Debate House Prices


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Paul Hodges: UK house prices to fall 50% in global ‘Great Unwinding’

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  • wotsthat
    wotsthat Posts: 11,325 Forumite
    The time to sell up BTL`s is NOW, not soon, IMO.

    Has your opinion ever been different during the time Chucknorris made too much money to ever spend?
  • lisyloo
    lisyloo Posts: 30,077 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Chucknorris has also said that BTL is not a good investment to start now.
    my opinion is that the biggest change will not result from a BTL exit, but from a much reduced number of new entrants and few landlords adding to their existing portfolio.
    It may be still profitable for those who bought their property many years ago and have good tenants.
    That's not the same as starting from scratch at today's prices.
    Undoubtedly some will try to join the gravy train once it's left the station, but I think the amount of new BTL borrowing will fall.
  • chucknorris
    chucknorris Posts: 10,793 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 14 July 2015 at 8:04AM
    The time to sell up BTL`s is NOW, not soon, IMO.

    You don't strike me as someone that I would tend to take investment advice from, but I'll go through the motions of explaining my rationality anyway.

    If I was selling purely as an investment decision, I would have to make about 7.5% per annum on the equity released. That is obviously not available, so the decision has to be either based upon other factors (at least partially) and/or forthcoming changes.

    Other factors:
    I don't have any children, so the money needs to be spent, so this means as I reach a certain age, the financial argument fades, that age I think is fast approaching, but I'm not quite there yet.

    Forthcoming changes:
    Although I am not heavily geared, my mortgages are only averaging 0.5% above the base rate, this skews the profitability, in favour of staying in the market. But obviously rates are going to start creeping up soon.

    I am 58 years old next January, I think my time to sell is going to be in 2 to 7 years time. Obviously I will be watching the market during that time. I think a phased selling approach seems the most sensible way forward.
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • chucknorris
    chucknorris Posts: 10,793 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 14 July 2015 at 7:57AM
    lisyloo wrote: »
    Chucknorris has also said that BTL is not a good investment to start now.
    my opinion is that the biggest change will not result from a BTL exit, but from a much reduced number of new entrants and few landlords adding to their existing portfolio.
    It may be still profitable for those who bought their property many years ago and have good tenants.
    That's not the same as starting from scratch at today's prices.
    Undoubtedly some will try to join the gravy train once it's left the station, but I think the amount of new BTL borrowing will fall.

    I agree, all the properties that I bought and started just by covering the mortgage interest, would now mean starting with a significant loss (I ran the figures through on my spreadsheet, the day after the budget).

    But it will be interesting to see how much rents creep up by, as the number of new entrants declines (and the supply of rented accommodation declines). I don't think that it will be dramatic, but I think that it will be noticeable.

    It might be different outside of London where some places are still behind their all time, REAL TERM capital value highs.
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • chucknorris
    chucknorris Posts: 10,793 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    wotsthat wrote: »
    Has your opinion ever been different during the time Chucknorris made too much money to ever spend?

    You have reminded me and reinforced that I shouldn't wait too long. But it is quite difficult to switch from an 'investing for your future approach', to a 'spend spend spend approach'.
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • wotsthat
    wotsthat Posts: 11,325 Forumite
    You have reminded me and reinforced that I shouldn't wait too long. But it is quite difficult to switch from an 'investing for your future approach', to a 'spend spend spend approach'.

    I'm in an accumulation phase and saving quite hard and do ponder how easy it will be to switch from saving for retirement to then spending those savings in retirement.

    It's something quite prevalent on the pensions board. There's someone on there that's rich by pretty much anyone's standards, wants to retire but has spent the last couple of years procrastinating. Just one more year. Just need to sell the house etc. etc.

    If he didn't want to retire or couldn't that's fine but his stated aim was to retire early and he could have done that without a worry in the world two years ago.

    Looks like he's about to pull the trigger at last but he's now got to spend two years of retirement in a coffin.
  • chucknorris
    chucknorris Posts: 10,793 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    wotsthat wrote: »
    I'm in an accumulation phase and saving quite hard and do ponder how easy it will be to switch from saving for retirement to then spending those savings in retirement.

    It's something quite prevalent on the pensions board. There's someone on there that's rich by pretty much anyone's standards, wants to retire but has spent the last couple of years procrastinating. Just one more year. Just need to sell the house etc. etc.

    If he didn't want to retire or couldn't that's fine but his stated aim was to retire early and he could have done that without a worry in the world two years ago.

    Looks like he's about to pull the trigger at last but he's now got to spend two years of retirement in a coffin.

    I'm taking my first step next summer, when I retire from work (I've already told them I'm retiring). Probably as my leisure time increases, it will also naturally lead to more spending, especially if my wife retires the following year, as that opens the door to spending winters in Spain and/or the Algarve.
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • hpifever
    hpifever Posts: 106 Forumite
    I know quiet a few btl scum that are selling up.
  • chucknorris
    chucknorris Posts: 10,793 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 14 July 2015 at 9:05AM
    hpifever wrote: »
    I know quiet a few btl scum that are selling up.

    I'd be surprised if you knew anyone (from any field) who wasn't scum. But why are they quiet?
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • lisyloo
    lisyloo Posts: 30,077 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    But it will be interesting to see how much rents creep up by, as the number of new entrants declines (and the supply of rented accommodation declines).
    If new BTL entrants decline and the supply of rented accomodation declines, then doesn't that mean more property is available for owner occupiers and therefore there are fewer renters.
    Could it be neutral? (all other things being equal).

    Of course all other things aren't equal and there will continue to be a population increase.
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