Many Upsizers gaining nothing from crash....

Graham_Devon

bluey890 wrote: »

When exactly?

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Before houses hit bottom, guarenteed.

You know I cannot answer that question, so I don;t know why you asked me.

bluey890

Graham_Devon wrote: »

Before houses hit bottom, guarenteed.

You know I cannot answer that question, so I don;t know why you asked me.

The point is interest rates might not go up for a long time.

High interest rates make mortgages more expensive for FTBs too.

michaels

Anecdotally this is 100% true - 3/4 bed family homes are in very short supply and have hardly fallen in price, 2 bed terraces and flats and apartments have fallen much further.

HAMISH_MCTAVISH wrote: »

http://property.timesonline.co.uk/tol/life_and_style/property/article6718312.ece

We all know that a crash impacts different segments in different ways. Downsizers and those approaching retirement or looking to leave an inheritance to children are clear losers, as are the many millions of people in or close to negative equity, and the many more millions being penalised through higher rates on remortgage due to LTV brackets being changed through lower equity.

However we also know that FTB's should in theory benefit through lower prices, although in fact it's not that clear as higher bank margins are eating up most of the savings.

And finally the upsizers are also supposed to benefit. Except it now appears that many of them are gaining almost nothing, or even losing out.

The more these numbers come in, the more it becomes clear that the "bulls" were right all along. Very few people end up actually benefitting form a crash, the vast majority gain nothing or lose.

Upsizing Example from the actual percentages in the article:

Upsizer sells house previously valued at 150K for 129K to an FTB at a 14% discount.

Same Upsizer then buys a house previously valued at 190K for 169K at an 11% discount.

Upsizers cost to trade up at peak = 40K

Upsizers cost to trade up now = 40K

Upsizers gain from crash = Zero.

chucky

Graham_Devon wrote: »

The only reason BTL landlords can lean on yield instead of asset increases at the moment is thanks to low interest rates.

These will go up.

you are a buffon - they will only go up on SVR and trackers...

the split is 50/50 between SVR/Tracker and Fixed Rate.

Graham_Devon

chucky wrote: »

you are a buffon - they will only go up on SVR and trackers...

the split is 50/50 between SVR/Tracker and Fixed Rate.

Buffoon for thinking that higher interest rates would effect the yield on any house bought at the "bottom" am I?

chucky

Graham_Devon wrote: »

Buffoon for thinking that higher interest rates would effect the yield on any house bought at the "bottom" am I?

yup - you are. shall we choose fixed or variable mortgage rates?

leave that for a moment... will be your yield calculated from your cash outlay or the "market value" of the property... :rolleyes:

take your pick - whichever suits your viewpoint...

Graham_Devon

chucky wrote: »

yup - you are. shall we look at foxed or variable rates?

leave that for a moment... will be your yield calculated from your cash outlay or the "market value" of the property... :rolleyes:

take your pick - whichever suits your viewpoint...

So, you are seriously saying, that when house prices are lower, therefore lower rent is paid, and you have higher interest payments to make.....I'm a buffon to think yields will not be effected?

LOL.

chucky

Graham_Devon wrote: »

So, you are seriously saying, that when house prices are lower, therefore lower rent is paid, and you have higher interest payments to make.....I'm a buffon to think yields will not be effected?

LOL.

again... think about it before replying... are you working out your yield from your cash outlay... or the market value of the property. there is a difference...

to directly reply to your point...60% of people who are on variable/tracker rates... would have an increased yield due to the size of the rate cuts...

those on fixed rates would have yields reduced...

go back to my first paragraph... that has more significance to yield...

cleanmycleats

Graham_Devon wrote: »

So, you are seriously saying, that when house prices are lower, therefore lower rent is paid, and you have higher interest payments to make.....I'm a buffon to think yields will not be effected?

LOL.

eh?

My rental income is unchanged since 2006, same for the entire area by the way (i'm not claiming this is necessarily the case everywhere, but a fact where I own my property).

My interest payments are massively down (thanks BOE).

And my current NET yield is 12%.

[By the way it is affected, not effected.]

Graham_Devon

chucky wrote: »

again... think about it before replying... are you working out your yield from your cash outlay... or the market value of the property. there is a difference...

to directly reply to your point...60% of people who are on variable/tracker rates... would have an increased yield due to the size of the rate cuts...

those on fixed rates would have yields reduced...

go back to my first paragraph... that has more significance to yield...

You are completely changing the subject to suit. Who said ANYTHING about current mortgages?

It was said "buying a house at the bottom".