First Time Buyers - Enough is Enough!

meanmachine_2

JanCee wrote:

Having read some of your other posts you have made it clear that you are hoping for a huge crash in property prices so that you can then pick up a property at a knock down price. I think we all know who the vulture is.

If prices do "crash", all it will do is bring them back to 2001 levels, before amateur BTLers swarmed into the market. That is a GOOD thing. High house prices are wrong. They are evil. They hurt those who need help the most and reward those who need help the least.

Follow this link if you think I'm some kind of FTB nutter. I'm not. I'm talking sense. Would you call Evan Davis a vulture? Because if you are, then I'm proud to be seen as that in your eyes.

http://news.bbc.co.uk/1/hi/business/3701070.stm

JanCee

Where I disagree with you on this subject is your insistance that BTL is the cause of high house prices. This is not the case. For BTL to work as an investment you simply can't afford to pay more than a house will bring in rent. While house prices have been soaring rents have remained stable. Landlords would be crazy to force the market upwards when it would price them out of the property market also. If house prices fell then BTL would be even more attractive to investors because the rental yield would be even better.

meanmachine_2

JanCee wrote:

Where I disagree with you on this subject is your insistance that BTL is the cause of high house prices. This is not the case. For BTL to work as an investment you simply can't afford to pay more than a house will bring in rent. While house prices have been soaring rents have remained stable. Landlords would be crazy to force the market upwards when it would price them out of the property market also. If house prices fell then BTL would be even more attractive to investors because the rental yield would be even better.

Fair enough. BTL is one factor among many that have coincided to cause the current housing bubble, the others being Labour's inflation fiddle, concentrating on consumer prioces and ignoring housing, plus the craziness that is self cert.

Labour boasts about its management of the economy and the avoidance of boom and bust, but it's overseen the bust of tech stocks, and pensions driving house prices through the roof.

And when I attack BTLers, I think I should be specific. I'm not referring so much to professional landlords, but Joe Public who sees the property market as an easy ride, and a licence to print money. Surely you're just as uneasy about all of these amateur landlords flooding into the market?

deemy2004

It usually is the man in the street who is the last to pile in, was with tec stocks i.e lastminute.com which marked the popping of the tec bubble.

And more recenthly amateur one or two property ownign BTLers......

7 more days till Zahadum....

JanCee

The BTLers that I most get annoyed about are those that are there to take advantage of people who can't afford to buy their own homes. I am in a unique position of being both a landlord and a tenant(via my daughter who is at university)and I know the difference between decent landlords and rip-off merchants. In your original comments about BTL you said that most BTLers were driven by greed well I can tell you that I was driven into BTL by worry. Worried by having my pension gambled away by some city whizz kid who then gets paid a million pound bonus for being useless. At least this way there is some safety net for when all the pension schemes we have paid into for years turn out to be worthless.

FTBers have my sympathies, I was one myself once and even though house prices were lower then interest rates were sky high and there were lending restrictions on.

BTLers are not part of the axis of evil, despite what you may think.

slater14

Joe Public cant be blamed for putting money into these super duper new money making schemes after watching their endowments, pensions and tech stocks tumble... but as Deemy quite rightly points out, Joe Public is always the last sucker before it crashes....for Gods sake even middle aged stay at home mums are buying BTL !!! (as one poster on here has said)

I'm a landlord (as are my parents) I've been in 'the game' for 20 years and my parents over 50 years. This is not our pension or a nest egg or a replacement for stocks. It is our business. The first house I bought (and every house since) to 'let out' was financed by the standard process - i.e. 30% deposit commercial loan (at commercial loan rates!) capital and interest repayed over 15 years....with a business plan and security to back up the 'business' venture.

If you tried that today the figures would never stack up and thus you have not got a 'business'....You have a pile of bricks that you are wishing and hoping wil be worth more tomorrow than they were today....not unlike tech stocks.

We are currently disposing of some of our property with the full intention of buying it back once the "correction" has happened.

