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Mapatasy

House price crash expected - The Times

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Omg....the possibility of house prices going down terrifies me.

Hopefully, the saviour Lord Marcus Carney Esq OBE CBE KBE will stop this nightmare from occurring...-5% interest rates, NOW!

Edited by Princekie

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I don't pay a subscription so don't have access to the whole article but could view enough to catch:

"As a result, many people are selling and then renting instead of buying in the hope prices will fall even lower."

Isn' that utter madness though - Why gamble your family's future in that way? 

Have those "many people" calculated how far would prices need to fall to even break even after incurring all the costs of selling and rental costs for 2-5 years?! 

 

 

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15 minutes ago, fuzzy_bear said:

I don't pay a subscription so don't have access to the whole article but could view enough to catch:

"As a result, many people are selling and then renting instead of buying in the hope prices will fall even lower."

Isn' that utter madness though - Why gamble your family's future in that way? 

Have those "many people" calculated how far would prices need to fall to even break even after incurring all the costs of selling and rental costs for 2-5 years?! 

 

 

It is just made up shite to push whatever narrative they have been ordered to. At least it seems to favour our side for a change.

Like really what % of homeowners will be selling their home for this reason? 

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35 minutes ago, fuzzy_bear said:

I don't pay a subscription so don't have access to the whole article but could view enough to catch:

"As a result, many people are selling and then renting instead of buying in the hope prices will fall even lower."

Isn' that utter madness though - Why gamble your family's future in that way? 

Have those "many people" calculated how far would prices need to fall to even break even after incurring all the costs of selling and rental costs for 2-5 years?!

Average London house price is now over £600,000

Say prices fall a modest 20%, that's £120,000

London property 'yields' (annual rent/price) are about 4% so the rent on a similar property will be about £24,000 per annum.

You a similar house at £480,000 after two years. SDLT is £24k.

To be conservative we'll assume that you owned outright.

You're up £48,000 before fees (e.g. survey, to estate agent on sale, removals, to letting agency on tenancy).

Looks like a pretty good punt to me.

If all we get is London backing out the gains it's made since the 2012 then we're down about 40%.

Now 40% of £600k is about £240k, so your pay out before fees is £168,000.

[Edit: Screwed up by not allowing 2 years rent]

 

Edited by Bland Unsight

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2 minutes ago, Bland Unsight said:

To be conservative we'll assume that you owned outright.

We could also assume that you are on an interest-only mortgage having bought at 85% LTV in January 2007. You paid about £300k. Your mortgage is £255k and you don't have the income to refinance onto repayment terms so you're a 'mortgage prisoner' on the SVR of about 4%. Hence your annual bill for renting from the bank is about £6k. Hence the £24k per annum rent should be considered net of the £6k meaning it's only £18k. If your plan is to cut and run from your property nightmare and buy somewhere you can afford to finance on repayment terms before Father Time catches up with you then that's another incentive to jump ship from the London bubble if you think it is about to crash.

Worth noting that many interest-only 'mortgage prisoners' are in houses which they couldn't afford to buy when they bought them which they now couldn't afford to rent should they choose to sell them.

 

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1 hour ago, fuzzy_bear said:

I don't pay a subscription so don't have access to the whole article but could view enough to catch:

"As a result, many people are selling and then renting instead of buying in the hope prices will fall even lower."

Isn' that utter madness though - Why gamble your family's future in that way? 

Have those "many people" calculated how far would prices need to fall to even break even after incurring all the costs of selling and rental costs for 2-5 years?! 

 

 

For me, STR isn't about what is spend on rent, it's about not having debt and positioning for the future given my opinion on how things look.

Granted, there's a bit of hope built in. But I guess it's hope vs hope against those who hope they haven't bought near the top/aren't relying on selling their home for their future.

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1 hour ago, The Masked Tulip said:

The US market is already in big trouble. Hearing lots of stories on US housing sites of areas like NY, Boulder, etc, that were booming just 6 months ago now being stagnant.

Indeed, and flipping in these hotspots seems to have peaked too which is always a sure sign we're at the end of the HPI cycle.

Edited by Barnsey

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36 minutes ago, Barnsey said:

Indeed, and flipping in these hotspots seems to have peaked too which is always a site sign we're at the end of the HPI cycle.

