Tuesday, December 18, 2007

A Little Light Entertainment

THE TRUTH ABOUT THE PROPERTY MARKET

"Professional investors in any market act against the crowd. This is the opportunity to think like a professional investor and buy at a time of market pessimism, with a 10 to 15 year plan. What is more, rents will pretty much cover your mortgage straightaway with strong returns already being reported." Enjoy.

Posted by quiet guy @ 01:20 PM (2754 views)
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22 thoughts on “A Little Light Entertainment

  • It’s all a bit embarrassing.

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  • I feel one of Confused76’s chuckles coming on..

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  • Going for the Fool of the Decade award

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  • Oh come on bidin’matime – after three – HoHoHoHoHo
    You cannot blame them for trying to prop it up. After all, Assetz are just trying to make a living. The problem is, no one is buying his version of “the truth”.
    HoHoHoHo

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  • A professional investor would make his/her own mind up and pobably buy at the bottom of a slump. An ‘intellectual pillow’ investor who took the shape of the last person who slept on them, would buy in response to Assetz.

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  • The truth about smoking : it’s good for you!

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  • new user 2007 says:

    Is everything he said made up?
    Not all of it, but the parts that are not are distorted.

    Is Mr Law’s company similar to Northern Rock and Paragon?
    Yes. That is why he is so panicked. He is having tantrums all over the place (off his won site). As he was not such a media star before, I think the papers see him as novelty value.

    Are BTL investors so gullible?
    Not all of them. But all are greedy. This means the leverage that made them “rich” will work in reverse and they will sell quickly. More panic for Mr Law. He uses year on year, so a 200k flat last year is now worth 230k (his 8% growth) BUT compared with last month it is worth 224k (after the Rightmove fall). The greedy will think, ah, I have lost 6k already…that capital appreciation was meant to cover my rent subsidy and now it is gone. And more falls to come!

    Has rental growth matched the increase in mortgages required as capital appreciation has been so high?
    No. He says good opportunities to buy in coming months. Is he saying prices will fall? No, they will rise in a market of bargains. That seems inconsistent. But then he has also decided inflation is dead.

    What does the rest of the country know according to him?
    Nothing, apparently.

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  • Why do articles like this so frequently read as if the author lives on another planet?! Rental income covering mortgage costs… how come I cant find a single property to buy that doesnt require more than twice the monthly outgoing in mortgage payments compared to rent?!

    There is doing your best to prop up the market and there is total nonsense. I dare the author of such an article to find me a pleasant property in my locale where rent and mortage costs are equivalent. If so, I will buy it.

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  • bearshare1616 says:

    He states that,

    “There is a lot of speculation suggesting that a crisis in the property market is looming, and although much of this is based on unfounded claims and conjecture, the continued mutterings are running the risk of turning into a self-fulfilling prophecy”.

    So when YOY increases were above 20% in the early days of the boom this wasn’t driven by a self-fulfilling prophecy of unfounded claims and conjecture. Isn’t it funny that all of the factors that helped create the boom are now driving nails into it’s coffin.

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  • The guy is off his nut. His answer to the inflation question beggars belief.

    “Is inflation under control ?

    Competition between the supermarkets will keep inflation under control, oil prices are now dropping and average inflation for the last three months has been bang on target, at just below 2%. Clearly interest rates are now starting to lower following a sharp fall in inflation over the last few months.”

    SOOOOO, Thats why petrol is now over £1 a litre and diesel has risen so high, farmers staged a fuel protest only this weekend. Of course, this won’t effect us, because all our goods are delivered by a teleporter to the shops and all known delivery vehicles used by supermarkets are now non existent.

    The cost of a bushel of wheat has doubled in the space of a year, fuelling worldwide food price inflation and creating havoc in developing countries that depend on imported food.

    Staples such as wheat, eggs, milk and cheese have increased by up to 30% in price in just a year. One expert yesterday warned of more pain to come in the next few months. Prices of wheat and corn for delivery in March are already set at 4% above the cost of wheat and corn delivered this month.

    Howard Archer, chief UK economist at independent analysts Global Insight, said, “The era of food prices helping to hold down inflation has gone.
    I suspect there’s a bit more pain to come in the near term, and everyone will be hoping that next year brings decent weather for crops and cereals.”

    He predicted that 2008 would be “a difficult year for many consumers”. On top of rising food and fuel costs, energy bills were likely to rise again.

    Denbighshire baker Harvey Moore, whose Henllan Bread company supplies shops across North and Mid Wales, said, “The cost of flour is damn near double the price it was six or seven months ago.

    http://icwales.icnetwork.co.uk/news/wales-news/2007/12/18/staple-food-prices-soar-by-up-to-30-91466-20262857/

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  • Biggest load of bull I’ve read for a longtime

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  • Bigup the Assetz massive an ting, innit!