All of this self cert, BTL, interest only, is just another wheeze dreamed up by the likes of Nationwide and Halifax to keep driving the bubble ever higher.

...but we've seen it all before, the last time it was 'equity ownership' you buy 50% today and buy the other 50% in 7 years...why? because you couldnt afford to buy it all today. And what happened in 7 years? the market had peaked and it started 'correcting' itself.....this is just another form of that. You cant afford to buy the house on 'standard' repayment methods so you stretch the debt by manipulating the figures. Dress it up as you will, If you cant afford it, YOU CANT AFFORD IT...it really is as simple as that.

Unless you believe dougk in that we live in new and different times where we can afford it and can manipulate the figures......In which case, I'm off to camp outside the Bentley dealership and see if I can manipulate myself into a Turbo Coupe in our new and different world!

budgetflyer

Facinating debate.
Chicken Little will never buy a house because the market is going to crash or interest rates are going to rise. Never is the right time. Thats why he rents and kids himself on that hes really saving money.
If you want that house, go for it. Dont say "can I afford it?" ask yourself "How can I afford it?" (within reason :-) )
Someone in a previous post, I cant remember who, cancelled a deal over 1K. What a mug.
I hear it every day , "were not going to buy our councill house until they put the heating in next year" etc etc. Mugs , in my area its costing them 10K a year in collateral by holding off .
What they should say is "we're too scared to commit ourselves" next year might be better. At least then they are honest.In 10 years they will still be council tenants as they are too Chicken Little to take the chance.
All this crap about FTBs cant get on the property ladder. Not True.
Buy off plan ,save 20%. New builders offer loads of incentives . Persimmon Homes offer a 80% deal, pay them back the extra 20% within 3 years- no penalty or its 20% of the increase thereafter, whichever is greater.-not a bad deal. Up here in Scotland. you could be in a Brand new 1 bed Apt 1/2 an hour from Edinburgh for under £60K.That same 1 bed apt in Edinburgh would be £150K.

nelly_2

Budget flyer your ridiculous. Dont say "can I afford it?" "How can I afford it?" (within reason :-) )
Average wage for a couple equalls roughly 90 grand mortgage, average house price in britain is over 150 grand So yes how can I afford it? whats your answer please?

And brand new apartment's are about as big as a mobile phone.

That persimmon deal sounds crap too, you still have to pay the full price, its just a low start mortgage.

Over the next year we will be seeing a lot of people who, over the last couple of years got a low start mortgage just to get on the property snake, and now the real interest rates will start kicking in for them, and they are going to be in REAL trouble. Repossesions went up 25% last month and I think that is a major reason.

And the person who pulled out over the 1000 I think the seller just shoved it on at the very last minute knowing they had done a survey and such and thought he had them over a barell. Not only would I have pulled out but I would have broken his jaw right there and then. And i would bill him for the survey money, people like that really are scum.

JanCee

nelly wrote:

Budget flyer your ridiculous. Dont say "can I afford it?" "How can I afford it?" (within reason :-) )
Average wage for a couple equalls roughly 90 grand mortgage, average house price in britain is over 150 grand So yes how can I afford it? whats your answer please?
.

Don't start with an average priced house, start at the bottom and work up, thats why its called a property ladder.

slater14

Jancee,

As a not so new money saver, I take it you do grasp the idea of what "average" implies?

Just in case you dont -

It isnt only the "average" house that has rocketed in value to unsustainable levels. ALL house prices have risen to the same levels, from the cheapest 1 up 1 down to the most glorious 12 bed mansion.

The term "average" is used to gain a picture from the overall.

A little question for those that cant see a problem with the cost of housing -
How many years can house prices earn more than your salary before we hit a crash?

Budgetflyer,

So you're another believer in our different and bright new world where financing is different and debts can be stretched and manipulted to suit your fancy - RUBBISH.

If you read my post above yours, you will see why it is a dangerous idea to start buying 'equity ownership'...this is a last gasp from a drowning man, people cant even afford to buy on interest only self certs so they got to come up with this 'equity ownership'

...its all been done before and will end the same way.