 

Financial guy I follow in the US, Rick Ackerman, thinks that housing in the US has topped for a generation. He is expecting 70% falls and worse in the vacation home market.

http://www.kereport.com/2017/09/06/rick-ackerman-copper-gold-markets/

http://www.kereport.com/2017/09/13/usd-why-rick-thinks-we-could-see-120-on-the-usd-index/

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3 hours ago, fuzzy_bear said:

I don't pay a subscription so don't have access to the whole article but could view enough to catch:

"As a result, many people are selling and then renting instead of buying in the hope prices will fall even lower."

Isn' that utter madness though - Why gamble your family's future in that way? 

Have those "many people" calculated how far would prices need to fall to even break even after incurring all the costs of selling and rental costs for 2-5 years?! 

 

 

Two good reasons why they are doing that.....1. can still for the moment sell to get a reasonably good price if the chain doesn't break, time is of the essence. 2. due to low volumes of suitable homes best not be in a chain with something to sell (cash buyer) else high chance lose out on a good home at a good deal.;)

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3 hours ago, Bland Unsight said:

Worth noting that many interest-only 'mortgage prisoners' are in houses which they couldn't afford to buy when they bought them which they now couldn't afford to rent should they choose to sell them.

Nice point, succinctly put!

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3 hours ago, Bland Unsight said:

London property 'yields' (annual rent/price) are about 4% so the rent on a similar property will be about £24,000 per annum.

That yield figure is generous for the type of houses owned by the sell-to-renters that I'm guessing the Times had based its article on (ie in the know rich people). 

4% yield sounds right if we're talking about classic buy-to-let flats. 

But if we're talking central London houses think more like 3% and even below that for prime central London.

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11 minutes ago, Patient London FTB said:

That yield figure is generous for the type of houses owned by the sell-to-renters that I'm guessing the Times had based its article on (ie in the know rich people). 

4% yield sounds right if we're talking about classic buy-to-let flats. 

But if we're talking central London houses think more like 3% and even below that for prime central London.

I'll buy that. 

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3 hours ago, Patient London FTB said:

That yield figure is generous for the type of houses owned by the sell-to-renters that I'm guessing the Times had based its article on (ie in the know rich people). 

4% yield sounds right if we're talking about classic buy-to-let flats. 

But if we're talking central London houses think more like 3% and even below that for prime central London.

Reading the article in question now and bingo:

"Tim Harris, a buying agent [tick - in the know], recently sold his 4 bedroom family house in Wimbledon, for more than £1m [tick - rich] so the family could leave the capital. He tried to buy a house in Farnham but that fell through [ie this is not a purely speculative STR] so he decided to bide his time. He has rented a 5 bedroom property nearby for £2,500 per month."

£2,500 pm = £30k annual rent = 3% yield on a £1m house

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Another bearish quote: 

"Andy Hackett, an events company owner, put his 2 bed maisonette in Ealing on the market 2 years ago for £488,000 with F*xtons. He sold it last month through another agency Dexters for £442,000, and moved into a rental property in Islington.

'Everyone I know who buys property has stopped what they're doing for now,' he said.

'There are discounts to be had, it's just how far will it go.'

Edited by Patient London FTB

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Oh go on then, one more:

"Renting in London has become cheaper than buying, as yields have fallen from 5% to 2% in the past four years, according to Henry Sherwood, managing director of the Buying Agents."

Plenty more bear food in the article but won't post any more as conscious of pushing copyright a bit. 

 

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Yes, the Sunday Times is very bearish today.  

I particularly liked the saga of the woman who was advised to price her 'sprawling' North Oxford house for £9m, though it was valued at £8.4. She put it on for £7.5,m, subsequently reduced to £6.95m and then £5.95m - still no takers. Owner admits she has 'completely missed the market'.  

Elsewhere in Times property they are plugging the new development outside the Oxford ring road, towards Barton - which is the sort of place most buyers want to avoid.  They kindly tell us that anyone who can't afford to buy within the university city can pick up a new  3 bed here for £595k.  And very ugly  boxy houses they look too.  I'd have thought £595k decidedly  optimistic for that area outside the ring road, but with Help to Buy still sloshing the money around, who knows? 

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  • 293 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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