Jump to content
House Price Crash Forum
Sign in to follow this  
Simon Taylor

Times Reports Market Forces At Work Shock

Recommended Posts

This morning's Thunderer..

http://www.thetimes.co.uk/tto/news/politics/article4655504.ece

And for those on the wrong side of the paywall, here's some highlights..

Half a million properties will come on to the housing market over the next five years as landlords sell up after George Osborne’s changes to buy-to-let rules, a survey suggests.

and..

Ed Stansfield, chief property economist at Capital Economics, said the measures would act as a drag on house prices. “The current consensus forecast of 5 to 7 per cent growth in house prices next year looks optimistic given the number of landlords likely to sell up,” he said

“Half a million properties is about six months worth of transactions, and that many properties dropping on to the market in a short period of time would change market dynamics dramatically, moving the power back into the hands of buyers and forcing house price inflation downwards.

Share this post


Link to post
Share on other sites

Let's make no bones about it...the one thing that is going to collapse UK house prices is a London mega bubble collapse.

If London was ramped up by foreign money, from Russia and China, then when the panic starts the collapse will be spectacular.

This BTL is a sideshow IMHO, just to show the sheeple the government cares about their housing needs ( like **** they do ).

Share this post


Link to post
Share on other sites

China's bringing down everything. Who would have predicted that !!

Probably quite a lot of people to be fair - just a question of timing.

Share this post


Link to post
Share on other sites

This morning's Thunderer..

http://www.thetimes.co.uk/tto/news/politics/article4655504.ece

And for those on the wrong side of the paywall, here's some highlights..

Half a million properties will come on to the housing market over the next five years as landlords sell up after George Osborne’s changes to buy-to-let rules, a survey suggests.

and..

Ed Stansfield, chief property economist at Capital Economics, said the measures would act as a drag on house prices. “The current consensus forecast of 5 to 7 per cent growth in house prices next year looks optimistic given the number of landlords likely to sell up,” he said

“Half a million properties is about six months worth of transactions, and that many properties dropping on to the market in a short period of time would change market dynamics dramatically, moving the power back into the hands of buyers and forcing house price inflation downwards.

So why would landlords sell up if they already own the property?

Share this post


Link to post
Share on other sites

Let's make no bones about it...the one thing that is going to collapse UK house prices is a London mega bubble collapse.

If London was ramped up by foreign money, from Russia and China, then when the panic starts the collapse will be spectacular.

This BTL is a sideshow IMHO, just to show the sheeple the government cares about their housing needs ( like **** they do ).

I disagree - I think it's (slowly) coming to the top of the political agenda.

I attended People's Question Time in session in Hillingdon (the London borough 'afflicted' by Heathrow expansion and HS2). They'd allocated more time for those two issues - but it was really housing that got the most people riled up. There were the usual tiresome nimbys complaining about HS2 and Heathrow but nobody - nobody - complained about housing development.

People were literally booing Boris when he said rent controls were a bad idea. Came up with his soundbite from Vietnam and Ho-chi-min city (though rents there were set comically low there - I can't find the source but I think it was something like 1-2% of average income).

He was even asked if he thought house prices were too high (a question he cunningly dodged).

All of the mayoral candidates - even Zac Goldsmith, the tory candidate, shock horror - put it right at the top of their agendas. With less than half of london residents actually owning their own home - make no mistake - the new mayor WILL be elected on housing.

Though what the successor will actually be able to achieve (not much in practical terms), it will send a powerful message to central Government as they outbid each other on promises.

Share this post


Link to post
Share on other sites

Is this where the media starts talking about drops in house prices as 'negative inflation' too?!

After our gathering at Christmas I negatively inflated or balloons.

Probably just do what they did last time and claim house prices are moving sideways. Lol

Share this post


Link to post
Share on other sites

I like it.

Investment not business - if you didn't understand the risks - whereas others did, and recoiled from the prices you were paying - they you shouldn't have outbid families with your claims on all the homes, at ever higher prices, via BTL mortgages. You did, and now some investment tax perks being withdrawn. Deal with a market for once.

"The changes will scupper the business models of many landlords so it is no wonder that such a high number want to sell up.”

Share this post


Link to post
Share on other sites

So why would landlords sell up if they already own the property?

I'd question the 500K figure.

AFAICT the majority of transaction from 2002-2015 in the places I track have been to LLs.

