'50% drops'

Max_Headroom_3

Heyman wrote: »

However, if you're on a BofE Tracker like me then you do stand to gain from interest rate drops

That's a good point, I'd forgotten about those (which is ironic since I have one!! ).

Must be only a fairly small proportion of people though surely? And even then only those already with mortgages and at reasonable rates, it's not going to help buyers or those struggling with negative equity or whatever (unlerss already on a Tracker).

hethmar

In all fairness that link is to an exceptional situation in one bleak area of London which has never had a heart to it. Estates thrown up in the 70s mostly as council housing, which just grew and grew. Always had an awful reputation.

Conrad

Max_Headroom wrote: »

theoretically could happen that they just become worthless.

Youre posts here are amongst the most persuasive and lucid I've read.

On blocks of flats becomming worthless, I've been thinking the same of late.

I've been in the market for a new build repo, but am finding myself holding off no matter what the price. Agents tell me they have other investors viewing but they to are just not biting. Seriously, Ive been seeing stuff 50% down and no takers. EAs are telling me the only people viewing are investors and that they are'nt motivated to buy.


The point being (as you indicate) these blocks I'm seeing are already looking tatty due to high proportion of each block being let, and many dormant empty flats.
You come away feeling they are worth almost nothing as finding a tenant in this saturated rentals enviroment could be tricky.

I think I can envisage £250k 2 bed flats on the London periphery, in decent locations going down to £100,000. I know it sounds incredible, but it could well come to pass with rising unemployment, and frozen lending.

brit1234

Dithering_Dad wrote: »

As you put so much time and effort into your post, I just haven't the heart to poke holes in it. I just thought though that I'd mention that there are holes just so any newbies who have just stumbled into the forum didn't spend all their deposit money thinking they will be able to pick up a 4 bed detached in Didsbury for £40k. :rolleyes:

Poke away. Its better to get to the heart of the situation through argument and debate of the points rather than each side given one line soundbites of their views.

Then others reading can make a more informed and balance view of the situation.

Heyman_2

Max_Headroom wrote: »

You can only rent a property for what renters can afford. They only have so much money. As there is less money in the system, so rents will have to follow. Money can't be created out of thin air (well it can, but only for a bit, hence the mess we're in now!)

Also, for every rental that gets repossessed, it has to come back as housing, either to rent again, or to a buyer (who is either a FTB vacating a rental property or moving out of parents and so not renting and leaving another rental free, or is vacating an owned house which will have to be bought again by a FTB or someone moving on). So the numbers don't really change when a rental is repossessed.

Add to that the amopunt of people renting property they can't/won't sell in addition to all the dinner party dabblers who have to rent at any cost because cheaper to subsidise low rent than get none, and there is a lot of renting competition out there.

Hmmmmm - I'm still not convinced! Take this article from Fool.co.uk for example, it's a recent one too.

Quote -
But if the wider property market is on its knees, the rental market is standing tall. The latest RICS survey found that new instructions to let are rising at the fastest rate in the survey's history.
And if you were hoping that falling markets would mean cheaper rents, think again.
Malcolm Harrison of the snappily-named Association of Residential Lettings Agents says: "Rent will not go down as long as we have the credit crunch. When house prices fall, rental goes up.”

Max_Headroom_3

Conrad wrote: »

Youre posts here are amongst the most persuasive and lucid I've read.

Thanks Mum.

On blocks of flats becomming worthless, I've been thinking the same of late.

I've been in the market for a new build repo, but am finding myself holding off no matter what the price. Agents tell me they have other investors viewing but they to are just not biting. Seriously, Ive been seeing stuff 50% down and no takers. EAs are telling me the only people viewing are investors and that they are'nt motivated to buy.


The point being (as you indicate) these blocks I'm seeing are already looking tatty due to high proportion of each block being let, and many dormant empty flats.
You come away feeling they are worth almost nothing as finding a tenant in this saturated rentals enviroment could be tricky.

Precisely!!

I think I can envisage £250k 2 bed flats on the London periphery, in decent locations going down to £100,000. I know it sounds incredible, but it could well come to pass with rising unemployment, and frozen lending.

I could easily see that, indeed I suspect some already are, particularly new builds which were never ever worth the £250K in the first place.

Max_Headroom_3

Heyman wrote: »

Malcolm Harrison of the snappily-named Association of Residential Lettings Agents says: "Rent will not go down as long as we have the credit crunch. When house prices fall, rental goes up.”

Ah, but it's always the letting agents coming out with soundbites like this!

You have to ask, do the numbers add up? For all the talk of supply and demand regarding house price increase in the boom times, I kept coming back to "who's going to pay for it all?" Same applies to rental income, if it's really going up, who's going to pay for it all? Where's this extra rent going to come from? People have less now, not more.

Heyman_2

I wonder how much the flat bought by Zoe Broadhead (shown here talking to GB) using the governments homebuy scheme in April this year (meaning she probably part-owns it) is worth now???

Dithering_Dad

brit1234 wrote: »

Poke away. Its better to get to the heart of the situation through argument and debate of the points rather than each side given one line soundbites of their views.

Then others reading can make a more informed and balance view of the situation.

Actually, there is little point. Everyone here has entrenched views and so trying to argue with you [STRIKE]that the only 50% drops in Northern Counties are overpriced new build apartments that the builder is simply selling at a more reasonable price (and isn't taking anything like a 50% hit on what he 'paid' for it) or reposessed apartments where the bank couldn't give a monkey's about the sale value because they will be passing the [/STRIKE]

Got that far and gave up. I can not convince you that we won't see wholesale 50% drop across the board any more than I can convince the other chap that we won't see 100% drops in any property.

Sorry Brit, I'm not having a go at you personally, I guess the housing board has 'had it's day' with me and I'm losing interest. Even winding up !!!!!! has little attraction (what with it being so easy).

I'm not sure where to go for a chat now to be honest because I only came to the Housing board because I was bored with the rest of MSE. I guess that once you've paid off your debts, gotten the cheapest utiltity & Insurance, etc. started paying down your mortgage, sorted out your pension plan, savings and investments, there's not much point being here?

ad9898_3

Heyman wrote: »

I wonder how much the flat bought by Zoe Broadhead (shown here talking to GB) using the governments homebuy scheme in April this year (meaning she probably part-owns it) is worth now???

Well shes not laughing anymore in this picture, so I guess Broon is giving her the low down that she is up s**t creek.