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A Couple Of Points

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it seems that the boe cannot increase rates because the economy is not doing as well as we are led to believe by the govenment. on the other hand they cannot reduce rates to help the ailing economy because it would cause asset inflation(bubble) in the housing market.

is this a paradox or a paradime?(excuse the spelling)

as a matter of interest for those not incentral london. a very strange situation is occuring. have spoken to agents and have concluded a rather tricky point. london prices have been flat for the last three years, untill three months ago. so if you bought either to profit for a btl or just move up the ladder, you cant sell. there is no money to be made from selling,due to cost and taxes expences etc. so people are just not selling hence shortage of places to buy. tons of empty flats for rent,

so all the btlers are holding, they have to, to avoid a loss, thats the problem.

what to do?

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on the other hand they cannot reduce rates to help the ailing economy because it would cause asset inflation(bubble) in the housing market.

They haven't noticed then? :lol:

paradime?(excuse the spelling)

Paradigm ;)

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it seems that the boe cannot increase rates because the economy is not doing as well as we are led to believe by the govenment. on the other hand they cannot reduce rates to help the ailing economy because it would cause asset inflation(bubble) in the housing market.

is this a paradox or a paradime?(excuse the spelling)

as a matter of interest for those not incentral london. a very strange situation is occuring. have spoken to agents and have concluded a rather tricky point. london prices have been flat for the last three years, untill three months ago. so if you bought either to profit for a btl or just move up the ladder, you cant sell. there is no money to be made from selling,due to cost and taxes expences etc. so people are just not selling hence shortage of places to buy. tons of empty flats for rent,

so all the btlers are holding, they have to, to avoid a loss, thats the problem.

what to do?

It is neither a paradox nor a paradigm.

A paradox is something which sounds absurd but which is true. For example - talking to someone about driving in the UK you might say 'to be right, keep left'. That is a paradox.

A paradigm is an example or pattern. So, in a sense everything is a paradigm. People often say 'is there a new paradigm?' in the housing market, or economy etc. So there is no new paradigm. As long as I can remember governments have juggled with conflicting forces in the economy.

My experience of the London market is that properties are selling very quickly, often above asking price because of the shortage of properties on the market.

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so all the btlers are holding, they have to, to avoid a loss, thats the problem.

what to do?

Why is that a problem?

It is precisely that fact which supports the housing market and IMO will prevent any significant HPC.

It is not a problem for BTL's that they are holding, it's good for them. There are plenty of people who need to rent (influx of E.Europeans and the ever increasing numbers of FTB who cannot afford to buy). So the BTL mortgages are generally being covered. Why would any sensible BTL want to sell????

IN 10, 15, or whatever number of years the BTL will own a few properties paying for a pleasant retirement.

Easy.

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it is a problem.

most btlers bought to make money, not have tennents to deal with. most btlers have one maybe two properties and their own, and speeking to losts of them, tennents are a nightmare, and they are subbing the tennets to meet the out going on the flats.

that is why they want to sell. to make money.

there are people in for the long term, well thats what they tell you. and there are professional landlords, but most are not.

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it is a problem.

most btlers bought to make money, not have tennents to deal with. most btlers have one maybe two properties and their own, and speeking to losts of them, tennents are a nightmare, and they are subbing the tennets to meet the out going on the flats.

that is why they want to sell. to make money.

there are people in for the long term, well thats what they tell you. and there are professional landlords, but most are not.

Of course its a "nightmare", and thats why the landlords are being paid x pounds every month by the tenants, and earning the capital increase on their properties.

There has to be an element of effort to get the reward.

When those BTL's are laying on a beach in the not too distant future sipping a g&t paid for with their BTL houses, the effort will be a distant memory.

Edited by Dubai Exile

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Of course its a "nightmare", and thats why the landlords are being paid x pounds every month by the tenants, and earning the capital increase on there properties.

There has to be an element of effort to get the reward.

When those BTL's are laying on a beach in the not too distant future sipping a g&t paid for with their BTL houses, the effort will be a distant memory.

Of course, if their mortgages doubled due to interest rate hikes, no tenants could afford the rent, and they got into major negative equity & financial difficulties, they may be laying in the gutter sipping meths paid for with their begging proceeds, and their bakruptcy will continue to haunt them.... ;)

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Of course its a "nightmare", and thats why the landlords are being paid x pounds every month by the tenants, and earning the capital increase on there properties.

Not counting the ones who are paying 1500 a month to the bank for their empty 'executive apartment' which is dropping in value day by day...

Also, house price inflation is hardly 'earnt'.

Edited by MarkG

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it seems that the boe cannot increase rates because the economy is not doing as well as we are led to believe by the govenment. on the other hand they cannot reduce rates to help the ailing economy because it would cause asset inflation(bubble) in the housing market.

I'd have thought lowering the interest rates to help the economy would have very little effect due to the carry trade from Japan (and even Switzerland). If the economy needs cheap money it can get it elsewhere. Private mortgages, however, come from our own interest rates.

Might as well raise the rates, the negative effect on the economy would be marginal but the positive effect on the housing asset bubble might actually be enough to make a difference.

MattLG

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My experience of the London market is that properties are selling very quickly, often above asking price because of the shortage of properties on the market.

'Spring In The Air' just by chance are you an EA ?

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it seems that the boe cannot increase rates because the economy is not doing as well as we are led to believe by the govenment. on the other hand they cannot reduce rates to help the ailing economy because it would cause asset inflation(bubble) in the housing market.

The BoE can't reduce rates because inflation is at target and predicted to go above target. With current high oil prices there is a lot of inflation building up in the system, slightly contained at the moment as companies are absorbing the costs - but for how long?

Also reducing rates would weaken the pound - more imported inflation.

I don't think the main reason the BoE is not reducing rates is to avoid further house price inflation

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London has a steady and increasing net instream of renters - so provided that continues (and no reason it won't) then that's not the problem.

The market in prime London has been flat since 2002 - with exceptions obviously and people dived on BTL earlier than the rest of the UK - since then there has been an enormous amount of house price explosion outside of prime London - the wages are lower to service the debts and people have assumed that prices will continue to rise and they have piled into executive apartments where quite frankly, there are no executives... - they will lose and are finding liquidity difficult. Surprise surprise, if something looks too good to be true.....

That London market has now been so depressed that the rest of the UK is not far behind it in terms of asking prices so it's set off again as people in London have realised that a BTL flat in City Centre Manchester (e.g.) is a sodding disaster to get rid of.

I got sent specs on executive duplex apartment in development for Barrow in Furness and Carlisle - FFS - on talking to the developer (not the agent) the pre-sales have been to BTLers who don't understand that a market trader there may deal in commodities, but not what they think...

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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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