House Price Crash within 2 years???????

scorpio_princess

tawnyowls wrote:

I absolutely agree with you. Unfortunately, I think it's so far gone now that without rules to change how many properties people can own, even a crash won't stop it. I am constantly shocked when I hear about people owning hundreds of properties (there's one couple who, last time I read, owned over 450 and were buying one a month!). Property isn't like other commodities - if you wanted to buy a particular pair of shoes but couldn't afford them, you could just buy a cheaper pair; you wouldn't have to move to a different area of the country just to buy them. I have nothing against people owning a small number of other properties and renting them out (for many people, it's their pension), but who needs hundreds? Or even dozens? What that does is stop other people being able to buy their own home, so they have to rent - the rental yields go up, thus encouraging the buy-to-letters to buy yet more properties, which stops yet more people buying, up goes the rental yields, etc; it's a vicious circle. Even if there is a crash, the BTLs will have made so much money that they'll be able to buy yet more property at cheaper prices, and even though the rental yields might go down because other people will be able to buy (if they can beat the BTLs to it), the prospect of capital growth will make it worth the BTLs' while to hang onto their property. If things get serious, the little guys (Ma and Pa with their one house that's their pension) might not be able to afford to keep up the payments, but the big boys will just sell a few of their massive pension portfolios to keep themselves going and then buy again when rental yields rise.

We are creating a new generation of landowners, and squeezing the little people out. This cannot be right, and as pointed out by others, it's a serious disincentive to work hard and 'better yourself'. At a town meeting recently, one of the speakers suggested there should be a cap placed on the number of properties any one person is entitled to own, and the response was almost unanimous agreement (most reckoned no more than 10) . If that were evern to happen (unlikely with this government, who have succeeded in making Animal Farm a reality), it would be interesting to see if the government's stance that only a small percentage of property is rented would actually be true; their other numbers (eg on mass immigration, currently estimated by other groups at over 600,000/year, were wrong by a factor of 40)

Hmmm yes - 'All animals are equal, but some are more equal than others'.

I think you've got it spot on tawny. Many posters on here say that BTL occupies only a very small percentage of properties bought, but if the government can be 'creative' with some figures, what's to say this 'small percentage' isn't a complete fabrication? Of course it is affecting the housing market, especially at the lower end of the market i.e FTB properties. I 100% agree that there should be a cap on the number of properties a landlord can own (although this is sure to provoke outrage amoungst the people making a lot of money from BTL - after all, nobody in their right mind is going continue doing it if is a cash drain).

But the fact is, all this inequality is causing a lot of bad feeling - but it's a catch 22 situation because those that have done well out of property don't want things to change, and are in fact fuelling yet more price rises, whilst those who do want things to change, just to buy the smallest place in which to call home, can do nothing because they have no vast equity to play with, and often have a paltry deposit whch wouldn't even pay for a front door in this area!

So yes, LIMIT THE BTLS! <<<<runs for cover>>>>>

Alan_M_2

Damn this is turning into a conspiracy theory thread.

The BTL figures are provided by the mortgage lenders and not the government so I'm not sure here that leaves your argument, anyhow, I would have thought it would have been in their interest to promote BTL showing how buoyant the housing economy is as an investment....just a thought.

There seems to be a lot of people in a big hurry to blame the government for a lot of things, which in most cases are reasonable, but HPI is more down to loose lending than goverment policy, although it still has it's part to play.

Guy_Montag

Rather than capping the number of properties a landlord can have, it would be better to change the rules to make BTL less attractive or other methods of financing your future more attractive.

For example:
GB could stop taxing pensions into the ground.
Pensions could be changed so you don't have to buy an annuity when you retire.
Capital gains tax could be increased for second+ properties.
Council tax should be the responsibilty of the Landlord.
Require planning consent to change a dwelling from a main residence to a holiday home with associated increase in council tax.
Require planning consent to change a dwelling into a HMO.

