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

chucknorris

ukcarper wrote: »

Don't own any BTLs but know a couple of people who do I know they could more rent than they do but are happy to accept a lower rent for better tenants. The person I know best has mortgage payments of less £500 and rents for £850 he bought about 10 years ago and would think he's not unusual.

Ignore the Pm I sent you, I see what you mean. That depends entirely when you bought (obviously the longer back you bought, the greater the difference between revenue and cost). But what I meant was that we rent about 5-10% under the market to get a better choice of tenant.

Crashy_Time

ukcarper wrote: »

Don't own any BTLs but know a couple of people who do I know they could more rent than they do but are happy to accept a lower rent for better tenants. The person I know best has mortgage payments of less £500 and rents for £850 he bought about 10 years ago and would think he's not unusual.

You mean he has accepted that working people can`t match HB rent levels, or that he knows he will lose tenants if he puts the rent up?

Crashy_Time

chucknorris wrote: »

Ignore the Pm I sent you, I see what you mean. That depends entirely when you bought (obviously the longer back you bought, the greater the difference between revenue and cost). But what I meant was that we rent about 5-10% under the market to get a better choice of tenant.[/QUOTE]



Can you give us more detail on how that works?

chucknorris

Crashy_Time wrote: »

chucknorris wrote: »

Ignore the Pm I sent you, I see what you mean. That depends entirely when you bought (obviously the longer back you bought, the greater the difference between revenue and cost). But what I meant was that we rent about 5-10% under the market to get a better choice of tenant.[/QUOTE]



Can you give us more detail on how that works?

There can't possibly be any more details, what on earth do you mean? Under the market rent means exactly that! For example we rent a house in Tottenham Hale for £1,200/month it is a 3 bed Victorian house in extremely good condition (we totally refurbished it after buying, but not over specified, i.e. no gold taps etc.). If you check out the NE17 9HE post code for similar properties you will discover that the market rent is a fair bit higher.

ukcarper

Crashy_Time wrote: »

You mean he has accepted that working people can`t match HB rent levels, or that he knows he will lose tenants if he puts the rent up?

His rent is higher than LHA


LHA in area £600 a month 1 bed, £750a month 2 bed. Cheapest 1 bed on rightmove £575 for a studio £725 for 1bed. Cheapest 2 bed a ropey flat £725 a month nothing else below £750. Cheapest 2 bed house £895.

ukcarper

chucknorris wrote: »

Ignore the Pm I sent you, I see what you mean. That depends entirely when you bought (obviously the longer back you bought, the greater the difference between revenue and cost). But what I meant was that we rent about 5-10% under the market to get a better choice of tenant.

I did say he bought 10years ago crashy seems to think all BTL landlords bought at peak.

chucknorris

ukcarper wrote: »

I did say he bought 10years ago crashy seems to think all BTL landlords bought at peak.

I bought at an average time of about 1994, my wife about 2003, but the example that I posted above in Tottenham Hale, we bought in 2008, so that was actually bought at peak, and it is extremely profitable (even well below the market rent).

wotsthat

Crashy_Time wrote: »

http://www.housepricecrash.co.uk/forum/index.php?/topic/195761-is-prime-london-crashing/page-243

According to this, supply seems to be going up? Does this mean prices must be rising?

That's my favourite thread on HPC. Damik has been excitedly posting evidence of a London crash nearly every day for the best part of a year and prices are significantly higher.

The rate of house price change is correlated to supply. If supply is increasing then, yes, that's suggestive of increasing prices. It's not a perfect correlation but better than watching, say, the share price of Foxtons.

Again, you're trying to create a diversion - if prices fall supply will drop as people ride it out and wait for the recovery. Steep price falls would be associated with economic shocks so there will less choice and less potential buyers. Supply would fall off a cliff.

Crashy_Time

chucknorris wrote: »

Crashy_Time wrote: »

There can't possibly be any more details, what on earth do you mean? Under the market rent means exactly that! For example we rent a house in Tottenham Hale for £1,200/month it is a 3 bed Victorian house in extremely good condition (we totally refurbished it after buying, but not over specified, i.e. no gold taps etc.). If you check out the NE17 9HE post code for similar properties you will discover that the market rent is a fair bit higher.

So how does charging under the market rent get you "better" tenants, or a "better choice of tenants", it isn`t a difficult question.

Crashy_Time

wotsthat wrote: »

That's my favourite thread on HPC. Damik has been excitedly posting evidence of a London crash nearly every day for the best part of a year and prices are significantly higher.

The rate of house price change is correlated to supply. If supply is increasing then, yes, that's suggestive of increasing prices. It's not a perfect correlation but better than watching, say, the share price of Foxtons.

Again, you're trying to create a diversion - if prices fall supply will drop as people ride it out and wait for the recovery. Steep price falls would be associated with economic shocks so there will less choice and less potential buyers. Supply would fall off a cliff.

So how much money/credit people have is of no consequence then? I think it is you who is trying to create a diversion.