HPC thread of the week

mwpt

TheeMaskedTurnip wrote: »

It's worst than that. His dreams of seeing good honest hard working families thrown to the wolves in the street just so he can get a dream house for buttons.

There have been people who didn't have a clue about websites called HousePriceCrash or this forum, who have had their ability to buy eroded by HPI. They are worse off by a long way than people who bought before them. Out of these two groups, not one !!!! is given by most of society about the savers but lots of !!!!s seem to be given about the poor home owners.

mayonnaise

westernpromise wrote: »

Who's Mathew Wright?

No idea...maybe this guy?

an English television presenter and tabloid journalist, best known for formerly writing for The Sun and for being a showbusiness gossip columnist for The Daily Mirror.

https://en.wikipedia.org/wiki/Matthew_Wright
Sure looks like a subject-matter expert.

mystic_trev

westernpromise wrote: »

Who's Mathew Wright?

An expert on the Aberdeen property market.

westernpromise

A propos of not a lot, a mate of mine at work has just bought a couple of 5-bedroom Victorian semis in (I think) Nottingham for £150k each. His idea is to turn the 5 bedrooms and 2 of the 3 receptions into bedsits, to make the other reception into a crashout room with an enormous TV, put two washing machines and a drier into the kitchen, fit it with 300MBPS wifi, and market it to students. He reckons this will cost £20k to do up.

The students get to live with 6 of their mates in big rooms in a house with two bathrooms, a decent kitchen, infinite internet and an enormous plasma TV. They will be paying £9 a night (£273 a month) all-in; no bills.

He will get a 13.5% gross yield. The buy is for cash through a company he has set up.

I have to say it sounds quite sweet. His target rental price is cheaper than the cheapest one-room let on Rightmove; no room has its own bathroom or kitchen, but then neither are there any utility bills. And of course it's corporate so full interest relief (I believe his idea is for the company to borrow the money via a commercial mortgage once it's let, so he gets his cash back out, and presumably does it again). The broadband and the utility costs are tax deductible and of course he can write works off against tax as well.

Nottingham is quite a good university too so it's not like he'll struggle for tenants.

westernpromise

cells wrote: »

that made me smile, my 'dreams' have mostly come true. Your dreams of an epic hpc where houses will be two for a shilling......

Still a bit rich for Crashy, who needs them quite a bit cheaper than that. Free, in fact, with about £30,000 in cash left in the property as a welcome gift.

If it's only £29,000 then he'd have been better off buying 20 years ago.

jacko74

Serious lol at someone getting into student accomodation in Nottingham of all places!.. There's someone who clearly hasn't done his homework into the local market.

cells

mwpt wrote: »

I've asked you the question before a few times but no answer. What is your plan when the easier credit pushes prices higher and the next lot of people are priced out? Do we ease credit further? Where do we end, what is your goal here?

In the scenario you present above, of course such restrictive lending will result in much fewer buyers but why do you get to decide that the lending criteria of today is too restrictive? You're looking at this through the eyes of a landlord who has access to more credit than an OO would. So why not regulate credit to BTL.

Price are only as high as they are because of credit, not some fundamental law that prices must be high.

We can guess there is a floor somewhere because a rich landlord will buy a property for cash at around 5 or 6% yield. So why isn't that the correct price rather than the price that allows BTL landlords to use credit to obtain this yield?

But the growth in the BTL sector is not driven by finance but by equity, something you seem not to want to accept

Last year
440,000 added to the rental stock
100,000 BTL purchase loans given

So at least 340,000 were equity purchases.

Your idea of banning or making BTL-Mortgages more dificult will not drop houses to two shillings becuase as we see 77% of the BTL market is equity only 23% is mortgage.

---

As for a return of self cert causing prices to increase.
That is possible as self cert customers outbid BTL-ers.

Of course you could bring back self cert and increase build rates at the same time. causing prices to be stable and a shift from renting to owning.

mwpt

cells wrote: »

But the growth in the BTL sector is not driven by finance but by equity, something you seem not to want to accept

Last year
440,000 added to the rental stock
100,000 BTL purchase loans given

So at least 340,000 were equity purchases.

Your idea of banning or making BTL-Mortgages more dificult will not drop houses to two shillings becuase as we see 77% of the BTL market is equity only 23% is mortgage.

I know you don't believe what you're typing. There is no way that there were 340000 BTL cash purchases in the UK last year, with no debt involved somewhere.

Some houses would have entered the private rental sector as OOs moved and kept old house to rent out. Some houses would have been bought for cash from equity release on another property, etc.

As for a return of self cert causing prices to increase.
That is possible as self cert customers outbid BTL-ers.

Yes, but that's always your solution, more debt and higher prices. You just don't want to know about lower prices to match wages at more historical norms. Which I understand is ideal as a BTL landlord owning multiple properties.

And you still haven't answered my question about what your plan is once prices max out at the new credit levels.

cells

mwpt wrote: »

I know you don't believe what you're typing. There is no way that there were 340000 BTL cash purchases in the UK last year, with no debt involved somewhere.

Some houses would have entered the private rental sector as OOs moved and kept old house to rent out. Some houses would have been bought for cash from equity release on another property, etc.

an owner moving and renting their old house is an equity 'purchase'. They could sell their old home for £200k, and then buy a BTL with £200k cash. Or they can avoid the needless bother and just rent out the old home

whatever the case, its clear that MORE THAN 330,000 rental properties added to the stock were done so without a BTL mortgage.

So how is banning or making BTL mortgages more dificult going to result in houses that cost two shillings?

mwpt wrote: »

Yes, but that's always your solution, more debt and higher prices. You just don't want to know about lower prices to match wages at more historical norms. Which I understand is ideal as a BTL landlord owning multiple properties.

And you still haven't answered my question about what your plan is once prices max out at the new credit levels.

once prices max out at the new credit environment, we will be in a situation where owners are at max level (something like 72% owners 18% social 10% PR).

If instead you ration mortgages, we will still max out on price it might take 5 more years than the above, but the mix will probably be closer to 50% owners 18% social 32% PR.

So of the two, with prices maxed out, is 50% owners or 72% owners better?

cells

mwpt wrote: »

You just don't want to know about lower prices to match wages at more historical norms.

No, its you that does not want to know about lower prices and how those areas are also seeing ownership shrinking

How do you explain half the country where property is very cheap (1 - 2 x joint full time income. Yes, less than 2 x joint full time income!) yet renting has increased and ownership has decreased.

Why are the renters in places like Stoke-On-Trent renting and not buying? There are lots of properties for sale at very affordable prices so why are they not buying?

Well, some of them, I put it to you, cant do so because you banned self cert thinking it was a good idea for them. So instead of paying 2.5% on a mortgage they pay 6%+ to a landlord.

mwpt wrote: »

Which I understand is ideal as a BTL landlord owning multiple properties.

I am not sure higher prices help me that much I am still in the buying phase so I would be happy for prices to stay flat for the next 5-10 years

mwpt wrote: »

And you still haven't answered my question about what your plan is once prices max out at the new credit levels.

There is not going to be a huge change in my plans one way or the other over the next 30 years.

But I suspect for most landlords. They will not be able to bid as high as the tenants on self cert paying lower rates. It would put a stop to the growth of the rental sector and may even reverse it.

We would also see more builds at higher prices