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Rics Call For End Of Btl'er New Build Discounts

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They asked for priced out ftb's / viewers comments for follow up later in program

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http://news.bbc.co.uk/1/hi/programmes/brea..._us/1818774.stm

# By phone

Our telephone information line is open from 7.30am to midnight, seven days a week. The number is 08707 878787

# By e-mail

This link sends an e-mail direct to the Breakfast inbox: breakfasttv@bbc.co.uk

Basically, Royal Institute for Chartered Surveyors was interviewed calling for contols on the discounts given to professional property investors, who are given discounts of up to 25% by new build house builders.

Ftbs are not given such discounts, (although they may get deposit paid or similar) so there is no level playing field.

Lenders, Portland were interviewed, and said they would not fund btl'ers due to these discounts.

Edited by Saving For a Space Ship

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They asked for priced out ftb's / viewers comments for follow up later in program

Contact

http://news.bbc.co.uk/1/hi/programmes/brea..._us/1818774.stm

# By phone

Our telephone information line is open from 7.30am to midnight, seven days a week. The number is 08707 878787

# By e-mail

This link sends an e-mail direct to the Breakfast inbox: breakfasttv@bbc.co.uk

Basically, Royal Institute for Chartered Surveyors was interviewed calling for contols on the discounts given to professional property investors, who are given discounts of up to 25% by new build house builders.

Ftbs are not given such discounts, (although they may get deposit paid or similar) so there is no level playing field.

Lenders, Portland were interviewed, and said they would not fund btl'ers due to these discounts.

The market is always a level playing field. All the FTB needs to do is put on his/her BTLer hat and buy buy buy---quick before the yields drop even further!

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The market is always a level playing field. All the FTB needs to do is put on his/her BTLer hat and buy buy buy---quick before the yields drop even further!

The market has certainly levelled playing fields for building cr@ppy new build hutches. :D

EDIT: They just announced that the follow up will be on shortly

They just had something about a new theory of 'consumer regret' where you buy something you later wish you hadn't.

One of the defining images of the last crash for me was the tv doc of a Tower Bridge 1 bed off plan buyer, who bought for £175K & had to sell for £95K, he kept repeating ' if only I had not gone into that showroom that day' 'if only'.

Like a tortured mantra, which caught him in a loop of regret.

Edited by Saving For a Space Ship

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Follow up on now

Edit: they repeated the previous report & then gave the show over to a 'property expert' who basically turned it into a bit of a new build ramping exercise by saying that developers were judged on selling quantity of units, not just profits.

She sugested FTB's doing research on developers co's accounts year end and putting in a 'silly offer' as they have to sell them.

They gave virtually no coverage to the emails /phone in's :angry: apart from saying discounts were often given in more undesirable areas

Edited by Saving For a Space Ship

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Basically, Royal Institute for Chartered Surveyors was interviewed calling for contols on the discounts given to professional property investors, who are given discounts of up to 25% by new build house builders.

RICS dislike submarine discounting because it makes there own members look like idiots in a stagnant or falling market. If a RICS member values a new build at asking price when the buyer has a 25% discount then they have just overvalued the property by 25%.

The mortgage lender may for example allow the deal to go through at 80% of the RICS valuation, the problem therein is that lender thinks there is a 20% equity cushion when in reality the deal is 105% LTV. Submarine discounting increases the risk to lender as they do not know the true transaction value or market value of the property which is what the valuation was supposed to indentify.

This isn't as it was spun discounts bad for FTB rather discounts bad for RICS and mortgage lenders. It is quite possible for FTB's to get the same level of discounts they just have to haggle rather than pay advertised price, think of new homes as being like new cars sure some people will just pay the list price but smarter buyers negotiate sizeable discounts.

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Basically, Royal Institute for Chartered Surveyors was interviewed calling for contols on the discounts given to professional property investors, who are given discounts of up to 25% by new build house builders.

Ftbs are not given such discounts, (although they may get deposit paid or similar) so there is no level playing field.

Lenders, Portland were interviewed, and said they would not fund btl'ers due to these discounts.

I have felt for a while that the price that private buyers get quoted for houses is really a retail price and that professional BTL and or professional developers will only pay wholesale. By definition the professional buyer needs a discount in order to be able to sell later to a private buyer at a retail premium and make a profit.

I think that part of reason that I and many others on HPC find it so difficult to buy a house is because we just refuse to pay the retail premium. I regularly find, that when I value houses a 25- 35% discount from the current asking price is exactly what I need to make it a sensible purchase.

As Americans often say "You paid Retail - are you nuts?"

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RICS dislike submarine discounting because it makes there own members look like idiots in a stagnant or falling market. If a RICS member values a new build at asking price when the buyer has a 25% discount then they have just overvalued the property by 25%.

The mortgage lender may for example allow the deal to go through at 80% of the RICS valuation, the problem therein is that lender thinks there is a 20% equity cushion when in reality the deal is 105% LTV. Submarine discounting increases the risk to lender as they do not know the true transaction value or market value of the property which is what the valuation was supposed to indentify.

This isn't as it was spun discounts bad for FTB rather discounts bad for RICS and mortgage lenders. It is quite possible for FTB's to get the same level of discounts they just have to haggle rather than pay advertised price, think of new homes as being like new cars sure some people will just pay the list price but smarter buyers negotiate sizeable discounts.

Thanks for that thorough explanation. I was curious as to why RICS & the lender were making a fuss at this late stage in the cycle, as this discounting had been going on for years.

I was going to fire a complaint letter off to the BBC (for what its worth) about the article having 3 property VI's (one an unspecified 'property expert') with no independant representaives or opposing views.

Also the fact that they called for emails & phone calls from viewers, but failed to mention any specific point apart from one vague one, missing an opportunity to make it more balanced.

Now I can include your point as well, cheers.

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They asked for priced out ftb's / viewers comments for follow up later in program

Contact

http://news.bbc.co.uk/1/hi/programmes/brea..._us/1818774.stm

Basically, Royal Institute for Chartered Surveyors was interviewed calling for contols on the discounts given to professional property investors, who are given discounts of up to 25% by new build house builders.

Ftbs are not given such discounts, (although they may get deposit paid or similar) so there is no level playing field.

Lenders, Portland were interviewed, and said they would not fund btl'ers due to these discounts.

lol and you believe that in finance there is no ethics when it comes to money.

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