UK property - overvalued and poised for a correction soon?

roswell

meanmachine wrote:

Let's hope Gordo taxes you till your pips squeak.

Well thats a rather unplesent attitude, so they saw an opertunity and took it they are willing to take the risk and good to them. Given the knowledge we all have now compaired to 5 years ago we would all do the same.

talksalot81

roswell wrote:

Well thats a rather unplesent attitude, so they saw an opertunity and took it they are willing to take the risk and good to them. Given the knowledge we all have now compaired to 5 years ago we would all do the same.

It is an unpleasant attitude but one everyone would share were I to discover a miracle cancer cure and refuse to sell it at less than £100k a pop. I could be absolutely certain to get sales and would probably do alot better than if i priced it so all could afford. I would be looking out for my own best interest and not caring about others. The way the housing market stands, that is what a BTL'er is doing.

movieman

Look at the domestic economic factors not comparing prices agaist other countries, that doesnt tell you very much.

So you're saying that the British economy is doing so much better than the American economy that a crappy flat where the chavs will be fornicating and vomiting in your front garden should cost as much as two detached houses in Texas?

I think its the affordability of the rent which is a part of the problem. Renting property - expensive

But renting is generally far cheaper than paying a mortgage: that's another clear sign that we're in a housing bubble. It's also why BTL is now such a silly idea in most cases: if people can't afford to pay a mortgage on a 350,000 pound 'executive flat', how are they going to pay enough rent to pay their landlord's mortgage? It's become 'Buy to Inflate' in the hope that prices continue to rise, not 'Buy to Let'... as soon as people stop expecting more price rises, there'll be a rush to the exits and a massive collapse in prices.

movieman

BTL properties are usually let to families/people who would otherwise need to buy a home of their own.

Around here they've been knocking down detached houses with sizable gardens -- i.e. the kind of property that people would like to buy as 'a home of their own' -- and building blocks of 'executive apartments' in their place, which are bought by BTLs and are then mostly left empty, either because they can't find anyone dumb enough to pay the rent they're charging to cover their huge mortgage, or they don't want the hassle of actually renting them out when they expect to make 30k a year in price inflation.

The town where I work is absolutely infested with empty BTL flats, and more are still being built. Ten years from now people will look back on the whole housing bubble as an absolute disaster for the UK economy... though there'll be a lot of cheap flats for sale after they're repossessed.

Gorgeous_George

The problem is that there are not enough houses.

My BTL is worth about £80K. The rent is £85 per week (£368 per month). A 100% interest only mortgage would be about £380 and a 25 year repayment mortgage would be just over £500 per month.

I provide buildings insurance, curtains, carpets, oven, hob and room heating. An owner would need to buy these items themselves.

Margaret Thatcher and the Tories screwed us all by forcing local authorities to sell their council houses at half price (vote buying con that worked well). If any government wanted to bring housing back into the public sector, I would willingly sell my BTL back to them. I think that local authorities should start building coucil houses/flats again.



GG

roswell

talksalot81 wrote:

The way the housing market stands, that is what a BTL'er is doing.

Sorry Dont agree with that, BTL accounts for what 8% ??? or the market so who can you blame for the other 92% ??? I dont have a BTL but im sure very few people here could say that if they knew 5 years ago that property would increase in value so much they would have got the biggets possible mortgage on the biggest / best located property they could, just the same im sure many that remortgaged to buy a new car / holiday wished they had used the equity to get a BTL.

its a case of someone has done good for them selves so the rest of the world resents them.

it seems that is what we in the Uk are known for now, if something goes wrong (Endowment mortgages / tripping over a paving stone / having to many beers / not readfing terms and conditions of contracts etc) we find someone to blame for our mis fortune. But if someone takes a risk and does good for them selves we pigeon hole them and blame then for doing things we didnt ...

really if you want to point fingers at anyone it should be the banks and the global economy and the sooner people face upto this the world will be a lot les bitter and twisted. (in the houseing market sence).

KTF

I have always thought that if the housing market 'crashes' then everyone who is waiting to hop on the property ladder will take advantage of it and the prices would rise again.

A bit of a simplistic view though...

roswell

correct in a fashion but not so easy,

The problem with a crash is that no one in there right mind will sell just because there property is worth less, it will be because off increasing costs / unemployment and a general down turn in the economy where they wont have a choice in a crash it comes down to stick if you can ... sell if you Absolutely HAVE to or be repossed.

Banks tighten lending so unless you have a nice deposit so the banks feel safe they wont lend and the money supply goes dry ((Ever noticed how banks chuck money at you when you run your accounts fine but as soon as you need to borrow money due to hard times they dont want to know you ??))

Then no one will buy into a loosing asset, I remember a street in the 90`s had houses for sale between £15, 000 / £18, 000 local average wage at the time was about 9 000 / 13 000 but the houses would stick on the market for months / years.

Those houses now are £100 000 plus and exchange regularly now, local average wages are about £13 000 / £18 000.

talksalot81

roswell wrote:

Sorry Dont agree with that, BTL accounts for what 8% ??? or the market so who can you blame for the other 92% ??? I dont have a BTL but im sure very few people here could say that if they knew 5 years ago that property would increase in value so much they would have got the biggets possible mortgage on the biggest / best located property they could, just the same im sure many that remortgaged to buy a new car / holiday wished they had used the equity to get a BTL.

If you read, I didnt put definite blame on BTL. What I was implying is that with so many people trying to get onto the market and being unable, the BTL brigade are actually inhibiting normal people being able to get on with things. 8% may seem nominally small, but think about that in real terms. That would be an absolutely huge real number.

My response was in reference to a poster who wished BTL to be heavily taxed. I strongly agree with this. Houses are homes primarily but the financial climate has made it such that they are investments primarily and homes only if necessary. That is fundamentally flawed

roswell

The alternative to BTL is social housing .. thats all been sold off (well mostly)

The alternative is that everyone is a home owner and in that case the economy will sufffer because we need people to migrate with in the county / economy. We need landlords to supply housing for people who cant / are unable to purchase this could be for many reasons, I think we all forget that there has always been land lords and always will be the biggest land lords have been the Kings / Queens of the counrty.