Impact of House price crash..?

payitforwardEDDIE

scorpio_princess wrote:

If this did happen, at least tenants who currently cannot afford to buy (me!) could actually have the opportunity to own their own home. At the moment, a large number of the cheaper end properties (flats and 1 bed homes) are owned by BTLers. Of these, I don't know how many are owned by professional landlords (those in it for the long term) compared with the amateur 'get rich quick' types, but i'd be a lot happier if there was more balance in society. It's really horrible to think that I could be paying someone elses mortgage for the rest of my life, and once that mortgage is paid, the LL can sell the flat, and (assuming property prices are on the up) sell up for a profit, or live on a nice healthy income from the rent. Meanwhile, I'll have to work til I've got one foot in the grave, just to pay the rent! There's something very wrong in society when there are a few 'haves' holding all the wealth, who subsequently prevent the plebs (the 'have-nots') from getting anywhere. At the moment, renting suits me because my personal opinion is that property prices will start to wobble - I wouldn't feel comfortable getting even a 95% mortgage right now. BUT I live in hope that things can change and that EVERYONE gets an opportunity own the place they live in, if they so wish.

I eagerly await the Thatcherite comments...

btw I was a small child when Thatcher was in power and so have no recollection of her policies. I'm just giving my opinion and sharing the way I see things.

You say its really horrible paying someone else's mortgage but you seem happy to work for someone else. What's the difference. LLs provide a service (somewhere to live) and like everyone else expect to get paid. Its not all roses being a LL. I sold one of my BTL properties last year to a builder because of challenges we had after owning it for 10 years.

Sisyphus

BobProperty wrote:

I would agree but 8% is the whole BTL market, 100% of that is not going to crash. I doubt if the "Vested Interests" (VI) would even admit that say 4% would affect the market but that's saying that every other BTL will crash out at loss. I also don't think locals in places like Cornwall will put their house price inflation down to urban BTL growth.
I also think growth/stagnation is very regionalised. Parts of London, NI , Scotland may be going crazy but other parts of the UK are flat.

but those places where the market is going crazy is most likely where BTL is at far greater proportion of the market. You would expect a crash to affect those places more and hence a far more damaging effect on the BTL sector. Basically a large part of the BTL sector is at the most speculative end of the market.
Am I making sense or is my logic going round in circles?
Office party last night so I feel free to shoot me down.

lynzpower

Also bearing in mind that all these people who have had thier homes reposessed will need somewhere to rent- they arnt going to evaporate- someone must house them and they wont get mortgages!

BobProperty

Sisyphus wrote:

but those places where the market is going crazy is most likely where BTL is at far greater proportion of the market. You would expect a crash to affect those places more and hence a far more damaging effect on the BTL sector. Basically a large part of the BTL sector is at the most speculative end of the market.
Am I making sense or is my logic going round in circles?
Office party last night so I feel free to shoot me down.

I'd say that the BTLs are going to be in certain areas, yes. For instance there won't be many BTL's in the Scottish Islands or Moss Side (that's Moss Side on the Fylde Coast not Manchester M14). So in those areas the proportion of BTLs will be almost nil. They are more likely to be in the sort of area that is at least thought likely to rent. Therefore large cities attract the BTL buyer, and the developer selling BTLs. There are areas like, say, central Manchester where there is a lot of development and a lot of BTLing. I would say that the recent (last 2-3 years) buyers are the most exposed but then they are buying at or near the top of the market, so that's to be expected. The crash will affect them the most as their property will be amongst similar struggling property so the rents are more competitive (= lower) than the selling agent told them they would be, and if they are forced to sell, that type of property will be unpopular so the price will suffer. It becomes a vicious circle.
Oh, by the way, it's already happening in some places in Manchester. I saw some auction prices recently and some flats that were built only a few years back were up for auction at less than they sold for a year or two previously. I'll try to find them later but it will take a while.

Leighthal

I've had my house since 1991.When was the last 'crash'?.It must of passed me by because I don't remember a thing

BobProperty

Leighthal wrote:

I've had my house since 1991.When was the last 'crash'?.It must of passed me by because I don't remember a thing

You bought on the way down after most of the fall had already happend (he said making a sweeping generalisation). Fortunately for you, you didn't have to sell in the following 5-8 years.

Tassotti

If a crash does happen, it will be due to a massive hike in interest rates.

Many people will have their homes repossessed, not just novice BTL LLs.

People renting at present will still not be able to afford to buy, as the repayments will be higher than they are now.

There will be a glut of properties that people will be unable to afford, and the professionals will snap up the lot, charge huge rents and be laughing.

Bring it on

dunstonh

If a crash does happen, it will be due to a massive hike in interest rates.

It wont need to be that massive. We have seen posts on this forum from homeowners who cant cope with a £100pm increase, let alone a £200 or £300. The difference this time may not be interest rates alone but affordability within budget with the squeeze caused by council tax, gas, electricity and motoring taxation.

lynzpower

dunstonh wrote:

It wont need to be that massive. We have seen posts on this forum from homeowners who cant cope with a £100pm increase, let alone a £200 or £300. The difference this time may not be interest rates alone but affordability within budget with the squeeze caused by council tax, gas, electricity and motoring taxation.

and unmanageable debt.

sheraz2

scorpio_princess wrote:

If this did happen, at least tenants who currently cannot afford to buy (me!) could actually have the opportunity to own their own home. At the moment, a large number of the cheaper end properties (flats and 1 bed homes) are owned by BTLers. Of these, I don't know how many are owned by professional landlords (those in it for the long term) compared with the amateur 'get rich quick' types, but i'd be a lot happier if there was more balance in society. It's really horrible to think that I could be paying someone elses mortgage for the rest of my life, and once that mortgage is paid, the LL can sell the flat, and (assuming property prices are on the up) sell up for a profit, or live on a nice healthy income from the rent. Meanwhile, I'll have to work til I've got one foot in the grave, just to pay the rent! There's something very wrong in society when there are a few 'haves' holding all the wealth, who subsequently prevent the plebs (the 'have-nots') from getting anywhere. At the moment, renting suits me because my personal opinion is that property prices will start to wobble - I wouldn't feel comfortable getting even a 95% mortgage right now. BUT I live in hope that things can change and that EVERYONE gets an opportunity own the place they live in, if they so wish.

.

your not really owed anything by anyone, we live in relative opulence anyway, but that's just my opinion.

On the other point, about paying someones mortgage, I do a gree it is a frightening prospect. I know someone who off a £115,000 BTL investment is picking up £1000 a month . That was two houses stripped in to 4 single houses :rolleyes: and those are just 4 of his 3 other properties :rolleyes: and property prices have risen significantly since he bought them.

Infact one of the houses he bought for £135,000 and he was offered £155,000 for it the day it went through :eek: They were all bought with the intention of BTL.

ON the one hand it makes me angry, but on the other hand, fair game to them all, they took the risks and worked for the investment and now we pay for their petrol money in their BMW's :T