'We've reached a tipping point' Signs of house price weakness

Rota

gbsilp wrote: »

Not really. I would just like my son's generation to not have to wait until the age of 40 to buy (he's currently 8).

I do however find it amusing that someone not saying when they are going to buy is considered "cornering" someone.

Have you not read the last 10 pages? People wanting house prices to drop won't answer the question of when fair value to buy is.

It just blows their argument out of the water. If you have no idea at when you will buy why are you salivating at the prospect of a whatever % drop in anticipation of buying? As we have seen, most have no intention of ever purchasing.

ukcarper

gbsilp wrote: »

I think what was said was that BTL mortgages have covenants in them that the LTV ratio must be maintained above some level (80% in that example). Theoretically if prices drop 10% then the LTV rises to 89% and the bank is entitled to ask for a principal repayment of 9% such that the LTV is reduced back to 80%.

I don't know if this is true or not, maybe chucknorris or other BTL mortgage holder could kindly confirm or deny if it's true.

If it's true, it also obviously depends on the banks appetite to foreclose if principal repayment is not forthcoming but you're still paying the interest etc....

"Unscrupulous BTL dont give a monkeys cuss of course...its all borrowed money after all."

That's why made the point BTL mortgages are not 100%

Rota

gbsilp wrote: »

I'd be waiting for some notion of "value". Problem is though, it's like hard core !!!!!!, difficult to describe but you know it when you see it.

Personally, I think I'd see value at around 35% off in real terms. Problem is that this could happen via wage inflation with no nominal price increases, or just nominal price drops.

So your number is 35%, thanks for answering.

When the world almost collapsed and countries were going bankrupt they dropped 20%. What do you think will be the catalyst for a 35% drop? Are you in London or the elsewhere?

gbsilp

Rota wrote: »

Have you not read the last 10 pages? People wanting house prices to drop won't answer the question of when fair value to buy is.

It just blows their argument out of the water. If you have no idea at when you will buy why are you salivating at the prospect of a whatever % drop in anticipation of buying? As we have seen, most have no intention of ever purchasing.

Which argument? Why does not answering where they think fair value is render an argument useless? Why does it matter?

Rota

gbsilp wrote: »

Which argument? Why does not answering where they think fair value is render an argument useless? Why does it matter?

Because they won't act when they get what they want. Why else would you spend years and hundreds of hours posting on the internet, with such conviction only to not capitilise?

How many more times are you going to ask the same question? Ill give you the same answer as the other 2 times.

Blooloo

ukcarper wrote: »

"Unscrupulous BTL dont give a monkeys cuss of course...its all borrowed money after all."

That's why made the point BTL mortgages are not 100%

not now they arent.

but, if you have been "in the game" during the current boom in London, you could easily have pledged that equity in the rest of your portfolio. My accountant called it windmilling...increasing your leverage in a rising market, the risk rising too.

was the cause of the panic in the 1930s great depression..lending on gains to buy more stock...till.......

gbsilp

Rota wrote: »

So your number is 35%, thanks for answering.

When the world almost collapsed and countries were going bankrupt they dropped 20%. What do you think will be the catalyst for a 35% drop? Are you in London or the elsewhere?

35% in real terms. This can be achieved by wage inflation outstripping house price inflation (which was Grant Shapps' stated aim when he was housing minister) or an outright drop.

They would have (and should have) dropped more had the gov not stepped in, bailed out banks, devised schemes and the boe dropped rates. The latter was probably the biggest saviour in two ways.

Firstly people's monthly repayments dropped, allowing more people to stay in their homes. Secondly, dropping rates hammered the pound, which made property appear cheaper to foreign purchasers.

I think the recent rise in the pound has crimped foreign demand for London properties, and I also think the recent clampdown in china regarding currency controls (Chinese nationals are only supposed to be allowed to take USD50k it of the country per year) is also taking its toll on London and the environs.

I think the national indices are heavily skewed by the south east, so if London goes, the rest of the country will likely follow as confidence will evaporate.

gbsilp

Rota wrote: »

Because they won't act when they get what they want. Why else would you spend years and hundreds of hours posting on the internet, with such conviction only to not capitilise?

How many more times are you going to ask the same question? Ill give you the same answer as the other 2 times.

Ok, let me reframe it. Why does it matter to you that someone who spends hundreds of hours posting on the internet won't capitalise during a crash? (Hint: it shouldn't). Now at the risk of being a hypocrite, I won't say anything more about it.....

ukcarper

Blooloo wrote: »

not now they arent.

but, if you have been "in the game" during the current boom in London, you could easily have pledged that equity in the rest of your portfolio. My accountant called it windmilling...increasing your leverage in a rising market, the risk rising too.

was the cause of the panic in the 1930s great depression..lending on gains to buy more stock...till.......

You will have to put down at least 20% on each property if prices fall you not the banks will take the hit.

Rota

gbsilp wrote: »

Ok, let me reframe it. Why does it matter to you that someone who spends hundreds of hours posting on the internet won't capitalise during a crash? (Hint: it shouldn't). Now at the risk of being a hypocrite, I won't say anything more about it.....

I don't care, I'm not losing, they are.

Don't you find it more than a little bit odd? I post because I like to learn from other people and develop my own ideas on how to retire as quickly as possible. There are some very smart, positive people here.

By the looks some people come here (and other places) to talk buzzwords, with no idea how the world works and ultimately have no strategy on what Im trying to achieve.

E.G - Wondering why Foxtons share price dropping 10p doesn't equate to a correlation drop in house prices? You would have to be fairly naive to think the 2 move in step on a day by day basis.

Short term its entertaining, longer term I learn nothing.