London property prices to fall 30%....

chucknorris

cells wrote: »

that someone who has to be able and willing to buy them is the BTL brigade. few in the cottage industry think it though analyse as much as you.

to them its simple as...prices went up so lets MEW and buy another...prices went up so lets MEW and buy another...and repeat so the market is in a positive feedback loop.

right now the limiter is not even interest rates but rental cover. 5% rental cover needed by most the big BTL banks with 25% deposit gives a figure of 4.69%. So the BTL crew can bid up prices to ~4.7% gross yield

of course that 4.7% gross yield is on the lower end of the market (ex council flats) so anything above the lower end of the market sees a lower yield as buyers pay a premium for better property but renters don't typically pay much of a premium to rent better property.

Well only time will tell, and I hope that history proves that you were right, but I think that the recent tax changes will dampen the number of properties purchased by landlords. But I also take your point that maybe some will buy because that's what they always do, without too much analysis.

Given my recent posts on this thread, some might be wondering why I am labelled a bull on this website. In 2008/9 I was also predicting 35% falls (from peak) and I was still labelled a bull. I call it as I see it, not as I want/hope it to be.

cells

chucknorris wrote: »

Well only time will tell, and I hope that history proves that you were right, but I think that the recent tax changes will dampen the number of properties purchased by landlords. But I also take your point that maybe some will buy because that's what they always do, without too much analysis.

Given my recent posts on this thread, some might be wondering why I am labelled a bull on this website. In 2008/9 I was also predicting 35% falls (from peak) and I was still labelled a bull. I call it as I see it, not as I want/hope it to be.

left to do its own thing I think prices will be higher in real terms but I think the pressure on the government to do something silly will grow so we could see more taxes or maybe regulation to dampen the market

For example they could kill the BTL market by forcing the banks to have a 8% rental cover calculated at 150% and they could argue its to protect the investor or some such nonsense. The result would be to buy with a mortgage you would need to put down about 60% which would largely kill the BTL demand in higher priced areas....most of London....so the clearing price would have to fall

Crashy_Time

Conrad wrote: »

You need to ask the question; and invest in what?


I'm probably a fairly typical LL, I already have ISA's etc, but having looked many times, I've mainly stuck with property.


I am putting in place plans to offset the tax rises and can't really see a case for selling up. Maybe one day when I'm considerably older.


Once you get to the point of having a reasonable portfolio, you find other opportunities present themselves such as turning a shop into flats, or converting a loft in a flat to another bedroom and so on. These other opportunities are part of the overall decision making process in terms of staying with property.

As I said, not everyone who owns BTL is likely to share your opinion, and their sentiment affects your value.

padington

What they need to do is to make 'build and sell' more attractive by allowing building houses to become a real investment opportunity for everyone through crowd funding and by changing planning laws in designated areas by making high rise only zones in all cities.

The fact they chose not to ensure there is a serious change to planning laws even with a majority government to ensure a house building boom big enough to counter demand, says to me, they don't want one, their plan seems to be to keep the relatively limited housing stock and very high prices and simply tax this just enough to temper the pace of house price inflation with the overarching theme being to never ever cause house price deflation.

Crashy_Time

padington wrote: »

What they need to do is to make 'build and sell' more attractive by allowing building houses to become a real investment opportunity for everyone through crowd funding and by changing planning laws in designated areas by making high rise only zones in all cities.

The fact they chose not to ensure there is a serious change to planning laws even with a majority government to ensure a house building boom big enough to counter demand, says to me, they don't want one, their plan seems to be to keep the relatively limited housing stock and very high prices and simply tax this just enough to temper the pace of house price inflation with the overarching theme being to never ever cause house price deflation.

:rotfl: Pity they can`t control sales volumes, many a property lotto winner must be fed up trying to cash their bricks in all these years. I get the feeling you really need house prices not to fall.....:money:

padington

Crashy_Time wrote: »

:rotfl: Pity they can`t control sales volumes, many a property lotto winner must be fed up trying to cash their bricks in all these years. I get the feeling you really need house prices not to fall.....:money:

Every time I turn in London I see adverts offering to buy property in 7 days. Come out to the big smoke sometime, it's a different world. A massive sign literally at the end of my road is offering to 'BUY YOUR PROPERTY' in just 24 hours.

wotsthat

padington wrote: »

Every time I turn in London I see adverts offering to buy property in 7 days. Come out to the big smoke sometime, it's a different world. A massive sign literally at the end of my road is offering to 'BUY YOUR PROPERTY' in just 24 hours.

Not so long ago you couldn't move for adverts offering to buy unwanted gold.

padington

wotsthat wrote: »

Not so long ago you couldn't move for adverts offering to buy unwanted gold.

Gold isn't much affected by migration patterns. Big difference.

Generali

padington wrote: »

Gold isn't much affected by migration patterns. Big difference.

If you can't afford an oz of gold you can buy half an ounce.

You can't buy half a house in any smart way.

Big difference.

wotsthat

padington wrote: »

Gold isn't much affected by migration patterns. Big difference.

No it's not but I bet when you saw all the gold adverts you thought it was evidence that gold was going to keep getting more expensive.

You're thinking the same about London house prices. Maybe you're right this time.