Property crash soon???

Wings

A full 12 months fully let might produce a yeild of 2.2%, but what happens if either the tenant is unable or unwilling to pay the rent, or the property becomes vacant for more than two months.

I have just recently decided to reduce my mortgage by selling one or two properties, these were purchased 8 years ago for £30k, now worth about £139k, but only receiving monthly rental income of £595, with both of the last two tenants leaving with two months rental arrears.

With the glut in Buy to Let properties standing empty, I believe for me it is now right to sell both whilst the prices are high and the market is brisk.

robwend

im probebly going to get right up peoples noses but what a fuss!!as someone somewhere in this very overgrown subject has pointed out there are far greater things in life to worry about than"can i afford my mortgage in 2010 "and will my mortage go sky high in 8 mths or"omg will we all crash!!.christ i might never wake up tommorow,why concern yourself with" if buts and maybes"?my own views are things are settling and will staythis way for a good long time and we should worry about it when it goes boom!! coz till them what good does it do to play mistic meg?ok thanks moan over xxxxx wendy

manhattan

Wings wrote:

A full 12 months fully let might produce a yeild of 2.2%, but what happens if either the tenant is unable or unwilling to pay the rent, or the property becomes vacant for more than two months.

I have just recently decided to reduce my mortgage by selling one or two properties, these were purchased 8 years ago for £30k, now worth about £139k, but only receiving monthly rental income of £595, with both of the last two tenants leaving with two months rental arrears.

With the glut in Buy to Let properties standing empty, I believe for me it is now right to sell both whilst the prices are high and the market is brisk.

good call!

i think you are doing the right thing,goodluck in selling those houses and make it quick! before...........................

claz

Wickedkitten wrote:

That's probably because most first time buyers don't actually want what is traditionally a FTB type house and stretch themselves to the limit to get more.

i agree with you wickedkitten however i think we have to realistic about why most ftb try to far i believe this is mainly down to the media

when you first start lookign for a home (girlies may also agreee with this) you also look at decor magaizines etc to get "ideas" for when you move and how you want your place

a lot of the properties shown in these magazines are quite big and it tends to be older (not old) people who have a steady job and a good career

what i'm trying to say is buying a house sometimes seems to the younger generation as either just within their reach (ftb house) within their reach (so they streach to a larger property just within their reach as ftb aren't the best around here) or not a chance in hell which is when they either live with parents or rent

at the end of the day my partner and i were spending £600 rent on a 2 bed flat and now have a 3 bed detached bungalow and pay £750 mortgage, at the end of the day council tax etc and other bills are actually less in our bungalow

anyway, rant over friend has just had to buy a house with trianscoming through her back garden so i know how lucky i am to be able to afford the proprty we have got

tomstickland

That's probably because most first time buyers don't actually want what is traditionally a FTB type house and stretch themselves to the limit to get more.

Maybe. I've been told by mortgage brokers that I have an unfashionably small mortgage requirement (76K), but I've bought what I consider to be an acceptable FTB flat rather than stretching myself. I want to minimise mortgage costs and also have money free to overpay.

OldNelly

Cheapest tiny flat around here is around the 100K mark.

I could barely afford that with my healthy 30 grand deposit, but whats the point? I have more space at home with my parents and a garden too! I can experience a much better quality of life if I stay put.

I'm sure that there are thousands of people in my situation where it just doesn't make sense to buy my first property.

Unless a significant change happens in my life, I am likely to just keep building up my deposit until a property worth having comes into my price range.

My money will grow quicker now in a high interest savings account rather than putting it in property where it will probably decrease in real terms over the next few years.

Earlier in this thread, someone mentioned supply and demand. I believe that one of the reasons why property prices will fall soon is that there cant be a continued damand for property at todays prices.

tomstickland

Sadly, there does seem to be a continued demand. Annoyingly it seems that people will borrow as much money as they are allowed to, regardless of the long term cost.

meanmachine_2

Demand is self perpetuating.

People demand property because it's in demand.

Once falls start to kick in (and we could still be a few years away yet), this process works in reverse.

People stop demanding property, and the herd changes direction.

To quote Elton John, it's the cirrrrcle of life.

People never change. Again I suggest you look at Ireland. Take one glance at house prices there and you feel like an alien, observing a strange demented race. We can see that their market is totally insane. But they can't...yet.

The difference with the Irish market is that their Bank doesn't operate in their interests, but in the interests of the larger EU countries. When their bubble pops - which will happen soon - it could well be disastrous.

But the ECB won't give a stuff.

meanmachine_2

So as expected, Nationwide announce a big jump of 1.1%. Predictable, as they are desperately trying to talk the market down to avoid a rise in interest rates.

At this rate, it does look as if the next move in IRs will have to be up.

Oh, the madness of it all!

By the way doozergirl, I've not lost faith at all! But thanks for your concern. I've been fascinated to observe this whole "spring bounce" phenomenon in close detail. And like the housing market as a whole it utterly defies logic.

That just reinforces my belief that prices will keep being forced up to the point of insanity. The market doesn't do soft landings.

It doesn't do "rational". It rockets up then it crashes.

Same old same old.

NastyMatt

Ok I am going to dip my toe into this murky water again.. but not as a "I agree" or "disagree" with crash or not but rather to get people's opinions on what they think is a housing market crash.

I know some of you are now thinking "well that's obvious... when house prices fall" but analysing uk house prices since 1952 (nationwides figures) a negative annual change has only ever happened twice - 1954 (and this is when records started so is a little misleading) and obviously 1990 - 1995.

Massive price rises i.e +20% per annum have happened 4 times... '71, '78, '88 and now. All have proceeded rises in price/earnings ratio which can be explained by the fact of greater equity for buying next properties. Followed by a slowing in price rises. But is this a crash or an adjustment based on the previous exceptional rise?

So, what is people's opinion on what (and when - apart from the isolated case of 1990 - 1995) has consituted a crash?

/flame suit on