House price predictions

albacore1854

Which threads are these then?

The ones that you are losing patience with.

Rick62

In my opinion the housing market rise is being fuelled by the Buy To Let buyers

I agree, however I don't think its is correct to say that BTL will not be affected by the rises. They won't be able to 'just' put up rents, rents are set by what the market will pay, not by what they want.

What will really hit the BTL'ers is not just the 0.25% rises, but the fact that many will have fixed 2 years ago for less than 4% and will now be remortgaging at over 5.5%. On a £200k mortgage that could add £3,000 and make the difference between their BTL being viable and not.

Gorgeous_George

Rick62 wrote:

I agree, however I don't think its is correct to say that BTL will not be affected by the rises. They won't be able to 'just' put up rents, rents are set by what the market will pay, not by what they want.

What will really hit the BTL'ers is not just the 0.25% rises, but the fact that many will have fixed 2 years ago for less than 4% and will now be remortgaging at over 5.5%. On a £200k mortgage that could add £3,000 and make the difference between their BTL being viable and not.

Your example of IR rises affecting BTL landllords is daft. A BTL landlord could sell up if his property is not bringing the neessary returns. An owner-occupier would be less inclined to sell.

As I have said before, if all BTL houses were sold tomorrow, there would be an equal number of additional people looking to buy. The affect on the housing market would be minimal.

Of course, the Chancellor could look forward to more people paying Stamp Duty and VAT on EA fes, solicitor fees etc.



GG

devils_advocate

Your example of IR rises affecting BTL landllords is daft. A BTL landlord could sell up if his property is not bringing the neessary returns. An owner-occupier would be less inclined to sell.

As I have said before, if all BTL houses were sold tomorrow, there would be an equal number of additional people looking to buy. The affect on the housing market would be minimal.

IMHO there are a number of fallacies in your post. Firstly a perusal of this forum reveals that not everyone can sell as quickly as they want for the prioce that they want. BTL is also different from other investments as it has relatively high exit costs, such as solicitors fees, agents fees and possible early redemption fees on the mortgage. I've also heard of some BTL landlords who are reluctant to sell and realise a capital gain, as they have to pay tax. They want to defer the sale until they can work out a way to mitigate the tax payable, which of course in many cases just defers the agony.

Putting aside your assumption that all those who rent from BTL landlords secretly want to buy, and also have the financial ability to buy, you also seem to ignore a fundamental rule of supply and demand economics. If the supply increases, prices will fall, unless a lot more buyers enter the market. As 'consumption' of houses cannot increase, it is improbable that new BTL landlords will enter the market as prices are falling and they cannot make the capital gains.

fivemice

"unless a lot more buyers enter the market" - I bet there are already a good few people waiting in the wings for prices to drop.

Rick62

Your example of IR rises affecting BTL landllords is daft

Not as daft as you. If BTLers start putting their properties on the market because they cant afford them then that will put downward pressure on prices.

There are a number of BTLers who's business models rely on rising prices to be sustainable. As soon as prices waver they will have difficulty remortgaging, their costs will rise by maybe 40% or more (if they cant remortgage) on what was already a marginal profit and cashflow. If prices start going down even slightly there will be a snowball effect in the BTL marketplace.

FleetFanatic

tkane wrote:

Property prices will CRASH within the next five years, there's no doubt about it now.

Whereas, I hope that they will crash.

This government has created a situation that will eventually surface and I firmly believe will prove worse that what happened under the Tories.

Don't forget how much more we're being taxed a lot more right now too.

Inflation up to 3%? 4.4% using the other method?
Like hell is it, the true cost of living has been rocketing for a few years now.

Personally, I can't wait for the day everything all falls down & I snap up a bargain property.

Don't take offence people, but as my post shows, opinions on this touchy subject really do depend on whether you have already purchased or not.

crashinit

Carter wrote:

Quite a confident prediction! So do you know how much (% wise) they will fall by seeing as you have your crystal ball to hand there?

around 20-30%

ds1980

ok for all you people that are hoping the house market will crash.

imagining a £150000 house 2 years ago has risen ?????? 15% i would say a lot more than that but im being conservative. price now is £172250. the house market then falls 20%-30% price now £138000 - £120750 (please bare in mind that this is highly highly unlikely. A house is not going to lose £50000 im sorry but its not and remember you only lose out if you sell!

rent costs for 2 years (conservative) £500 pm ???? = £12000. This could have gone into your own house!!!!

Money paid off mortgage in 2 years (capital and repayment) = £5000 or so.

No hassles with getting someone round to look at the washer, can i paint this can i paint that.

Do the sums and really you'll actually gain eff all! Don't forget the capital you should have gained in those 2 years which could have been a nice sum to move to a bigger house or use to have nicce holidays or treat yourself to a new car without having to borrow off a loan company as such. (remortgages are generally cheaper than a loan). I could go on and on and on but you should do the maths yourself and if anyone would have been better off waiting than good luck to you but you'll be one in a million that won't.

I thanks you!

abaxas

ds1980 wrote:

ok for all you people that are hoping the house market will crash.

imagining a £150000 house 2 years ago has risen ?????? 15% i would say a lot more than that but im being conservative. price now is £172250. the house market then falls 20%-30% price now £138000 - £120750 (please bare in mind that this is highly highly unlikely. A house is not going to lose £50000 im sorry but its not and remember you only lose out if you sell!

rent costs for 2 years (conservative) £500 pm ???? = £12000. This could have gone into your own house!!!!

Money paid off mortgage in 2 years (capital and repayment) = £5000 or so.

No hassles with getting someone round to look at the washer, can i paint this can i paint that.

Do the sums and really you'll actually gain eff all! Don't forget the capital you should have gained in those 2 years which could have been a nice sum to move to a bigger house or use to have nicce holidays or treat yourself to a new car without having to borrow off a loan company as such. (remortgages are generally cheaper than a loan). I could go on and on and on but you should do the maths yourself and if anyone would have been better off waiting than good luck to you but you'll be one in a million that won't.

I thanks you!

I'm sorry for saying this.. but...

Your talking out of your ar@e under the assumption that 'house prices always go up'.

Also you forget that maintainence you'll have to do on the propert (usually 2% of house cost PA), interest payments, moving costs. Etc etc the list goes on.

Please dont try to make points you dont understand. Housing is a complex topic, over simplifications will only make you look like a fool.

(sorry for being a little rude but people have to understand there is a bigger picture not the little microcosm they live in)