buytoilet Posted February 16, 2008 Share Posted February 16, 2008 The total number of people buying homes has fallen to its lowest level in fourteen years and Connells Survey & Valuation data suggests that Buy to Let has suffered more than most. This sector has seen its share of the purchase market fall from 15% this time last year to just 11% at the start of 2008. Rental yields are not performing as well as other forms of investment and the incentive to invest relies on the long term capital gain available. Falling off a cliff Quote Link to comment Share on other sites More sharing options...
right_freds_dead Posted February 16, 2008 Share Posted February 16, 2008 thats still a considerable number of stiffs going to get stiffed. Quote Link to comment Share on other sites More sharing options...
Methinkshe Posted February 16, 2008 Share Posted February 16, 2008 The total number of people buying homes has fallen to its lowest level in fourteen years and Connells Survey & Valuation data suggests that Buy to Let has suffered more than most. This sector has seen its share of the purchase market fall from 15% this time last year to just 11% at the start of 2008. Rental yields are not performing as well as other forms of investment and the incentive to invest relies on the long term capital gain available. Falling off a cliff Exactly so! Which is why the btl market pulled in so many greater fools even after rental yields had turned negative. Out they came with the old chestnut - I'm in it for the long term or, more accurately, for the capital gain. House prices only ever rise in the long term, dontchaknow? Except sometimes the long term is so long that you're dead before it materialises, as in the Florida property crash of 1923 when it took 40 years for house prices to recover their pre-crash value. Quote Link to comment Share on other sites More sharing options...
Nomadd Posted February 16, 2008 Share Posted February 16, 2008 The total number of people buying homes has fallen to its lowest level in fourteen years and Connells Survey & Valuation data suggests that Buy to Let has suffered more than most. I can't understand why? Rental demand is very strong, rents are high - and climbing, capital gains on property are 20% plus per year, and property always goes up in the long term. I've just bought an extra 10 flats in Central Manchester, as prices at these low levels can't be maintained much longer. And when the BBC gets here, I'll have doubled my money in less than 4 years. And in the interim, some mug of a "renter" will have paid off the entire mortgage for me. I wouldn't mind - I've never even visited Manchester! (Although to be fair, my Agent has, and he tells me it's very nice: awash with rich students, climbing over themselves to rent executive flats.) The only problem I can see is that there just aren't enough properties available for purchase. Thank god an extra 10,000 flats are being built in the next 12 months - I mean, I don't want my cash wasting away in a savings account, do I! Cheers, Nomadd (Oh, and ) Quote Link to comment Share on other sites More sharing options...
redwing Posted February 16, 2008 Share Posted February 16, 2008 Ross Bowen from Connells: "The housing market remains quiet and the MPC must remain focused to stimulate growth. In spite of a boost of 3% in January's mortgage approvals, last month's figure is the weakest January since Bank of England records began in 1994. Year on year, activity has seen a drop of nearly 40%. The total number of people buying homes has fallen to its lowest level in fourteen years and Connells Survey & Valuation data suggests that Buy to Let has suffered more than most. This sector has seen its share of the purchase market fall from 15% this time last year to just 11% at the start of 2008. Rental yields are not performing as well as other forms of investment and the incentive to invest relies on the long term capital gain available. Then the idiot goes on to say this.... "Having said that, this is just one month’s numbers and a formal trend is yet to emerge." WTF is a formal trend? Can't he see the trend embedded in his own analysis - the bits I've put in bold? Quote Link to comment Share on other sites More sharing options...
gravity always wins Posted February 16, 2008 Share Posted February 16, 2008 Except sometimes the long term is so long that you're dead before it materialises, as in the Florida property crash of 1923 when it took 40 years for house prices to recover their pre-crash value. Interesting any links? Forty years now thats patience. Quote Link to comment Share on other sites More sharing options...
bleakhouse Posted February 16, 2008 Share Posted February 16, 2008 Ross Bowen from Connells:"The housing market remains quiet and the MPC must remain focused to stimulate growth. In spite of a boost of 3% in January's mortgage approvals, last month's figure is the weakest January since Bank of England records began in 1994. Year on year, activity has seen a drop of nearly 40%. The total number of people buying homes has fallen to its lowest level in fourteen years and Connells Survey & Valuation data suggests that Buy to Let has suffered more than most. This sector has seen its share of the purchase market fall from 15% this time last year to just 11% at the start of 2008. Rental yields are not performing as well as other forms of investment and the incentive to invest relies on the long term capital gain available. Then the idiot goes on to say this.... "Having said that, this is just one month’s numbers and a formal trend is yet to emerge." WTF is a formal trend? Can't he see the trend embedded in his own analysis - the bits I've put in bold? Well now, if the yoy activity has dropped 40pct and btl is only 11 pct of that instead of 15pct there aint much btl activity. I am not surprised. Quote Link to comment Share on other sites More sharing options...
