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RICS - the brakes are on!

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I dont think RICs know sh1t of sh1t.

SImple maths - look at a towns local wage. Divide by local house prices.

Banks have a 4.25 cap now.

 

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He also said that tax changes for buy-to-let investors were likely to mean that rents will continue to rise faster than house prices, in the near future as well as further ahead.

This old chestnut!

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Apparently it's the 'lack of choice' and 'squeezed homehold income' that's to blame. NO it's a quarter of a century of ramping and basing the whole UK economy on housing.

Just look at how housing and the financilization of it feature on this site, Forum Factory

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1 hour ago, spyguy said:

I dont think RICs know sh1t of sh1t.

SImple maths - look at a towns local wage. Divide by local house prices.

Banks have a 4.25 cap now.

 

Agree prices will eventually have to revert to local wages. But Lots of banks are still lending 5x joint salary. Virgin, Santander for example speak to a broker I'm not making it up!

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1 hour ago, spyguy said:

I dont think RICs know sh1t of sh1t.

SImple maths - look at a towns local wage. Divide by local house prices.

Banks have a 4.25 cap now.

 

I see you have edged up from 4 to 4.25. The 15% at 4.5x or more is now a rolling year instead of per quarter.

 

Quote

 

Boulger said: 'Because many mortgage offers are valid for up to six months but lenders don't know how quickly borrowers will complete, each lender has up to now had to assume that a higher than statistically likely proportion of offers in excess of 4.5 times income will complete quickly.

'As a result lenders have restricted the proportion of offers in excess of 4.5 times income to about 13 per cent, compared to the PRA's actual limit of 15 per cent.

'This has been to ensure that in case an abnormal proportion of higher income cases complete quicker than normal, the lender's proportion of such cases completing in any one quarter did not exceed 15 per cent.'Now, by basing the 15 per cent limit on completions over a one-year period rather than three months, it gives lenders much more flexibility to get closer to the 15 per cent limit if they wish to. 

http://www.thisismoney.co.uk/money/mortgageshome/article-4263602/Bank-England-make-EASIER-borrow-mortgage.html


 



 

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1 hour ago, ThePiltdownMan said:

Election uncertainty?...they are really scraping the barrel for reasons now.

Best reason ever given by RICS for slow housing market was in a June report a few years back: Andy Murray's good run at Wimbledon was stopping people from viewing.

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9 minutes ago, rantnrave said:

Single or joint income? Makes a huge difference.

It's whatever is on the CML application form, which over the years has seen more joint applications at higher income multiples, than when the average house was 60k in the late 90's (Bank of England made independent given control in 1998).

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"brakes on"?  just last week we were told the market "was in neutral".  Hopefully "reverse gear" will be next...

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3 hours ago, rantnrave said:

Single or joint income? Makes a huge difference.

IMO 3.5x single and 2.5x joint should be the max considered (unless the 2.5x joint manages to be less than the 3.5x of the higher income, unlikely).  4.5x single is going to be nearly impossible to cope with should you lose some or all of your income stream and 4.5x joint is plain and simple insanity.

People borrowing jointly just don't seem to understand that they are doubly at risk of income loss hitting their ability to repay and often seem to believe that they are a better candidate for credit because there's always the other person's income.  There's also the 'what to do if the couple break up' factor to take into consideration.

 

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3 hours ago, rantnrave said:

Best reason ever given by RICS for slow housing market was in a June report a few years back: Andy Murray's good run at Wimbledon was stopping people from viewing.

You should read the individual surveyors opinions from that report, some of them are barmy:

Quote

School holidays really affect the market. This year has been very tricky so far, no one is committing.

 

Quote

Tenant demand has slowed in the last month, possibly due to the onset of better weather and bank holiday weekends.

 

Quote

Prices are continuing to drop - or offers are continuing to be very cheeky

Love it :)

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7 minutes ago, mat109 said:

You should read the individual surveyors opinions from that report, some of them are barmy:

 

 

Love it :)

My favourite:

"Over valuation remains the scourge of the market"

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The bit I don't get is why Rightmove is not flooded with sellers already.  Surely this is the BEST time ever to sell that inheritance property / trade down / get out of BTL.

I mean it is not that supply is currently average and normal.  It is way tighter than normal.  Bizarre!

Edited by ElPapasito

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In a bubble, nobody thinks they will be unable to get out in time.

The bullish ones will think we are seeing a small downward blip, other people are simply following the herd. By the time those in the middle and back of the herd realise what is happening, it will be too late to get out.

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49 minutes ago, ElPapasito said:

The bit I don't get is why Rightmove is not flooded with sellers already.  Surely this is the BEST time ever to sell that inheritance property / trade down / get out of BTL.

I mean it is not that supply is currently average and normal.  It is way tighter than normal.  Bizarre!

Because it happens to everyone else and not them

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3 hours ago, ElPapasito said:

The bit I don't get is why Rightmove is not flooded with sellers already.  Surely this is the BEST time ever to sell that inheritance property / trade down / get out of BTL.

I mean it is not that supply is currently average and normal.  It is way tighter than normal.  Bizarre!

I've been watching a house for over a year. 

Overpriced and after a year price reduced by 3%.

Two months later "sold subject to contract" which lasted for three months.

Now on the market again with no price drop but also offered for rent at a daft price with a maximum six month term. Presumably waiting for the election to be out of the way.

Denial is strong in this one. 

Edited by Bruce Banner
error

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2 hours ago, MrMonkey said:

In a bubble, nobody thinks they will be unable to get out in time.

The bullish ones will think we are seeing a small downward blip, other people are simply following the herd. By the time those in the middle and back of the herd realise what is happening, it will be too late to get out.

It's gone way past a bubble, it's a full on mania where everything thinks the free money will last forever and a day.

When the collapse comes not only are people in for a shock, they are in for years of misery and pain too.

I could be wrong of course, but I'm pretty sure i'm not.

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