area i noticed rents falling. i hadnt really seen this before. the local rents tried to rise as did the house prices. and they held for a while. maybe last 6 months. ive been looking this months and rents are down. and lots of em.

also prices are coming down. this week i saw a 2 bed terrace for ...... £69k !!!

but no btl has dared to 'snap this up'. 2 months ago a btl would have steamed into this. not anymore. they cant get a tenant.

this is without the need for an IR rise.

imagine if the MPC squeezed out another 1% over the next 4 months.?

crashola. !!

Edited July 30, 2005 by right_freds_dead

[88Crash]

I'm in 'the business' as well  :0)

Have to say sentiment amongst the subbies has definately changed .Last year no-one would even consider the fact of a fall in prices , I'd go as far as to say I didnt find a single person to agree with me. This year almost totally reverse , most now see the signs.

Quite a few of the small sites I've visited ( 40 - 60 plots ) have almost all been exclusively bought up by BTL.

Dames

<{POST_SNAPBACK}>

Spot on with the 'change of sentiment' Dames

I agree, this time last year nobody in the business considered a crash possible

Now, sales directors that have been in the business less then 10 years are stunned at the prospect that prices are falling and could fall a LOT further

To make matters worse, they are actually having to sell (that wasn't part of their job description)

Most thought they were doing everybody a favour by actually giving them the privalege of buying a home

If a sale fell through it was good news- you stick it back on the market for an extra 20K

Directors that have been in the game longer are suddenly getting their memories back

They NOW remember the last HPC - BUT at the moment the sentiment is

"It won't be as bad as last time"

They are probably right

IT WILL BE WORSE!

[Dames]

Couldnt agree more .

Anyone here moneybox today , all about Aday and property in SIPP's next year.

Turns out - as usual under Nu-Labor - it's for the wealthy only.

http://www.bbc.co.uk/newsa/n5ctrl/progs/in...oney/latest.ram

Dames

[Smurf1976]

Media / bank "information" on the housing market has suddenly gone VERY quiet in Oz. Even to the point of a major bank no longer updating its price data monthly.

I have no firm basis to say that this means anything in terms of the actual prices but if they were booming then I think we would be hearing plenty about it. Best guess is that June figures showed something the banks didn't like...Looks like the HPC could be gaining momentum in more countries than just the UK.

[oldmisery]

wheres the trigger or the panic?

[urban_hymn]

I'm in 'the business' as well  :0)

Dames

<{POST_SNAPBACK}>

I'm in the business too! (subbie)

We picked up three new orders last week totalling approx. £4.5m for concrete frames for apartment developments in Sheffield, Leeds and Gateshead.

We are utterly stacked out with work at the moment. Many northern cities are still in the grip of apartment building frenzy nor is there any sign of it abating.

Recently we hired an English/Polish speaking supervisor specifically to liase with the rapidly increasing number of Polish carpenters we are employing, many of whom have little or no english. This of course has safety implications and more than one main contractor has expressed their reservations about our "united nations" (Indian/Polish) workforce who cannot read the safety notices on site.

I went to the boss and said I was struggling to cope with the work we had and we needed to start another quantity surveyor - he said sorry mate nothing doing, but he did give me fat pay rise

(edited for typos.)

Edited July 30, 2005 by urban_hymn

[AgeingBabyBoomer]

I went to the boss and said I was struggling to cope with the work we had and we needed to start another quantity surveyor - he said sorry mate nothing doing, but he did give me fat pay rise 

(edited for typos.)

<{POST_SNAPBACK}>

Perhaps the reason he won't start another quantity surveyor is because he knows something you don't.

Maybe you won't be so stacked out with work once these orders are complete.

A big pay rise for you is a cheap option for him to get the work done before it dries up.

If I were you, I would enjoy the money, and get to work on my CV

ABB

[eurows]

I went to the boss and said I was struggling to cope with the work we had and we needed to start another quantity surveyor - he said sorry mate nothing doing, but he did give me fat pay rise

Come back next month when your on the dole and gloat. By the way large fry's are in the bigger holder

[88Crash]

Perhaps the reason he won't start  another quantity surveyor is because he knows something you don't.

Maybe you won't be so stacked out with work once these orders are complete.

A big pay rise for you is a cheap option for him to get the work done before it dries up.

If I were you, I would enjoy the money, and get to work on my CV

ABB

<{POST_SNAPBACK}>

Anybody that knows how building companies work, already know that booming construction, doesn't always mean a booming economy/housing market

Far too complex to go into on a forum post but to give one simple example

remember the last boom/crash?

