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Running a website for property investors at [ Link removed by Moderator ] and having a very substantial members database allows us to monitor the differant levels of activity and get 'snapshots' of what is happening on the housing front, certainly as far as investment property is concerned. Its interesting and logical that almost without exception, when a lender releases a tranche of cheap money activity on our site is a lot higher. Auction activity also picks up and there is a higher percentage of sold property confirmed by the major auction houses we deal with. As long as cheap money is being made available and especially so if its fixed for a lengthy period, investors will continue to buy, underpinning prices and making the possibilities of a housing price crash still more remote.

Splatthefly

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Splatthefly - This is very interesting.

Based on your experience, what would be the effect of a 1 percentage point increase in interest rates?

Do you think that the current housing market can be likened to a ship sailing on calm waters but with lots of holes just about the water line. All it will take is a few waves and the whole thing starts to go under fast.

What do you think is the level of sensitivity of these investors to interest rates? That is the crucial question.

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Running a website for property investors at [ Link removed by Moderator ] and having a very substantial members database allows us to monitor the differant levels of activity and get 'snapshots' of what is happening on the housing front, certainly as far as investment property is concerned. Its interesting and logical that almost without exception, when a lender releases a tranche of cheap money activity on our site is a lot higher. Auction activity also picks up and there is a higher percentage of sold property confirmed by the major auction houses we deal with. As long as cheap money is being made available and especially so if its fixed for a lengthy period, investors will continue to buy, underpinning prices and making the possibilities of a housing price crash still more remote.

Splatthefly

Er I don't think so. Your cost for comparison is 7.2% apr which no-one could call cheap money.

The investment market and recent BTLs in particular is the one area where even our more bullish posters expect a bloodbath.

I know things are tough but running an advert masquerading as a post might have been better placed on Motley Fool.

The Fox.

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I could not agree more.

Cheap money or not, I think the majority of the populus are realising that IRs will be rising. The investment side of the market will always be active when there is cheap money. I have noticed though, that a lot of the long term mortgage deals are NOT in the BTL category and are trying to entice the FTB's back into the marketplace.

Either way, I think the deals being offered now show that FTB's are non-existant. Upping the interest rates to flush out the BTL brigade will still make the FTB ladder hard to get on - so lets offer a long-term deal NOW!

Thoughts?

TB

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Not something I often say but...

Awoogaaaa!

And not something that was neccessary. There is enough information in the first post to explain this entire boom. Read it and read it again until you see what the reason for this boom is.

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And not something that was neccessary. There is enough information in the first post to explain this entire boom. Read it and read it again until you see what the reason for this boom is.

Cheap money is relatively uncontentious as a partial driver of the bubble eek but maintaining that it will continue to push it higher is rubbish. I think that plus the contention that a 7.2% APR is somehow "cheap money" prompted the "Awooga". CheapER money might do it for a bit but it's no fun buying a £300k property at 4% interest rates if the house is worth £30k less than you paid for it a year later. You've saved 3k in interest and lost £30k in value - not a screamingly good deal.

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Cheap money is relatively uncontentious as a partial driver of the bubble eek but maintaining that it will continue to push it higher is rubbish. I think that plus the contention that a 7.2% APR is somehow "cheap money" prompted the "Awooga". CheapER money might do it for a bit but it's no fun buying a £300k property at 4% interest rates if the house is worth £30k less than you paid for it a year later. You've saved 3k in interest and lost £30k in value - not a screamingly good deal.

That assumes you are rational and not expecting a greater fool. Many people are still expecting one to walk through the door and purchase their overpriced shite hole for top dollar and some are still buying based on that theory.

Also this entire boom is based on cheap credit. Once that ran out it, it became based on idiot sheep who invest in property because his mate has made money out of it (regardless of the fact that he made money two years ago when rates were lower) but because money is available he is able to find someone willing to lend him the money.

Remember that this is a post Bart dragged up from November simply to make his awooga comment. I just wanted to add that there was some value in the first post.

Edited by eek

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I agree.

Sister asked my opinion about a BTL she was interested in a few months ago. You know the deal 15% deposit ( most of it to be MEWed) and balance on mortgage.

Without even seeing the property, I asked her if she would buy it if she had the Cash. No, she replied. So I asked her, why had this property suddenly become such a good investment just because some "friendly" banker would lend her the money? :rolleyes:

Fortunately, she went off the idea.

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Running a website for property investors at [ Link removed by Moderator ] and having a very substantial members database allows us to monitor the differant levels of activity and get 'snapshots' of what is happening on the housing front, certainly as far as investment property is concerned. Its interesting and logical that almost without exception, when a lender releases a tranche of cheap money activity on our site is a lot higher. Auction activity also picks up and there is a higher percentage of sold property confirmed by the major auction houses we deal with. As long as cheap money is being made available and especially so if its fixed for a lengthy period, investors will continue to buy, underpinning prices and making the possibilities of a housing price crash still more remote.

Splatthefly

Cheap loans are often a cover for a scam. In the US the cover is being blown by the press:

http://www.builderonline.com/industry-news...rticleID=233079

"There are a lot of exotic mortgage types in the market right now. As the market slowed down, lenders attempted to keep the game going by offering more and more alternative mortgage types that have
the appearance of lowering the costs
of a monthly loan payments," said Dick Bove, a banking analyst for Punk Ziegel & Co.

"By summer, we'll see significant problems in the sector.," Mr. Bove predicted.

Wu huh huh huh (hideous laughter)

Scam loans will ultimately undermine the integrity of the market and possibly cause the crash to be more severe than would otherwise have been the case.

Edited by Realistbear

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  • 302 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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