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FTBvish

A Friend At Work Has Just Btl

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We both work in Canary Wharf, decent jobs.

Conversation with him..

FTBVish said at 10:55AM:

dont you live with your parents?

bob said at 10:55AM:

yeah - talking about my flat

FTBVish said at 10:55AM:

didn't know you had a flat... investment?

bob said at 10:57AM:

yeah

FTBVish said at 10:57AM:

hows it performing?

FTBVish said at 11:02AM:

that well!

bob said at 11:02AM:

just got it two weeks ago - tenants moving in this w/end

bob said at 11:03AM:

so at the mo making a loss :(

FTBVish said at 11:05AM:

how come you bought into a falling market?

bob said at 11:05AM:

the location is good - loads of demand in area - plus it's long term for me..i might move in there my self

FTBVish said at 11:06AM:

may well be long term if the house price decline continues!

bob said at 11:07AM:

as long as my mortgage gets paid - then I get the flat almost free

bob said at 11:09AM:

prices are not going down in all areas - biggest drops have been in areas where prices are too high - like above half a mil

FTBVish said at 11:11AM:

i could talk about this forever... so I better stop now

FTBVish said at 11:11AM:

good luck though

bob said at 11:27AM:

cheers

This guy is a good friend of mine, and he has just gone & bought into the hype at the worst possible time!!

I find it incredible that so many of my friends who I would consider quite intelligent, seem to be incapable of realising that property at the moment is a ludicrous investment.

Oh well..

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What are the odds on a crash anyway – most of the financial experts don’t think so, only the nutters on this site think there will be a crash (1% of the population? (My guess))

So if no crash happens which is the most likely (not in my opinion) your mate will do all right in the long run- if not he will learn a hard lesson (like the other 99% of the population)

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I smell some dodgy paperwork here.....normally you cannot get a BTL mortgage if you cannot show evidence of having serviced an owner-occupier residential mortgage of your own.

Edited by IPOD

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What are the odds on a crash anyway – most of the financial experts don’t think so, only the nutters on this site think there will be a crash (1% of the population? (My guess))

So if no crash happens which is the most likely (not in my opinion) your mate will do all right in the long run- if not he will learn a hard lesson (like the other 99% of the population)

Who are these "most of the financial experts"?

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What are the odds on a crash anyway – most of the financial experts don’t think so, only the nutters on this site think there will be a crash (1% of the population? (My guess))

So if no crash happens which is the most likely (not in my opinion) your mate will do all right in the long run- if not he will learn a hard lesson (like the other 99% of the population)

Perhaps you should live up to your name and you will see that the "experts" said the exact same thing the last time round and probably the time before that and the time before that. Am I right Charlie?

Note that I haven't said house prices will crash or that they won't, despite me being bearish. All I have done is question these experts that got it so wrong the last time.

You must understand the concept of VI. Just as much as I must concede that I have a VI in house prices falling (doesn't everyone?).

Also if you are going to refer to people on here as "nutters", you could at least give them the respect as to call those experts nutters too. Yeah, financial nutters has a ring to it!

NDL

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Who are these "most of the financial experts"?

financial experts = anyone who works in the news room of the BBC – or personally knows Gordon brown and co

NDL – nutters was used with a little sarcasm as that is how I feel we are seen by the VI / average person

Edited by look to the past

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What are the odds on a crash anyway – most of the financial experts don’t think so, only the nutters on this site think there will be a crash (1% of the population? (My guess))

So if no crash happens which is the most likely (not in my opinion) your mate will do all right in the long run- if not he will learn a hard lesson (like the other 99% of the population)

Okay.. Imagine there is no crash. that prices maintain current levels and the market picks up and properties sell,

currently mortgages have been high for four years and our debt burden is crippling the economy

four years

this should be 16% of all properties mortgaged with the levels of debt of current prices.

current debt is causing a high street recession.

If prices stayed stable for another decade that would be over 50% of mortgage debt owed at todays house prices.

The Economy cannot sustain current debt,

add another decade to it and the economy would fail long before we get there..