London docklands was booming in 88/89 - Canary Wharf had just been completed and there stood Europes highest building - everybody knew the boom would go on forever

Then it stood pretty much empty for years - prices crashed - O&Y the builders, went bust (one of the biggest in the world at the time)

But the interesting thing was that Reichman, the main man at O&Y stayed rich as was back in the game, as if nothing happened

Point being - the real property players make money during Boom and Bust

They play a major part in any housing boom, so they tend to know the timing of a bust before the rest of us

[88Crash]

Come back next month when your on the dole and gloat. By the way large fry's are in the bigger holder

<{POST_SNAPBACK}>

With respect, I don't think Urban Hym was gloating - just saying it,as it was on his site

[needle]

, but he did give me fat pay rise 

(edited for typos.)

<{POST_SNAPBACK}>

Good for ya m8. Keep it up!

[AgeingBabyBoomer]

'They play a major part in any housing boom, so they tend to know the timing of a bust before the rest of us'

Indeed we agree on that point.

Can I ask how long ago it was that the orders you are filling now were placed?

I realise you feel good about your pay rise,but for me, as an outside observer, your companies reluctance to hire is far more telling.

If order books were full for the next year, I'm sure he would want to hire now, so that the new folk would be up to speed to cope with the workload.

All this being qualified with ignorance of the building trade, but some experience of the business world in general, and on reading the signs of a companies progress.

Just my £0.02

ABB

[urban_hymn]

I realise you feel good about your pay rise,but for me, as an outside observer, your companies reluctance to hire is far more telling.

<{POST_SNAPBACK}>

ABB I actually thought your first reply showed you had misunderstood the tone of my first post but as these forums lack eye to eye contact perhaps it's my fault.

I wasn't gloating at all. I know only too well how cyclical the construction industry is. I can't offer the level of intellectual input that some other posters can bring to the forum but I am in the frontline working for specialist subcontractor employed by the biggest plc housebuilders in the UK and therefore have some anecdotes from time to time.

My fingers and toes are all crossed for a house price crash. My firm does civils, hospitals, MOD work etc. reinforced concrete is everywhere!

My post was bearish. "Lifestyle" city apartments are still being built in their thousands - this particular market sector will take a hell of a beating at some point in the future I'm convinced of it.

[88Crash]

All this being qualified with ignorance of the building trade, but some experience of the business world in general, and on reading the signs of a companies progress.

Just my £0.02

ABB

<{POST_SNAPBACK}>

Hi ABB

Hi ABB

You'll find the building trade is still like any other business, especially when a boom is taking place

A boom interrupts the fundamentals, where directors can make decisions based on comfortable logic and it becomes a free for all

During the dot com boom/bust, directors of UK Telecom companies were buying foreignTelco/Internet companies for huge sums

But just because somebody pays 500 million for a company, doesn’t mean it is actually worth 500 million when the boom finishes (In this example the company purchased, was flogged for 5 million- 18 months later)

Somebody lost 495 million – but it wasn’t the directors that made the bad purchase

Back to building

When you see those brand new developments still being constructed, like the ones that Urban Hymn is working on, it’s a natural assumption to think that things must be going well

You’d be crazy to risk millions, investing in a falling market

If it was your money, it would be crazy, BUT if its not who cares – go for it!

[Guest Time 2 raise Interest Rates]

wheres the trigger or the panic?

<{POST_SNAPBACK}>

The trigger and the panic will kick in spring, summer '06 when the Bank of England start to raise interest rates due to rising inflation and weak sterling. TTRTR should start unloading a few properties while he still can. I wouldn't want him to end up on the streets (from what I gather it's very cold in Sweden in the winter).

[oracle]

The trigger will be when the YOY stats go negative and BTL suddenly twigs that he/she is LOSING money...it's not rocket science!

...you'll end up with some selling up,and the more dumb ones holding(and panic selling at the bottom).....just like dotcoms.

[AgeingBabyBoomer]

urban_hymn,

OK, many times does the witten post get misconstrued

I got a big pay rise not so long ago, ad felt good about it.

Shortly afterward, one guy in my group got made redundant -

big pay rises don't always mean things are going great

Anyhow, it seems we basically agree.

Cheers

ABB

[Guest Time 2 raise Interest Rates]

The trigger will be when the YOY stats go negative and BTL suddenly twigs that he/she is LOSING money...it's not rocket science!

...you'll end up with some selling up,and the more dumb ones holding(and panic selling at the bottom).....just like dotcoms.

<{POST_SNAPBACK}>

Early '06 should see yoy stats go negative. I'm not too sure if TTRTR comes under the more dumb ones. I've been giving it a bit of thought TTRTR, you could always put a caravan on my drive for a small fee.