Wednesday, April 2, 2008

Yet more grist to the mill…

Buy-to-let properties to flood market as investors cash in

Chickens. Home. Roost.

Posted by mark wadsworth @ 12:28 PM (1544 views)
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21 thoughts on “Yet more grist to the mill…

  • Expect to see a rise in asking prices reported by estate agents and mortgage lenders in the coming month. Asking prices will continue to rise, as EA’s encourage sellers to accept lower offers, but still get what they want from the sale. Buyers will still be being ripped off, unless they can secure a minimum 25% drop on asking..

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  • If there is not a rush to sell by BTLers then we can safely say there will be no crash, just a gradual decline. Lets see what happens….

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  • Given the time it takes to sell a property, we should have seen the ‘rush’ by now as it is the point of sale that initiates the potential tax liability.

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  • Expect to see a rise in asking prices reported by estate agents and mortgage lenders in the coming month.

    It all depends how keen people are to sell. If desparate, bargains may be had. The problem is that there still is a massive belief in the idea that ”house prices will only ever go up”.

    As time goes by, and if the present situation continues, prices will make big drops…..seriously tho, I think we are looking at next year before the 25% reductions will be seen.

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  • mark wadsworth says:

    I have compiled a list of mortgage lenders who are no longer lending money to the people who are expected to buy all these properties. If anybody knows any more off-hand, can you post them in the comments here? Thanks in advance.

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  • This looks like a warning shot from the well known property bear Daniel Thomas.

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  • new user 2007 says:

    Cornish.

    Most BTL are not sophisticated to have realised that. Most, even the “in it for the long term” BTL are not even aware that the leverage they boast about also works against them with the same ferocity.

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  • Seems like a coordinated attempt by banks and government to encourage HPC to me. All must know what will happen if the market is suddenly flooded for tax incentives.
    Can anyone help my thinking here ?

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  • planning4acrash says:

    Mark. Your list would be better off put into HPC wiki.

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  • As prices drop, less stamp duty and capital gains tax for HMRC, more tax elsewhere? Can BTLers claim capital loss tax rebates?

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  • I think we need forced sales before prices will come down. It’s sad to say it but it doesn’t matter how absurd house prices get, so long as there is a bigger idiot around the corner, and the majority of people can still make their monthly payments. Things are pushed to the edge now and I certainly can’t imagine any way they can “kick start|” house price rises again, but until people are forced to sell I don’t see prices coming down. With BTLs not buying as much as they did and property developers drying up I think there will be stagnation. It’s pretty obvious that there is going to be a recession soon, and that will mean redundancies and forced sales and then price falls, but I think that will take quite a few more months to feed through.

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  • The BTLers priced out the FTB’s – and not by a small margin.

    The FTB’s now have to make do with lower income multiples and lower LTV’s – so there will be hardly any players from that camp.

    Meanwhile, the smart money knows that the game is up.

    How long will it take for the penny to drop in the BTL camp that when the next Allsop auction of flats takes place, the guys in the long black coats will be thinking “50% off – or nothing”

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  • “so long as there is a bigger idiot around the corner”

    I suspect we are now fresh out of them – or at least, none that can find the money..

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  • crash bandicoot says:

    inbreda, the forced sellers will be the people coming to the end of their fixed rate terms with a 100% or more mortgage. They will have little option but to go onto the SVR and will not be able to afford it – if they could have afforded the mortgage in the first place then they would not have needed a 100%+ mortgage. A couple of months on the SVR should point this out to them.

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  • cb

    At the moment, most people coming to the end of a 2 yr 100% fix can renew at 90% or 95% if they don’t try to liberate any cash.

    However, as the year progresses we will start seeing many people coming to the end of a 2yr fix who are getting the same valuation – or a lower one – than that obtained two years before, leaving them unable to get a new deal.

    Some will suffer the SVR, but I suspect a significant number of recent entrants to the market will sell and go back to living with their parents, thereby further raising the excess supply in the market.

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  • 13. uncle tom said…
    “so long as there is a bigger idiot around the corner”

    I suspect we are now fresh out of them – or at least, none that can find the money..

    Wednesday, April 2, 2008 01:52PM

    There are 2 that I can think of with an UNLIMITED amount of money! GB and AD. LoL!

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  • I do apologise. My last post should have read:

    This looks like a warning shot from the well known property BULL Daniel Thomas; having bought at the top of the market last summer.

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  • mark wadsworth says:

    P4C, I would if I knew how. And assuming that there is such a thing as HPC Wiki.

    I know that I’ve seen dozens of articles about lenders withdrawing ‘products’ and increasing rates on this site, what really interests me is those lenders who have pulled down the shutters completely.

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  • mark, shame we don’t have a site like this in the UK

    The Mortgage Lender Implodometer

    Tracking the housing finance breakdown: a saga of corruption, hypocrisy, and government complicity.

    Since late 2006 – 246 major U.S. lending operations have “imploded”

    http://ml-implode.com/

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  • planning4acrash says:

    The wiki can be found on the top tabs on this very web page!

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  • Agree with cornishman, even in a ‘bull’ market it takes at least a month to sell a house, so there should have been more coming on last month. Properties will come on the market as fixed-rate mortgage deals come to an end, as there are probably redemption penalties in selling before then, so this trend will continue for the next couple of years.

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