2.5 million people facing negative equity

Cannon_Fodder

http://www.fsa.gov.uk/pubs/plan/financial_risk_outlook_2009.pdf page 40 also mentions;


"The presence of buy-to-let partly explains the rapid fall in house prices"

"The steeper decline in residential property prices in this downturn
may in part, be explained by the increased importance of the number
of buy-to-let properties, as investment properties are more sensitive to
expectations of property prices and rental yields than residential purchases.
Weaknesses in the buy-to-let market, in turn, may have tended to reinforce
the weaknesses in the wider residential market, and expectations of future
house price falls could in turn become self-fulfilling."


Interesting...

silvercar

Cannon_Fodder wrote: »

http://www.fsa.gov.uk/pubs/plan/financial_risk_outlook_2009.pdf page 40 also mentions;


"The presence of buy-to-let partly explains the rapid fall in house prices"

"The steeper decline in residential property prices in this downturn
may in part, be explained by the increased importance of the number
of buy-to-let properties, as investment properties are more sensitive to
expectations of property prices and rental yields than residential purchases.
Weaknesses in the buy-to-let market, in turn, may have tended to reinforce
the weaknesses in the wider residential market, and expectations of future
house price falls could in turn become self-fulfilling."


Interesting...

So when house prices were rising and FTBs couldn't get on the ladder, it was all the fault of the BTL brigade.

Now prices are falling that too is the fault of the BTL brigade.

A lot of influence these BTLers seem to have.

mower5

silvercar wrote: »

So when house prices were rising and FTBs couldn't get on the ladder, it was all the fault of the BTL brigade.

Now prices are falling that too is the fault of the BTL brigade.

A lot of influence these BTLers seem to have.

Leverage means those that bought recently are vulnerable. How many were suckered in at the peak price with multiple btls and there own houses on the line? 500,000
What happens if the pressure on rents lowers the income? lots more flats for sale, forcing prices lower, which forces rents lower, which forces further btls to sell portfolios or go bust, which lowers prices, etc, etc

PasturesNew

BTL LLs never had to think about paying the capital. They already had a house and would simply flog their empire at some future date and settle the capital with that.

That put them a few hundred quid ahead of OOs before you take anything else into consideration. So they had a bit of a head start. Add in those that actually raised a deposit by MEWing from their first house they had equity in and that gave them another head start.

Not sure my posting has a point, but it's getting on so I am not bothered if I made one or not - or what it was.

StevieJ

It is funny how the posts become more valid when they agree with the doomers, the FSA were a joke the other week

Pssst

Oh dear,how sad,never mind.

We all have to pay for credit crunch Britain's failure.

ManAtHome

StevieJ wrote: »

the FSA were a joke the other week

So what's changed..?

chucky

PasturesNew wrote: »

BTL LLs never had to think about paying the capital. They already had a house and would simply flog their empire at some future date and settle the capital with that.

That put them a few hundred quid ahead of OOs before you take anything else into consideration. So they had a bit of a head start. Add in those that actually raised a deposit by MEWing from their first house they had equity in and that gave them another head start.

Not sure my posting has a point, but it's getting on so I am not bothered if I made one or not - or what it was.

yawn - less than 10% of properties purchased are BTL

not exactly the driver that stops the "have nots" to buy a property

mower5

chucky wrote: »

yawn - less than 10% of properties purchased are BTL

not exactly the driver that stops the "have nots" to buy a property

What % of btls are 1-2 bed flats and terrace houses that ftb would traditional have bought?
My guess 99%.
BTL RIP - subprime 40% plus LTV
FTB RIP - priced out via 25% LTV
Bottom rung of ladder has died.

chucky

mower5 wrote: »

What % of btls are 1-2 bed flats and terrace houses that ftb would traditional have bought?
My guess 99%.
BTL RIP - subprime 40% plus LTV
FTB RIP - priced out via 25% LTV
Bottom rung of ladder has died.

don't know - you tell me; link or source please??