Jump to content
House Price Crash Forum
red

Btls Bailing Out

Recommended Posts

Dinner party with friends last week revealed that they were looking for a bigger house,, what with a baby on the way...but they can't afford the up-size. They've finally realised how HPI can hurt.

They also have a BTL flat, kept on from when they both lived seperately. I urged them to sell it a year ago, but they wanted to keep it as a 'pension.' What amazed me was when they revealed that they had been subsidising it to the tune of £100 per month and since the IR rises have kicked in, they're now forking out £200 per month on top of their rental income just to pay the mortgage!

They put it on the market last month - no takers. Add to this recent turmoil in money markets and the credit crunch well under way, can we safely say the BTLs have missed the boat when it comes to cashing in on what has been an incredible bull run?

Share this post


Link to post
Share on other sites

Here here. If they hadn't kept the flat with the intention of making money at the expense of priced out FTBs, they probably wouldn't be in the predicament they find themselves in now. They've made their bed, and now they can lie in it.

Share this post


Link to post
Share on other sites

I could be wrong (it has been known), but I feel we have turned some kind of corner, nobody could have missed

the recent stock market turmoil, this has brought to peoples attention that the housing market in the USA is in trouble

and that we maybe next. Anybody who has a house they could sell must be thinking about it, but they have left it too late,

once everybody is in possession of the full facts they wont buy. Its only in the last couple of years when everything looked

rosey to the ill informed, that it was possible to sell.

Share this post


Link to post
Share on other sites
Dinner party with friends last week revealed that they were looking for a bigger house,, what with a baby on the way...but they can't afford the up-size. They've finally realised how HPI can hurt.

They also have a BTL flat, kept on from when they both lived seperately. I urged them to sell it a year ago, but they wanted to keep it as a 'pension.' What amazed me was when they revealed that they had been subsidising it to the tune of £100 per month and since the IR rises have kicked in, they're now forking out £200 per month on top of their rental income just to pay the mortgage!

They put it on the market last month - no takers. Add to this recent turmoil in money markets and the credit crunch well under way, can we safely say the BTLs have missed the boat when it comes to cashing in on what has been an incredible bull run?

I understand what you say about your friends hanging onto property,i know several people who are hanging on to property for the same reason, all believing that property allways goes up (does in the long term) but when you start subsidising the rent to pay the mortgage it becomes costly when you have to do it for several years as was the case in the last house price correction.

As for selling now if they put it now they may drop lucky and get a buyer, But i have noticed a lot of BTL propertys coming on the market in my area.

Share this post


Link to post
Share on other sites
Dinner party with friends last week revealed that they were looking for a bigger house,, what with a baby on the way...but they can't afford the up-size. They've finally realised how HPI can hurt.

They also have a BTL flat, kept on from when they both lived seperately. I urged them to sell it a year ago, but they wanted to keep it as a 'pension.' What amazed me was when they revealed that they had been subsidising it to the tune of £100 per month and since the IR rises have kicked in, they're now forking out £200 per month on top of their rental income just to pay the mortgage!

They put it on the market last month - no takers. Add to this recent turmoil in money markets and the credit crunch well under way, can we safely say the BTLs have missed the boat when it comes to cashing in on what has been an incredible bull run?

There has been a lot of mockery of STR's on this site, especially as London prices have soldiered on upwards at absurd rates. But the only people who ever make money out of a bubble are those that cash in early, before the top, before the burst. After the burst selling is impossible without a substantial drop in the selling price.

Share this post


Link to post
Share on other sites
Guest vicmac64
I could be wrong (it has been known), but I feel we have turned some kind of corner, nobody could have missed

the recent stock market turmoil, this has brought to peoples attention that the housing market in the USA is in trouble

and that we maybe next. Anybody who has a house they could sell must be thinking about it, but they have left it too late,

once everybody is in possession of the full facts they wont buy. Its only in the last couple of years when everything looked

rosey to the ill informed, that it was possible to sell.

absolutely on the ball - its 'sentiment' that will rule from here on in - markets tomorrow will prove it - no matter how much money they throw at the problem it will only get worse!!

Share this post


Link to post
Share on other sites
There has been a lot of mockery of STR's on this site, especially as London prices have soldiered on upwards at absurd rates. But the only people who ever make money out of a bubble are those that cash in early, before the top, before the burst. After the burst selling is impossible without a substantial drop in the selling price.

Once you get one of two repossesions in close proximity to where you live prices really dropped, I experienced this in the last crash. We had access to very little data then, but people have acces to all the data they need now, e.g price last sold etc, seach facilities etc. Its worse in you are in an appartment these tend to be the worst for repossesions hence what we saw recently in Colchetsre you could loose 100K overnight on valuation from 245K to 145K.

Share this post


Link to post
Share on other sites

Property prices may be quite sticky downward at first as most will hang on to their 'home' as long as they can pay the mortgage, only when the layoffs begin do they have to eat the loss, or get repossesed.

BTL however may be more willing to get shut quickly, didn't have so much of that last time around so goodness knows what sort of effect that will have. Freinds of mine have BTL property and I think that as long as they can service the mortgages they will hang on to the death hoping for an uptick.

New realities take ages for people to accept.

For a lot it's about the 'weekly', the never mind the yeild/price/earnings stuff. ' What does it cost a week?' that's as far as their financial questions go. If they can pay it now, well that's it then.

Share this post


Link to post
Share on other sites
Anybody who has a house they could sell must be thinking about it, but they have left it too late, once everybody is in possession of the full facts they wont buy.

Either that or when the credit crunch tightens to the extent that people can't get the mortgage to buy even if they want to.

Share this post


Link to post
Share on other sites

........part of the problem we face is that people tend to judge the current state of the housing market based on 'what happened last time'. Therefore people that STRed in 2005 or 2006 were most likely using data from the last time (early 90's) to calculate the top of the market (in terms of house price to earnings ratios etc). We know that in every boom/bubble that it will implode at some point in time but we also know that it will implode differently each time. It is generally accepted that the last time it was the phasing out MIRAS that tipped the balance from a sellers market to a buyers market in a short space of time and the contagion spread from that point.

The housing market seems to have been finely balanced over the last couple of years with the government/banks injecting enough cash to keep the population hard-wired to HPI. Now imagine that the government hadn't phased out MIRAS, is it not likely that the housing bubble would have continued for another year or two? Those that STRed early have provided the HPIers with further ammo as it appears they have been proved wrong, so they have been able to push house prices up to ridiculous levels in the belief that it is different this time. What we are witnesing this time is what would have happened last time had MIRAS never have been introduced and as the bubble has been inflated to a far greater extent than the last time the fallout will be equally great.

Share this post


Link to post
Share on other sites
Either that or when the credit crunch tightens to the extent that people can't get the mortgage to buy even if they want to.

How will banks make money if they do not offer fresh loans?

Share this post


Link to post
Share on other sites
How will banks make money if they do not offer fresh loans?

They will continue to make fresh loans, but much, much more carefully, and not the crazy amounts that have been flung around lately. They will want to know 100% that the loan is 'A1' and almost certain to be repaid.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 355 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.