Property market 'heading for a fall in 2008'

ds1980

THats assuming that i am buying at todays prices. When you get £1300 a month for 2 places that have mortgages of just over £400......only had these properties a couple of years....then you'll see it's easy to do.

You shouldnt assume.

Paid off 7 years of 4 mortgages in 3 years so far so not doing too bad i don't reckon. Those sums can only ever get better as we pay off more of the capital.

Ingsy

Me and my other half were talking about whether to rent or buy back in summer 2004. We were to be FTBs. A lot of people at the time in the media were calling out that a price crash was round the corner etc.

We decided to risk it and buy. We moved into our place in Feb '05 on a 35 year repayment mortgage. Tracker I think it was.

Fast forward to Feb 07. We completed on a 2 fixed 25 year mortgage for 90% of the property value. The property was valued at 3% more than what we paid for it. So much for the crash, huh?

Anyway, while we were seeing various mortgage people, they all said one thing in common: That it was currently rare to see two people reducing their mortgage term and the amount borrowed. We have just borrowed 2.7x joint salary.

As long as there's no price dip before we can remortgage again in spring 09, then I think we're actually doing bloody well compared to a lot of other people.

BTman

Ingsy wrote: »

We decided to risk it and buy. We moved into our place in Feb '05 on a 35 year repayment mortgage. Tracker I think it was.

Fast forward to Feb 07. We completed on a 2 fixed 25 year mortgage for 90% of the property value. The property was valued at 3% more than what we paid for it. So much for the crash, huh?

3% in 2 years? That sound's like a drop in real terms...

Ingsy

Good point, but it's not quite in the same league as the complete collapse of the market, as touted, is my point.

BTman

It's hardly the double figure HPI we have seen the past years either..
Who said the crash has started yet? The title says 2008

littlesaint

ds1980 wrote: »

THats assuming that i am buying at todays prices. When you get £1300 a month for 2 places that have mortgages of just over £400......only had these properties a couple of years....then you'll see it's easy to do.

You shouldnt assume.

You're assuming that people who rent and save have a choice, many would be on the housing ladder already if they did. Some of us were not lucky enough to be around at the right time to buy at 1999 prices. I was a student then, living in a completely different part of the country to where I live now. That's why I rent and save.

Flash_2

thesaint wrote: »

I am not selling. On the contrary, if prices were to drop, I would buy more.

It just makes it hard for someone who simply want's to buy a place to make it their home, as I do

Melissa177

Flash wrote: »

It just makes it hard for someone who simply want's to buy a place to make it their home, as I do

This is not true at all.

BTLers are investors. They aren't going to pay over the odds for a property to rent it out, otherwise the returns won't look be good.

I believe the amount of rented accomodation has remained constant at 11% over the past ten years, as a proportion of the UK housing stock. The difference being that rental accommodation is now more likely to be owned by a private individual, rather than a HA or Council.

If all the BTLers sold up tomorrow, there would still be the same demand for houses. People who are renting have to live somewhere - and would thus have to find a property to buy (or go to the council ie, taxpayer!, for assistance). In fact, you could argue that BTL properties keep the demand down, as properties tend to be rented out to groups of young professionals or students.

It's easy to blame BTLers, but I don't think they are the problem!


PS. I'm not a BTLer, I'm a young woman who has just bought her first, small, cheap flat in London.

Guy_Montag

Melissa177 wrote: »

This is not true at all.

BTLers are investors. They aren't going to pay over the odds for a property to rent it out, otherwise the returns won't look be good.

I believe the amount of rented accomodation has remained constant at 11% over the past ten years, as a proportion of the UK housing stock. The difference being that rental accommodation is now more likely to be owned by a private individual, rather than a HA or Council.

If all the BTLers sold up tomorrow, there would still be the same demand for houses. People who are renting have to live somewhere - and would thus have to find a property to buy (or go to the council ie, taxpayer!, for assistance). In fact, you could argue that BTL properties keep the demand down, as properties tend to be rented out to groups of young professionals or students.

It's easy to blame BTLers, but I don't think they are the problem!


PS. I'm not a BTLer, I'm a young woman who has just bought her first, small, cheap flat in London.

I disagree that BTLers are investors. There are some that are, but the sums no longer add up. I can give countless examples of houses and flats for sale round me where the yield is below 4%, at a time when IRs are at 5.25%. That means that anyone buying will lose money from the start.

You are right however, that BTLers have taken up the slack left when councils sold off their stock. The difference being that with a council tenancy that lasted indefinitely and could be passed on to your next of kin. Unlike today where if you are a tenant you have at best 6 months (at the start) of assured tenancy, after that you're onto two months notice. If this was changed to guarantee security of tenure, even up to 6 months that would improve matters.

Generali

Guy_Montag wrote: »

I disagree that BTLers are investors. There are some that are, but the sums no longer add up. I can give countless examples of houses and flats for sale round me where the yield is below 4%, at a time when IRs are at 5.25%. That means that anyone buying will lose money from the start.

They are still investors just not very sensible ones.

Guy_Montag wrote: »

You are right however, that BTLers have taken up the slack left when councils sold off their stock. The difference being that with a council tenancy that lasted indefinitely and could be passed on to your next of kin. Unlike today where if you are a tenant you have at best 6 months (at the start) of assured tenancy, after that you're onto two months notice. If this was changed to guarantee security of tenure, even up to 6 months that would improve matters.

Presumably, if BTLers come to dominate the market for social housing, or just price out almost all OOs, there will be more calls for greater security of tenure. Not sure whether that would have an impact on house prices. I'm not sure that you can give genuine security of tenure without some form of rent control otherwise LL can say, "I'm not evicting you, just putting the rent up to £10 squillion a month".