Housing market drop

Rave

OP I think you may have left it a bit late to hop on the Sell To Rent (STR) bandwagon but that doesn't mean it isn't worth a go in case you can still find a mug to buy your house at an overinflated price. Ideally it would be better if you sold to a greedy BTLer than a young family stretching themselves to the limit though:(.

Have a look at https://www.housepricecrash.co.uk if you haven't already, plenty of STRs there.

Tassotti

On the other hand see

http://homepages.tesco.net/bruno.powroznik/

eurows

1) Because it's *ours*. Because we can redecorate. Because someone else can't chuck you out. You say don't be sentimental about it, but it's a personal choice. Why did I just buy a DVD when I was out shopping instead of invest that money? Because I wanted to.

QUOTE]

Well it's comments like this that really get us in a mess.

Unless you own (paid outright) you can be chucked out. The repossession figures next month expected to hit the roof will bear this out.

eurows

No, I would believe the person renting would pay more than the person who had bought, that is why I questioned the OP's intentions. All I was trying to say (and apologise if I wasnt too clear on it) that if you had a 250k mortgage on a property that may be worth 300k which was currently costing you £1650 per month (based on a 6% int rate approx) and you remortgaged it to a better rate of say 4% then you would be making savings of roughly 300-350 per month. (Figures are just guestimates and to illustrate what I mean)

I dont know how much a £300k house would cost in rental cost comparison but lets believe that you could find it is less than £1350 per month (not likely to my knowledge but may be possible down south as I have been told I dont understand that area) and that you are going to save your self a further £350 per month by renting.

I rent a £335.000 house for £850.00. I looked at buying it but the finances don't stack up and on top of that you have stamp duty. I paid a £2k deposit which I get back. I really have to laugh at you people that think buyings the way at the moment. If you bought 4 years ago I would agree but now I wouldn't.

Far more clever now to wait. People cannot keep spending the levels of money they are now on mortgages. Jobs are being lost. Interest rates are not going to come down this year like all the papers had you belive last month and more than likely the next IR move will be up.

It will all end in tears...just like early 90's.

Wickedkitten

Well it's comments like this that really get us in a mess.

Unless you own (paid outright) you can be chucked out. The repossession figures next month expected to hit the roof will bear this out.

Funnily enough, I bet a lot of those people being repossessed are people that remortgaged their houses and still had enough to go on a holiday, put in a new kitchen, AND get a car at 19%.

blossom30

Hi, I thought I would inform you of changes in my area. It's just the small things you notice at first but that's where it starts. I have had my eye on a new build house for about 2 years. The "well known " builder has had the house on the market now for offers over £189,995 and hasn't managed to sell. The other houses on the estate sold 2 years ago before the property prices increased dramatically. The house that I am referring to was the show house and this is always left until last to sell. Just this week the builder has put the price on fixed at £170,000 me thinks changes are afoot........as these companies plan well ahead of market changes.

John_M_Business

The two things you have to bear in mind with all developers:
1. They always optimistically overprice in order to get a few 'really profitable' sales and to be able to show generous discounts and offers ('stamp paid', 'put £99 and it's yours' etc.)...
2. They always need churn on debt. They don't like houses to hang around and, in a slow market, it's worth getting the sale now at a lower price than holding on for a higher one for six months

Therefore you cannot take their price cuts (particularly individual ones) as indicators of decline in property prices.

BobProperty

Tassotti wrote:

On the other hand see

http://homepages.tesco.net/bruno.powroznik/

Blimey Tassotti where's the health and safety warning about needing eye protection
There some truth in there but when people say "it's different this time" I know it isn't.

homer_j_3

eurows wrote:

I rent a £335.000 house for £850.00. I looked at buying it but the finances don't stack up and on top of that you have stamp duty. I paid a £2k deposit which I get back. I really have to laugh at you people that think buyings the way at the moment. If you bought 4 years ago I would agree but now I wouldn't.

Far more clever now to wait. People cannot keep spending the levels of money they are now on mortgages. Jobs are being lost. Interest rates are not going to come down this year like all the papers had you belive last month and more than likely the next IR move will be up.

It will all end in tears...just like early 90's.

Fair enough as far as you are already in the rental market and my example was aimed at the person who still owned their home. I was just trying to say that at the moment there is just too much risk coming out - as you said to get back in the stamp duty and associated costs can be a killer.

Just a thought, (and a distraction from a tough day lol) How much of a decrease would you need to get the affordability of the property you are renting? To get a repayment type remortgage at the amount you are paying I am guessing a big one?

Re it all ending in tears, I cannot see how that would be the case, as you experienced historically. Yes consumer spending is up, the Bank of England control interest rates, not the government, the economy is nowhere near in the same shape as it was back then. Unemployment is slightly on the rise but once again there have been no MASS job redundancies to wobble the economy apart from MG/ROVER and I believe we are coming through that at the moment and was no where on the scale of the scargill years.

I am no economist but I dont see all this doom and gloom that everybody is talking about. I know that people are talking about all these people that are mortgaged up to the eyeball but that isnt going to reduce house prices. More supply and less demand is going to do that. People should ensure that they can afford to service their debts and I guess you have to accept that a certain amount of people are not finanically savvy enough to say enough is enough - the economic conditions may bring a halt to these people but you will never stop people not being this way.

I really hope that you can get on the ladder when prices do become low enough for you and really hope that you are not financially out of pocket for what you are doing because if you are not and you are happy then thats all that matters at the end of the day. For those that are homeowners, just ensure that you understand what interest rate increases can cost you and plan for that event. If you can plan then you will be able to ride and dips in the market that may occur some day.

blossom30

John_M_Business wrote:

The two things you have to bear in mind with all developers:
1. They always optimistically overprice in order to get a few 'really profitable' sales and to be able to show generous discounts and offers ('stamp paid', 'put £99 and it's yours' etc.)...
2. They always need churn on debt. They don't like houses to hang around and, in a slow market, it's worth getting the sale now at a lower price than holding on for a higher one for six months

Therefore you cannot take their price cuts (particularly individual ones) as indicators of decline in property prices.

Hi John, I have to disagree with you here, I am experienced in property matters and have found this always to be a strong indication of where the market is heading as Builders have to project market trends/conditions in order to keep them afloat and if you find they are dropping prices and introducing incentives like free carpets, legal fees stamp duty...then they are trying to off load their properties quickly prior to a market change where it would be nigh impossible for them to sell at vast profit. regards shrewdal