I would guess that the majority were high LTV IO BTLers.

The number of OO are very low - BTLers have grossly distorted the numbers and price of houses.

MMR makes it easy to work out what these houses will clear at - about half the price BTLers paid for them.

Share this post


Link to post
Share on other sites

So why would landlords sell up if they already own the property?

Even some of the BTLers have some intelligence about this...

Same should apply to landlords who own property outright if they fear others who need to sell, and accept ever lower prices, will drag down value of their properties.

That's how markets work. They're all happy owners/BTLers (outright owner landlords too) when houses on a street worth £500K, and that being last price a buyer bought at. You can't really claim it's still work £500K when in a hpc seller accepts £350K, and a few months later another seller accepts £250K. Market has just told you (indices too) very differently by current transactions going on at the margin. Some outright owner landlords may look to sell if they fear wider values are set to down/plunge at the margin.

It's a market.

08/07/2015 at 21:10

OK, so now we are all pretty clear on what the implications are, what next?

I am in the process of remortgaging several of my properties to 85% fixed for 5 years but now I must re-think this.

Should I sell up? Maybe, but the CGT is horrendous!

Maybe I should remortgage to the max and wait for distressed sellers? I’m sure there will be plenty of these and the LPA receivers may well get very busy come 2017 and they won’t be wanting to hold highly leveraged assets that are losing money but still incurring tax liabilities for too long! Will we see early 90’s style fire sale opportunities? If so, cash will be king!

Will lenders change their notional rates to reflect the new cashflow issues? If they do borrowing will get tougher, and as we know, this drives property values down too.

Will mortgage brokers see another crash in applications?

Will BTL purchases in progress be aborted? If so this will hit estate agents and developers.

Will developers be able to continue to build if they lose the BTL off plan speculators which they are so reliant upon to get funding these days?

On balance, I think all those who have huge amounts of cash or the ability to raise it quickly are in for some rich pickings, leaving the rest with major difficulties to endure.

Maybe I will refinance at high gearing and a long term fixed after all?

What are your thoughts?

http://www.property118.com/budget-2015-landlords-reactions/76164/comment-page-7/#comment-57774

08/07/2015 at 21:32

What’s the point of holding a depreciating asset?

Better to hold if if you have maximised the cheap cash you can get out of it surely, especially if you can at least break even, and then use that cash to swoop into a buying frenzie when values bottom out?

http://www.property118.com/budget-2015-landlords-reactions/76164/comment-page-8/#comment-57783

Share this post


Link to post
Share on other sites

I'd question the 500K figure.

AFAICT the majority of transaction from 2002-2015 in the places I track have been to LLs.

I would guess that the majority were high LTV IO BTLers.

The number of OO are very low - BTLers have grossly distorted the numbers and price of houses.

MMR makes it easy to work out what these houses will clear at - about half the price BTLers paid for them.

2014

I think that the banks are good to go for 35%-40% off current prices. It's not price falls that produce losses - it's price falls and people failing to pay their mortgages. I seem to recall that there is no statistical link between negative equity and mortgage arrears. If people can pay their mortgages, then they do, as Carney delights in pointing out.

Fools and their money are soon eventually parted after a long protracted period whereby they are unwittingly bled dry by the banks in a market distorting exercise made at the expense of younger generations. That said if they're finally going in for the kill then up the banks! :P

Share this post


Link to post
Share on other sites

If London was ramped up by foreign money, from Russia and China, then when the panic starts the collapse will be spectacular.

I have a relative working as a finance director at a luxury goods distributor. They have seen big drops in sales to the Russian and Chinese.

Share this post


Link to post
Share on other sites

I have a relative working as a finance director at a luxury goods distributor. They have seen big drops in sales to the Russian and Chinese.

Still mega-mad money in art, but signs of a possible cooling. I'm alert for signals.

30 December 2015

"Once you go under that, where we're talking prices in the millions of dollars, people are feeling more squeezed. "There's much less confidence in the Chinese market. The Russians are feeling much poorer. People in general are feeling poorer, and that has had an impact."

http://www.bbc.co.uk/news/business-35160416

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Next General Election   93 members have voted

    1. 1. When do you predict the next general election will be held?


      • 2019
      • 2020
      • 2021
      • 2022

    Please sign in or register to vote in this poll. View topic


×

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.