Do You Expect House Prices To Increase In Over The Course Of The Next 12 Months?

superscotsman

I predict a jam that will last for years. That's what happened last time. The only difference this time is that interest rates are low. Last time, many people had the option of selling up, sticking their money in gilts and using the income to pay rented property. Not this time.

BobProperty

The recent BTL's will not be able to hang on in all cases. Take nmiah's figures and edge up the mortgage rate and squeeze down the rent. The more stretched BTL will have the problem of their own mortgage rising, the BTL mortgage rising and the rent not covering it. Miss a few payments, get a void or get a bad tenant and they're in arrears. Mortgage company assesses the situtation, no chance of getting money back in foreseeable future. Therefore cut losses and re-possess. Sell at auction at loss. If needed, stick borrower with CCJ. That's how I see it in a few years.

zag2me

Some really good points about the BTL'ers. I think people only sell when they are forced to sell. Like with rising interest rates or Job losses and I dont see either of those happening in the short term. Especialy if Gordon Brown becomes prime minister, he has consisitantly praised the bank of england for keeping rates low.

nmiah786

To be honest I'm really looking forward to a fall if it ever does happen!!! At least that way I might be able to buy a decent sized house to live in that I've been looking out for (for over a year now). I would not want to buy at the current prices but if I have to go another year without any fall in prices I might not have no choice but buy at the higher prices because of my circumstances i.e. growing family!! Obviously I'll try to get as much of a bargain as possible!!!

zag2me

Problem is with that view, is there are lots of people waiting for the market to fall before they can buy. Some of these people have large deposits waiting, so as soon as any falls do come around, these people will all pile in and buy, therefore propping up the market again.

nmiah786

zag2me wrote:

Problem is with that view, is there are lots of people waiting for the market to fall before they can buy. Some of these people have large deposits waiting, so as soon as any falls do come around, these people will all pile in and buy, therefore propping up the market again.

zag2me

My point exactly but I did not want to explicitly say that!!! So basically any slowdown or downturn in prices will soon be followed by an upturn in prices in the long run. How much it will go down by and how much it will recover back by and over how long a period is another debate altogether!!!

deemy2004

The market has definetly worn down all those who have been waiting for it to fall for a number of years... they have either now given up or are going to jump in anyway.

Thus we 'may' see a top

I know, I know its all been said before.... Oh well..... one day it will happen. :cool:

manhattan

i will wait even if its 10 years! lol

or blow the money on cheap woman,yeah blow the house!

its party time!

tomstickland

Well, the predictions from various pundits in the Torygraph today were all in low single figure percentages. So maybe level pegging with inflation.

Kenny4315

nmiah786 wrote:

What I dont understand is how can a BTL investor afford to sell their property at a loss

What you are assuming is that there will be price growth over the next X years, my view is very clear if prices start falling the general population being totally ignorant of most financial matters, will begin to panic, as has been the case on the upward spiral, and on many a downward spiral both in housing and in other investment types. Lets not forget how many BTL's are remortgaging there main home to release equity to BTL in the first place, this is a high percentage particularly in the amateur BTL's with 2 or 3. Result they have not got debt of the BTL property to contend with they have also got the refinanced debt, and maybe an empty house with a saturated market. Result many will not be able to sit it out, if it falls 5% there will be widespread panic, and then it will be the case of how far it falls not whether growth will be 3% or not. Any investor who thinks that sitting tight on 3% potential pa, should be shot at dawn anyway, considering the hassle and risk involved in BTL. Tenant issues, non-occupancy, capital gains tax, etc, etc.

In short once the situation occurs, whenever the fall hits, the outlay previous should be totally disregarded from a pure investment perspective. All prior costs are sunk (in finance terms), only future costs and revenues should be considered, against any other alternatives (shares, deposits, bonds, opening a strip club for polar bears, etc).