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grim up north

Causes Of Hpi In Ftb Properties

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First topic I have started, but this came to me today on my way in to work and thought I'd share it with you.

I was wondering why FTP properties in Sheffield have gone from about £40,000 or less to about £125,000 in the last 5 years. (I bought in at about the 65k level and sold out at the 110k on a couple of BTL, profits from which are in my warchest for the coming HPC)

Reasons for the rise

1. Low IR.

2. Easing of lending criteria.

3. Increased student population making BTL more attractive.

4. The City Living effect - basically the first ones that sprung up were almost double the price of a typical terraced house. This made the houses seem cheap, and 'persuaded' people that they must be worth more.

5. Property TV programmes with a get rich quick/money for nothing message.

6. Increase in stamp duty threshold from 60k to 120k and then 125k.

I think the last point has had a massive effect. In a rising market, the stamp duty threshold creates a kind of ceiling to a lot of people.

Reasons for the coming fall

1. Increasing IR

2. Tightening of lending criteria.

3. 1000's of purpose built flats coming on stream that students prefer due to better location and amenities. Landlords will get increasing voids/rents will fall (eg 4 students at £250pcm each will be replaced by FTB couple (who can't afford to buy) at £500pcm

4. As City Living flats drop in value, houses may seem a bit on the expensive side. 120k for a 2 bed terrace needing a bit of work or 80k (a fair price in my opinion) for a spanking 2 bed flat (probably bought off a bankrupt buy to let-er)

5. The end of the Property programme era.

6. In a falling market, stamp duty is no longer a ceiling because other things such as affordability, fear, IR etc etc become more important.

There it is - its what I'm basing my actions on.

:)

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6. Increase in stamp duty threshold from 60k to 120k and then 125k.

Interesting point about stamp duty. Good example of how a move to "help FTBs" achieved the exact opposite. Especially the stupid move from £120 to £125K which just added £5K to the asking price of thousands of properties overnight. :blink:

Having said that you haven't been able to get FTB stuff in London for a long time and it hasn't stopped FTB properties rising.

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Yes, its funny that its better to pay £125,000 + no stamp duty after the change than £121,000 + £1,210 stamp duty before the change.

As a herd, people are stupid. I like it. It creates opportunities for anyone with a bit of intelligence.

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First topic I have started, but this came to me today on my way in to work and thought I'd share it with you.

I was wondering why FTP properties in Sheffield have gone from about £40,000 or less to about £125,000 in the last 5 years. (I bought in at about the 65k level and sold out at the 110k on a couple of BTL, profits from which are in my warchest for the coming HPC)

Reasons for the rise

1. Low IR.

2. Easing of lending criteria.

3. Increased student population making BTL more attractive.

4. The City Living effect - basically the first ones that sprung up were almost double the price of a typical terraced house. This made the houses seem cheap, and 'persuaded' people that they must be worth more.

5. Property TV programmes with a get rich quick/money for nothing message.

6. Increase in stamp duty threshold from 60k to 120k and then 125k.

I think the last point has had a massive effect. In a rising market, the stamp duty threshold creates a kind of ceiling to a lot of people.

Reasons for the coming fall

1. Increasing IR

2. Tightening of lending criteria.

3. 1000's of purpose built flats coming on stream that students prefer due to better location and amenities. Landlords will get increasing voids/rents will fall (eg 4 students at £250pcm each will be replaced by FTB couple (who can't afford to buy) at £500pcm

4. As City Living flats drop in value, houses may seem a bit on the expensive side. 120k for a 2 bed terrace needing a bit of work or 80k (a fair price in my opinion) for a spanking 2 bed flat (probably bought off a bankrupt buy to let-er)

5. The end of the Property programme era.

6. In a falling market, stamp duty is no longer a ceiling because other things such as affordability, fear, IR etc etc become more important.

There it is - its what I'm basing my actions on.

:)

BTL v FTB should be major issue amongst those with an eye on the FTB market. Nearly 750K properties gone into BTL ownership over the past 3 years...

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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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