Methinkshe Posted February 16, 2008 Share Posted February 16, 2008 Interesting any links?Forty years now thats patience. The info comes from Robert Beckman's book, Crashes. I have laboriously typed out a quote from his chapter on The Great Property Crash. Can't remember which thread I posted it on, though. A search under my user name and Florida should find it. BTW, it is a good book if you want a very readable insight into some of the great crashes of the past few centuries. No crash is ever the same as the previous one, but there are definite similarities. History always has something to teach. Years ago I used to susbscribe to Robert Beckman's monthly publication - Investors' Bulletin - I wasn't an investor, but I found it extremely informative to view the world through the eyes of an investor. When money is at stake, global and local events are interpreted quite differently and often more accurately and realistically than when news is dispensed via the medium of newspapers and TV. Quote Link to comment Share on other sites More sharing options...
starsign Posted February 16, 2008 Share Posted February 16, 2008 hmmm..."fall off a cliff" = from 15% to 11%? Quote Link to comment Share on other sites More sharing options...
Methinkshe Posted February 16, 2008 Share Posted February 16, 2008 hmmm..."fall off a cliff" = from 15% to 11%? So what percentage fall is that? From 15% to 11%? Seems like a pretty steep drop to me. Cliff faces don't have to be vertical to qualify as cliffs, you know. Precipitous drops are often heralded by a steeper than usual decline. Quote Link to comment Share on other sites More sharing options...
starsign Posted February 16, 2008 Share Posted February 16, 2008 So what percentage fall is that? From 15% to 11%? Seems like a pretty steep drop to me. Cliff faces don't have to be vertical to qualify as cliffs, you know. Precipitous drops are often heralded by a steeper than usual decline. you seem to be mixing what has happened with the future...otherwise how do you explain cliff faces not being vertical? I was commenting only on what has been reported, and I guess I thought the figure would be dramatically lower than 11%. That's a vertical dramatically lower, by the way. Quote Link to comment Share on other sites More sharing options...
Methinkshe Posted February 16, 2008 Share Posted February 16, 2008 (edited) you seem to be mixing what has happened with the future...otherwise how do you explain cliff faces not being vertical?I was commenting only on what has been reported, and I guess I thought the figure would be dramatically lower than 11%. That's a vertical dramatically lower, by the way. A vertical cliff face in this analogy would equate to a sudden 100% fall from x to nil. No-one is speaking of that. The metaphorical cliff face alludes to an unusually steep drop such as is represented by a fall from 15% to 11% of market share. Edited for clarity. Edited February 16, 2008 by Methinkshe Quote Link to comment Share on other sites More sharing options...
christhpc Posted February 16, 2008 Share Posted February 16, 2008 A 27% drop in one year sounds pretty steep to me. Quote Link to comment Share on other sites More sharing options...
redwing Posted February 16, 2008 Share Posted February 16, 2008 (edited) The report is about the number of mortgages arranged. And I believe from the article that the percentages mentioned relate to those arrangements. The fall for BTL is the fall in their share of the market. i.e. share falls from 15% to 11%. So, for an imaginary 100 mortgages arranged in Jan 2007, 15 were for BTL January 2008 and mortgages arranged are down 40% i.e. there were 60 arranged instead of 100. BTL share has fallen to 11% and 11% of 60 is 6.6 mortgages arranged. In other words the number of mortgages for BTL in the period dropped from 15 to 6.6. That means the quantity of BTL mortgages arranged has more than halved. Looks like a cliff to me. The 27% that Chris mentions above is by looking at the fall in share (from 15% to 11%). But if you look at the change in numbers of BTL mortgages arranged it's more like (15-6.6)/15 = 56% fall. Edited February 16, 2008 by redwing Quote Link to comment Share on other sites More sharing options...
Ethel Posted February 16, 2008 Share Posted February 16, 2008 I can't understand why? Rental demand is very strong, rents are high - and climbing, capital gains on property are 20% plus per year, and property always goes up in the long term. I've just bought an extra 10 flats in Central Manchester, as prices at these low levels can't be maintained much longer. And when the BBC gets here, I'll have doubled my money in less than 4 years. And in the interim, some mug of a "renter" will have paid off the entire mortgage for me. I wouldn't mind - I've never even visited Manchester! (Although to be fair, my Agent has, and he tells me it's very nice: awash with rich students, climbing over themselves to rent executive flats.) The only problem I can see is that there just aren't enough properties available for purchase. Thank god an extra 10,000 flats are being built in the next 12 months - I mean, I don't want my cash wasting away in a savings account, do I!Cheers, Nomadd (Oh, and ) CASH??? Since when did BTLers use cash - most of the fools just use MEW. (Still thought it was a hilarious post though) Quote Link to comment Share on other sites More sharing options...
christhpc Posted February 16, 2008 Share Posted February 16, 2008 But if you look at the change in numbers of BTL mortgages arranged it's more like (15-6.6)/15 = 56% fall. Nice! Cheers for fleshing out my slightly lazy observation. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted February 16, 2008 Share Posted February 16, 2008 Id recommend a book about this phenomena Over the cliff, by I Loan Dover Quote Link to comment Share on other sites More sharing options...
Methinkshe Posted February 16, 2008 Share Posted February 16, 2008 Id recommend a book about this phenomenaOver the cliff, by I Loan Dover Are you sure the author wasn't I.Len Tover? Quote Link to comment Share on other sites More sharing options...
yellerkat Posted February 16, 2008 Share Posted February 16, 2008 Are you sure the author wasn't I.Len Tover? Or even Eileen Dover? Oh dear time for the pub I think. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted February 16, 2008 Share Posted February 16, 2008 Or even Eileen Dover?Oh dear time for the pub I think. no, I thought the dovers wrote the book, screw the borrowers by Ben Dover and Phil Mcafferty Quote Link to comment Share on other sites More sharing options...
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