& so on ad infinitum

Rick62

If the government really wanted to burst the BTL bubble they could change the taxation rules so that interest on BTL mortgages were not tax deductable.

The real problem is lack of properties, if enough properties were built no one would care how many were owned by BTLers.

Although the number of BTL is still apparently 'small' at something like 8% of properties, the effect is greater, as this has come from almost nothing in the last few years, so the effect on supply and demand is greater than the absolute number.

beer2006

Capping the number of BTL's isn't going to happen imho, all that will be done is, a company set up, BTL's bought through that, how can they limit numbers of properties owned by companies?

talksalot81

CB1979 wrote:

simple really, (now I think this is the 30th time, and someone WILL listen! lol) if you can afford the home nice, if you can't tough.

not saying you shouldn't be able to own your own home, but if you can't you can't.

if you're not prepared to get a huge mortgage for your home (if that's what it needs) then don't come moaning about it.

Simple is indeed the word. Unfortunately your simplistic comment has absolutely no point in a discussion such as this. It does no good beyond telling the rest of us you havent seen the bigger picture.

In the first instance I think it is deeply hypocritical. "Dont come moaning about it" - well what on earth are so many people coming on here bragging about the fact that they do have!?

More importantly, what do you think happens if those price out do stop moaning about it? Do you honestly believe that the market would be stronger if people were not passionate enough to come on here and moan about it!? No - the reality would be totally the opposite.

tomstickland

Hey I want a Ferrari, but can only afford a VW Golf.

I could CHOOSE to go and buy a Ferrari, but I'll stick to what I CAN afford.

If we were to make this analagy more realistic it'd be
"hey I want to buy an old Escort estate but the finance payments on it would be 70% of my take home pay and the company won't even lend me that much anyway. I've been told to consider buying with a friend. "

I've seen a number of threads on here claiming that the stupid would-be FTBers are only unable to afford something because they want their first home to be a 5 bed mansion. In Gloucester the cheapest 1 bed flats are around £75K, more than 3.5 times a £20K salary.

Guy_Montag

tomstickland wrote:

If we were to make this analagy more realistic it'd be
"hey I want to buy an old Escort estate but the finance payments on it would be 70% of my take home pay and the company won't even lend me that much anyway. I've been told to consider buying with a friend. "

I've seen a number of threads on here claiming that the stupid would-be FTBers are only unable to afford something because they want their first home to be a 5 bed mansion. In Gloucester the cheapest 1 bed flats are around £75K, more than 3.5 times a £20K salary.

See you're just being greedy & wanting it all, you can buy an old Escort in Middlesbrough for only 45% of your take home pay. (N.B. You are not allowed to take that Escort beyond Middlesbrough city limits)

Gorgeous_George

So, every BTL gets sold. What about Housing Association homes? Should they be sold as well. Let's make renting illegal while we are being pathetic.

IF every BTL was sold, there would be an equal number of additional buyers (those people who formerly chose to rent BTL properties).

There stll would not be enough houses for our expanding population. More people would need to pay Stamp Duty, EA fees, etc., when they moved house. More people would be tied into long term debt via mortgages.

I think it is time that the BTL bashers got back under the stones that they came from - only to re-emerge when they grow up.



GG

Hereward

Gorgeous_George wrote:

So, every BTL gets sold. What about Housing Association homes? Should they be sold as well. Let's make renting illegal while we are being pathetic.

IF every BTL was sold, there would be an equal number of additional buyers (those people who formerly chose to rent BTL properties).

There stll would not be enough houses for our expanding population. More people would need to pay Stamp Duty, EA fees, etc., when they moved house. More people would be tied into long term debt via mortgages.

I think it is time that the BTL bashers got back under the stones that they came from - only to re-emerge when they grow up.



GG

Don't forget that not everyone who rents wants to buy. If any of these people are in private rentals, then a forced sale would make them homeless..