Argue this point "Look to the Past"

I have no idea how it could work.. do you?

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Argue this point "Look to the Past"

I have no idea how it could work.. do you?

I don’t know how it will work, I think that it will go down not fast at first but it will in 2/3 years time – but the point was they think they know how it all will work and that they can only make money

As a personal point I think I must make my posts more obvious maybe if I was to under line the “not in my opinion” part

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BTL is a gamble and a highly levered one at that. Nobody can accurately predict the future of the housing market anymore than anyone can accurately predict what horse will win next years national. You have done your duty to your mate by giving your opinion. She has placed her bet and will either be smug or sick as a parrot in two years.

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BTL is a gamble and a highly levered one at that. Nobody can accurately predict the future of the housing market anymore than anyone can accurately predict what horse will win next years national. You have done your duty to your mate by giving your opinion. She has placed her bet and will either be smug or sick as a parrot in two years.

Well said...

The thing that gets me is that these EA's and property experts can legally get away with saying "You can't lose money".

To me that is tantamount to a bookies being able to give punters £100K loans for bets and tell them the horse they're picking is a guaranteed winner.

They really really really need to legislate for this... all the share stuff now needs to carry warnings that prices can go down as well as up... why isn't that the case for property investment?

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Okay.. Imagine there is no crash. that prices maintain current levels and the market picks up and properties sell,

currently mortgages have been high for four years and our debt burden is crippling the economy

four years

this should be 16% of all properties mortgaged with the levels of debt of current prices.

current debt is causing a high street recession.

If prices stayed stable for another decade that would be over 50% of mortgage debt owed at todays house prices.

The Economy cannot sustain current debt,

add another decade to it and the economy would fail long before we get there..

Argue this point "Look to the Past"

I have no idea how it could work.. do you?

Exactly the average current mortgage is meant to be £300 or so a month. The average new mortgage must be nearer £1200 a month.

£900 (extra) * 70,000 (mortgages a month) * 12 £63,000,000 a month lost every month. Of course over a year 70,000 would pay for 12 months, 70,000 for 11 months and so on as each new month there were fresh applicants for mortgages.

By the end of one year the total extra money paid on mortgages as opposed to other consumption would be

£4,914,000,000.00

:) Fair amount.

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I smell some dodgy paperwork here.....normally you cannot get a BTL mortgage if you cannot show evidence of having serviced an owner-occupier residential mortgage of your own.

I've noticed that more lenders are now considering BTL for FTB'ers. Either they are keeping up with the times or offering more to compete with their rivals.

Assuming he has a good credit rating it is possible but there may have been a "high risk" fee added to the mortgage, or a slightly higher IR.

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lives with his parents then he's going to be just fine. Lucky b@stard!

I wouldn't call a grown man forced to live with his parents well into his thirties "lucky".

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I wouldn't call a grown man forced to live with his parents well into his thirties "lucky".

Forced to live?? If he works at Canary Wharf I doubt this is the case!

He's obvioulsy got it easy and may enjoy his parents' company.

I am enjoying living with my GF's inlaws although this is only for a period of 7 weeks. In all seriousness it has provided a good opportunity to bond with the family and help out with family responsibilities. As my folks are on the other side of the country I've enjoyed it. SO far!

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So if no crash happens which is the most likely (not in my opinion) your mate will do all right in the long run- if not he will learn a hard lesson (like the other 99% of the population)

Errr.. I don't think so. I don't think it would be 99% of the population that would suffer directly. Loads of people don't own houses. Loads more own them outright. Loads more again have only small remnants of mortgages left after many years of paying back. The percentage of people that would be financially clobbered by a crash would be far less than 99% surely. If you are using the "safety in numbers means it can't happen" argument, I think you're way overstating it IMHO.

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Well, as I've mentioned before, a mate of mine (similar age to your mate) was living with his parents until they gifted him £200,000 with which.... He bought a house! Anyhow, just to cut to the chase, he's had it a couple of months and has left his job to paint and refit it, with a view to achieving a quick sale before Christmas.

So there must be some life left in the market.

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  • 337 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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