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The Masked Tulip

Moneyweek

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Even if the cold weather and the approach of Christmas have brought shoppers onto the high streets, they are still keeping one eye on their wallets. BRC director general Kevin Hawkins said that shoppers remain “value-conscious” and that stores are still relying on discount offers to push sales, especially on housing-related products.

And it’s small wonder that consumers are feeling “value-conscious” – they need to be.

Amid rising energy prices, petrol bills, and charges for things like haircuts, education and healthcare, the only thing that was keeping consumers feeling good about the future was rising house prices.

But house prices have pretty much stopped rising now - some surveys even suggest they are falling. And Gordon Brown has now pulled away the one thing that most estate agents were relying on to re-inflate the market. Which was the prospect of hefty discounts for higher-rate taxpayers on investment property bought through Self Invested Personal Pensions (Sipps).

Of course, the key voices in the property sector are now falling over themselves to suggest that Sipps didn’t really matter that much in the first place. Here’s Keith Astill, managing director at UCB Home Loans, the buy-to-let arm of Nationwide building society.

"The decision will not have any major effect on the long-term health of the buy-to-let sector, as it affects only a small proportion of the market.”

But further down the same press release, we read that in October, 68% of mortgage brokers said they were considering putting buy-to-let property in a Sipp, and they would be suggesting that their clients do the same.

The majority also felt the buy-to-let sector “would be boosted by the pension changes”, while 65% believed it would “boost sales of buy-to-let property” by between 20% and 40% “in the first year.”

So if the mortgage brokers are right, that’s a big chunk of buy-to-let properties that won’t be sold next year. And if buy-to-let investors aren’t there to take the place of first-time buyers who have been priced out of the market, then what will happen? That’s right – prices will fall.

And if you’re still not convinced that the property market is heading for trouble, news from The Mortgage Works, Portman Building Society’s buy-to-let arm, just might persuade you.

The group announced on the morning before the pre-Budget report that it has stopped accepting applications for buy-to-let mortgages on new-build properties under one year old. Why?

Because “owing to the current over-supply of newly built property, valuation in this sector is more of an art than a science… we will go back into new build buy-to-let when we believe that the market forces of supply and demand have reached equilibrium.”

Wait a minute. Over-supply? Isn’t the Government trying to encourage new house building? Isn’t the perennial argument of the property bulls that there are too few houses to go round?

If there are too many houses, there are too many houses - it doesn't really matter what age they are. And again, that points to lower prices.

But the property pundits are incorrigible. As if to talk up the market in the wake of the Sipps bombshell, the Council of Mortgage Lenders yesterday upgraded its forecasts for house price growth for next year, from 0% to 2%.

And meanwhile, estate agent Bradford & Bingley is encouraging people to “remortgage now and offset the cost of Christmas”. That’s right – it’s offering a range of remortgaging deals which give customers cashback on completion of the deal, just in time for Christmas.

“These cashbacks are great for borrowers whether they want to use the money to help pay for the Xmas excess, save it or put it towards home improvements,” gushes B&B’s mortgage development manager.

Bankruptcies are at record highs. Repossessions are rising. Mortgage lenders are pulling out of the new build market because there are too many houses being built.

In light of all this, here’s our top tip for anyone tempted to fund this year’s Christmas spending by borrowing more money on their house. If you want to enjoy next Christmas under your current roof, don’t.

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"And meanwhile, estate agent Bradford & Bingley is encouraging people to “remortgage now and offset the cost of Christmas”. That’s right – it’s offering a range of remortgaging deals which give customers cashback on completion of the deal, just in time for Christmas.

“These cashbacks are great for borrowers whether they want to use the money to help pay for the Xmas excess, save it or put it towards home improvements,” gushes B&B’s mortgage development manager. "

Incredible............. just incredible...... Is the UK going stark raving mad? I mean - is this NOT incredible or what?? Please - answers below....... is it just me? I mean..... am I mad?

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Incredible............. just incredible...... Is the UK going stark raving mad? I mean - is this NOT incredible or what?? Please - answers below....... is it just me? I mean..... am I mad?

Well, those who do not concur with the thinking and actions of the majority are often described as mad.

As in "you must be mad not to buy now, houses only ever go up".

I doubt a medic would section you though.

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Guest The_Oldie
And meanwhile, estate agent Bradford & Bingley is encouraging people to “remortgage now and offset the cost of Christmas”. That’s right – it’s offering a range of remortgaging deals which give customers cashback on completion of the deal, just in time for Christmas.

I wonder, would these remortgages show up as new mortgage approvals and further boost the figures?

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Yes, all remortgages show up as part of the figures.

I decided to sent the below to portman.

I am intrigued to see if this lender is taking a responsible approach to the market.

If they do I commend them

I am considering a Buy To Let Mortgage against a property in the new King's Heath development in Exeter.

It would be a 2 bed flat that I believe I can purchase for £140,000 although it is £150,000 before cash back.

I have heard that you may be turning down mortgages against new builds due to an over supply, this surprises me as I constantly see in the press that there is a shortage of property's.

To that end do you see that there is an oversupply of two bed flats in the Exeter area?

and would you be able to assist me in this matter?

The first question is crucial I suppose. Certainly before you consider the second.

Thank you for your time in this matter.

(name removed to protect the not so innocent)

I will let you know of any answer I get.

This is one of the ex £170,000 flats.

and £140,000 does not mention the £10,000 more that got knocked of because I asked nicely.

It was a funny conversation.

Along the lines of..

Thank you (after the extra £10,000 was knocked of) But should I be concerned that prices may drop further..?

"No you shouldn't.. blah blah.. brief mention about prices never dropping and even a brief mention about Sipps..."

My reply was cheeky..

"Well, they seem to have dropped £10,000 in the last five minutes..."

Her face... she thought I was a completer wan*er

Which does not make her a poor judge of character, granted..

Edited by apom

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Well, those who do not concur with the thinking and actions of the majority are often described as mad.

As in "you must be mad not to buy now, houses only ever go up".

I doubt a medic would section you though.

There may be grounds for sectioning: high prices are harmful to society and the individual; and believing that prices are reasonable and will go up is clearly delusional and therefore a symptom of a psychotic illness.

Perhaps EAs should be forced to sedate anyone mad enough to enter their offices.

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  • 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%



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