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  • Matthew_henson says:

    This kind of stuff ceases to amaze me, my wife and I have a rental property in London which was our home before we married. (we now now rent a £600,000 house for £1,350 a month as it cheaper that buying)

    Our mortgage on the flat is £62,000 with another 16 year to run (repayment) and which cost £620 a month to service and the flat raises us £700 a month rent, costs consume the profit although the tenant do cover the cost of the repayments . We are selling the flat and have accepted an offer at £197,000 which was a whopping £51,000 below the original asking price (we adviced reducing it!)

    That is a real life story of a rental property, so how the hell does any body make any money buying in the current market as Assetz are advocating, it does not make any financial sense and with prices set fall there is only risk.

    Stunning

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  • Matthew_henson says:

    I have no idea how anybody buying in to the BTL market thinks they will make money. My wife and I have a rental flat in London where we own 70% of the current property value (real value not the hyped 25% uplift value the estate agent suggested) and including costs we only break even (admitedly we have a repayment motgage) so how the hell does the BTL’er with a 90% interest only mortgage in a falling market expect to make anything but a loss

    Stunning

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  • Hey, this guy is doing sellers a favour – by suggesting its a good time for btlers to buy, some of the less educated ones might get the news they are hoping for, and buy up some properties that more savvy people want to offload sooner rather than later. The housing market is a zero sum game, for every winner there is a loser. At a time of descending prices (and equity) from the top of the market, it is better to be a seller trading down or a renter. But without a good pool of suckers to buy, then prices will drop far more rapidly. Maybe Mr Assetz wants to offload some property of his own…

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  • Banks won’t lend unless you have 125% rental cover. So you couldn’t become a new 95% geared BTL even if you wanted to. Ie most BTL can cover the mortgage payments as they are not geared to 95%. Even if the market falls they could still cover the mortgage payments but their paper wealth would take a battering.

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  • Mariothegreat says:

    I love the guy!
    he says:
    “Professional investors in any market act against the crowd.”
    True, in fact I bought in 97 when everyone said was wrong and I sold in 2005/6 when everyone says it was wrong…

    He says:
    “This is the opportunity to think like a professional investor and buy at a time of market pessimism, with a 10 to 15 year plan.”
    Yes, let me check with one of my flat, I bought it in 97 at 25.000 from the former owner that bought it at 50.000 ten years before me so in ten
    years he made a fantastic profit of minus 25.000… very good… never buy at the top, never sell at the bottom… dic..head

    he says:
    “What is more, rents will pretty much cover your mortgage straightaway with strong returns already being reported. ”
    That maybe is the more convincing assertion… if last year I would have bought a studio in MK I had to spend around 80/85K with a rent of around
    375 per month, unfortunately they are leasehold so you have to pay 600/1000 per year to pay the maintenance (that they do not make properly…) to the
    service company, ten per cent for the properties agency, so you still have 3500 pounds to spend in mortgage…. I don’t think you can…. btw , if you are lucky as I was
    to get a couple of tenants that destroyed your flat before to run without pay, still better…. and if the agency can rent straight away your flat without waiting a couple
    of months empty, and if you have not to pay for extra work in the pavement in front of the flat, and …
    Frankly if you want to be honest with a buyer you should say that from 4200 pounds of rent you can get maybe 2500/3000 (before tax)…. if you can buy any property
    that can achieve those rents spending 2500/3000 in mortgage…buy it.

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  • it_is_going_with_a_bang says:

    “buy at a time of market pessimism”

    Yes indeed maybe in a couple years by guessing the bottom of the market. But when the market is turning??
    Only a complete idiot would.

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  • talk about dilusional

    Any investment that is going down in price is rubbish.

    Plenty of demand for oil…so why did it drop to $9 in 1999 over a 20 year time period?

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  • its clear that all asset bubbles need to capitulate

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  • A lot of the more highly geared BTLers will be looking for a re-mortage soon, or they’ll be forced onto the lender’s standard variable rate. With BTL mortgage criteria tightening all the time and products disappearing they are going to be caught between the proverbial rock (NR?) and hard place. This also applies to all those unfortunate souls who took out 95% mortgages coupled with up to 30% unsecured loans on the residential purchases (as per N/Rock Together range).
    All these people may well find that there are no mortgage products available for them. This could be a mini bloodbath in a big bloodbath!

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  • george monsoon says:

    My wife and I own a nice little 3 bedroom house in the city, which we mortgaged for 50k the rental yield just covers the morgage, but Im due to make a deleriously, disgusting amount of money when I sell for 250k. yummy yummy….~~~~~~~Wake up George.. Wake up…..~~~~~~~~~~ “uh oh,, damn it was just a dream, and I am still without a house.

    Can people stop rubbing my nose in the brown stuff by posting their disgusting, profit margins on here.. just sell the bloody house, gloat a bit then f**k off out of the country with your ill gotten gains, I despise your kind.

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