how many REALLY think there'll be a crash rather than a stabilisation ?

Gorgeous_George

dolce_vita wrote: »

my money is on a fall in house prices to bring them into line with wages.

But what wages.

My 1st house cost £24K in 1985. Today's price should be £52K in line with wages.
My 2nd house was £32K in 1987 (should be £65K today)
My 3rd house was £60.5K in 1999 (should be £76K today)
Current house was £154K in 2003 (should be £176K today)

1st is now £160K
2nd is now £180K
3rd is now £170K
4th is now ? (not been valued and difficult to compare but £260K would be a conservative estimate)

I expect a 30% fall but I'm not selling to cash in. If there is a 30% fall, BTL yields may stack up once again. I don't think houses will cost as much as they do today in terms of earnings to price ratios. Recent high HPI has been entirely due to low interest rates and little to do with immigration/BTL/second homes.

GG

smugbear2007

Gorgeous_George wrote: »

Ok, as I always rise to the BTL bashers' bait, a short lesson in numbers.

If I sell me BTL I am liable for CGT at 40% (after certain allowances). If I sell my residential property, I am not.

Therefore, a £50K fall in house prices will reduce my BTL CGT liability by £20K making the £50K fall impact my pocket by just £30K. On the other hand, I will 'feel' the full £50K fall in value of my home. Whatever happens, I will own a home with a modest mortgage outstanding and a BTL property that has paid for itself in 4 years ( I was lucky/worked hard).

To conclude, some BTLers may suffer, many weill not.

GG

IF you sell and at what price?

so you own your BTL outright then? doubt there are many like that outthere.
many BTL'rs have relied on the appreciation aspect of their property to make any money,they are up to the neck in chucky.if you bought it 4/5 years ago or longer you probably wont feel it because prices have gone up so steep, they can only go down so much.
however those who bought after that took advantage of low IR, IO where the rent just covers the mortgage are going to suffer because, they didnt make any/little money along the way in their pocket per month, AND if they cant sell and make a profit then what do they do?
the market will be flooded with flats for sale and for rent, and a flooded market is a buyers market in that sector, which will plummet prices even more.

obviously your circumstances may be different, if its paid for which makes a big difference, so you will just lose capital in theory from the peak prices.
the key thing with BTL as they all bank on having equity, as soon as that equity disappears its no longer an investment but a millstone, especially if you cant find a tenant. this, interest rates and new builds being discounted will start the ball rolling.

i would sell the pair if i was you and cash out. renting is so much fun.lol;)

Snow_Dog

Do you know, this place looks more like HPC everyday, in fact I think the wallpaper is the same colour, doomsday black.

Im sure the paintings are Hieronymus Bosch too.

Next thing you know there will be someone calling themselves psychicbear and starting fifteen daily threads with news of economic disaster.

smugbear2007

i thought about psychic bear but you dont need to be psychic to realise what will happen. thats why i thought smugbear was far more appropriate ;-)

Dithering_Dad

Wow, It's keeperbear's conjoined twin - identical in manner(s) yet having an opposite view from him!

dolce_vita

Dithering_Dad wrote: »

Wow, It's keeperbear's conjoined twin - identical in manner(s) yet having an opposite view from him!

And without the 1 bedroom flat

Dithering_Dad

dolce_vita wrote: »

And without the 1 bedroom flat

:rotfl: Nice one. Oh, and the smug one seems to have a glimmer of intelligence.

EDIT: That should have read "the smugger one". Sorry.

mr.broderick

smugbear2007 wrote: »

i thought about psychic bear but you dont need to be psychic to realise what will happen. thats why i thought smugbear was far more appropriate ;-)

Where do you live smugbear? Do you want a crash so you can afford to buy?

mybrainhurts

smugbear2007 wrote: »

Quiet?...not in the last month or so. wonder why that is?

I dont want to see a recession either, but too much wealth/imagined wealth has been created by HPI. This has given sheeple a false sense of security and is not healthy, neither are 40yr mortgages 6x salary, and IO mortgages. it is for the best in the long run and is inevitable. get interest rates up to around the 8%mark (1year away) and lets get this show on the road, the quicker the better for EVERYONE, those who own crappy flats and new build shoe boxes included.
im not an evil person who will pour scorn on peoples downfall as some of my close friends and family have just bought...i fear for them.
very roughly 20%drops minimum, 40%prison block complexes of flats and stuff in "up and coming areas" ie previously shat holes where land was bought cheap to build shoe boxes opposite the gas works and council estates. :T
as a general trend when people realise their house wont make them money they will think more carefully how they will spend it. as always location,location,location will decide where on the scale the 20 to 40% drops will be seen.

Do stop using that irritating expression "sheeple".

I know, I know: you didn't make it up yourself. You saw a lot of other people using it on HPC and you thought you would follow their lead.

Now: which domesticated animal valued for its meat and its wool does your conduct remind you of?

Think about it overnight and I'll give you a hint in the morning if you haven't cracked it by then.

Snow_Dog

What I would like to know is, is selfsatisfiedbear going to contribute in any way on the rest of the MSE forums, in the spirit in which they were setup, or is pontificatingbear going to just spout HPC party line for a month or so then bogof?