Jump to content
House Price Crash Forum
Sign in to follow this  
Duplex

Danger Of Negative Equity For Buy-to-let Borrowers

Recommended Posts

Nice.

Kinda flies in the face of the oft repreated Scottish estate agents reassurance - sales patter - 'there has never been a case of negative equity in Scotland'.

More of the same please :)

Edited by Dosser

Share this post


Link to post
Share on other sites
Nice.

Kinda flies in the face of the oft repreated Scottish estate agents reassurance - sales patter - 'there has never been a case of negative equity in Scotland'.

More of the same please :)

You are kidding! Have you actually heard that statement from estate agents? :o

Share this post


Link to post
Share on other sites
Nice.

Kinda flies in the face of the oft repreated Scottish estate agents reassurance - sales patter - 'there has never been a case of negative equity in Scotland'.

More of the same please :)

Have to say I've never heard that sales patter in my life - why would any Estate Agent feel the need to say that?

Share this post


Link to post
Share on other sites
Report on the probability that recent BTL'ers are in negative equity already.

The Herald

That's a cracking article Duplex:

Revaluation is only triggered if an owner seeks to borrow more against the value of a property. Of course, if you are trying to switch lenders for a cheaper deal, the new lender will also need a new survey. Do not assume that you will be offered the same terms as you already have by a new lender.

Heh Heh Heh - locked into that old mortgage deal.

Share this post


Link to post
Share on other sites
You are kidding!  Have you actually heard that statement from estate agents?  :o

Yes I have personally heard that, although it was some years ago now. I have also heard an associate say the same thing last year when she was buying and I surmised she was told that by an EA. Although, I will admit that perhaps I might generalised my anecdotal experiences too much.

Share this post


Link to post
Share on other sites
Have to say I've never heard that sales patter in my life - why would any Estate Agent feel the need to say that?

To alleviate the fear of ending up in negative equity by paying too much for a property.

For an example see why Tenerife? Paragraph 3

http://www.soldirect.com/buyingproperty.htm

I know that isn’t the UK, but the principle remains the same.

Edited by Dosser

Share this post


Link to post
Share on other sites

It won't be the first nor will it be the last. It hasn't been that hard during the boom to inflate the cost of your house for re-mortgaging purposes to borrow more for BTL purchases. Likewise during this boom as well people have been re-mortgaging to take money out of their home for personal spending.

Normally the rule of thumb is property goes in a 7 year cycle and doubles every 10 years. Things are different this time and reading between the lines is that if the USA goes belly up houses will drop and not recover for 15 years. A problem that will occur for BTL is that they could be strapped to pay for the mortgage and likewise the tenant will be strapped as well in a serious recession. Also there will be a decrease of working tenants.

In coming months and years there should be job increases in both security and debt collectors. Also security type devices for homes if you are thinking of another business.

My tip take a really good holiday this year so you have some good memories of this millenium. 15 - 20 years in the doldrums is a long time.

Share this post


Link to post
Share on other sites
Guest horace

The article states

`Take an example. A 6% decline in the value of a flat purchased for £200,000...`

I am not familiar with Scottish prices but `£200,000` for a flat in Scotland sounds like journalistic licence and with this in mind (if I am correct) is good reason to take this story with a very large pinch of salt.

horace.

Share this post


Link to post
Share on other sites
The article states

`Take an example. A 6% decline in the value of a flat purchased for £200,000...`

I am not familiar with Scottish prices but `£200,000` for a flat in Scotland sounds like journalistic licence and with this in mind (if I am correct) is good reason to take this story with a very large pinch of salt.

horace.

I'm glad you mentioned you are not familiar with scottish prices, so you comment should be taken with a even larger pinch of salt :D

Plenty flats for sale around that price. Fair enough, its well above an average price for an average flat, but there are plenty.

here's a few around that price

http://www.gspc.co.uk/forsale/searchres.as...=15&image1.y=14

Share this post


Link to post
Share on other sites
Phew!!

I find those prices staggering. Solid gold toilet seats I hope.

horace.

I dunno... you get alot more for your money than down south... proper high ceilings, solid construction, period details, 4-bedrooms....

Unless, ofcourse, you consider glasgow to be such an undesirable place that even with the quality of housing, you aren't prepared to pay these amounts for them.

hmm.... I may actually have to take that back after looking at this one :blink:

http://www.gspc.co.uk/PropertyImages/pdf/9...08/200517:17:01

(although its in THE most desirable area of glasgow.... very posh)

I do believe these sort of properties are due for quite a drop though.

Share this post


Link to post
Share on other sites
I am not familiar with Scottish prices but `£200,000` for a flat in Scotland sounds like journalistic licence and with this in mind (if I am correct) is good reason to take this story with a very large pinch of salt.

Go to www.espc.com you can do a detailed search on every flat in Edinburgh >= £200K.

Just checked it and it came up with 399 flats. There are a total of 1921 flats for sale so that means 20.7% of the flats on sale in Edinburgh are over £200K.

I find those prices staggering. Solid gold toilet seats I hope.

No just the result of 5 years of rampant speculation... both by locals and evil out of town speculators looking to make a quick buck.

It sucks.

Share this post


Link to post
Share on other sites
The article states

`Take an example. A 6% decline in the value of a flat purchased for £200,000...`

I am not familiar with Scottish prices but `£200,000` for a flat in Scotland sounds like journalistic licence and with this in mind (if I am correct) is good reason to take this story with a very large pinch of salt.

horace.

Unfortunately 200000 is becoming the norm :(

Share this post


Link to post
Share on other sites
Go to www.espc.com you can do a detailed search on every flat in Edinburgh >= £200K.

Just checked it and it came up with 399 flats. There are a total of 1921 flats for sale so that means 20.7% of the flats on sale in Edinburgh are over £200K.

No just the result of 5 years of rampant speculation... both by locals and evil out of town speculators looking to make a quick buck.

It sucks.

I would love to know how many flats have been bought up by people south of the border recently...

Its fun to play 'spot the scot' on a night out sometimes... I've gone whole walks through town without hearing a scottish accent on a few occassions.

Share this post


Link to post
Share on other sites
I dunno... you get alot more for your money than down south... proper high ceilings, solid construction, period details, 4-bedrooms....

Unless, ofcourse, you consider glasgow to be such an undesirable place that even with the quality of housing, you aren't prepared to pay these amounts for them.

hmm.... I may actually have to take that back after looking at this one  :blink:

http://www.gspc.co.uk/PropertyImages/pdf/9...08/200517:17:01

(although its in THE most desirable area of glasgow.... very posh)

I do believe these sort of properties are due for quite a drop though.

That is an incredible price for Novar Drive - those closes are often very noisy as a lot of the flats are student houses. You could get a 3 bed house in Jordanhill for less - anyone who pays that is crazy!!!

Share this post


Link to post
Share on other sites

the article refers to a possible 'scandal' - can't see what the scandal is really, lenders desperate to increase profits over-lend to borrowers gambling on the property market who pay greedy vendors and greedy EAs who have facilitated price rises - the gambler loses - everyone else wins - standard type of transaction - no scandal

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.