The Next Nail in the Coffin

economic

the market price of property is very telling - with average london prices of 500k the market seems t be pricing in wage inflation rapidly shooting up. if we get continued deflation and job losses, i really think there is a long way to fall for prices.

so what will it be? inflation or deflation? please dont pretend to know th answer to this. because you dont. hence who knows what prices will do. its all a gamble anyway. i for one am just happy to buy to live and thats it. dont wish to participate in any speculation as risk.reward for me doesnt feel right.

westernpromise

wotsthat wrote: »

A few years of the rich mopping up cheap properties because it was oh so risky to lend to owner occupiers and now a few years of weeding out the wrong sort of BTL owner - property heading back from the poor to the grateful hands of the wealthy.

As I keep saying, if you want to know who'll own property after the next downturn, look at who owns it now; same people.

People are going to find their landlords gentrifying over time. In the next measure tenants will probably have to start to doff their caps to the landlord.

You're so talking my language.

westernpromise

Crashy_Time wrote: »

I might buy the right house again, at the right price

You're too late. That ship has sailed. Your BCR's an impossible 125%, the NPV of your unfunded rent is £115k - even if you rent a bedsit for life.

All because you speculated.

You could have been mortgage-free seven years ago. Imagine how that would have felt.

mwpt

wotsthat wrote: »

It does get more 'interesting' for BTL. They've all been targeted for more stamp duty, the highly leveraged amongst them are going to have to find a way to pay/ mitigate the new taxes and, now, potentially the less well of BTL'ers won't be able to get finance.

A few years of the rich mopping up cheap properties because it was oh so risky to lend to owner occupiers and now a few years of weeding out the wrong sort of BTL owner - property heading back from the poor to the grateful hands of the wealthy.

People are going to find their landlords gentrifying over time. In the next measure tenants will probably have to start to doff their caps to the landlord.

George Osborne has explicitly stated that he wishes to do something about BTL outcompeting OO. They clearly wish to do this by tightening lending to leveraged BTL rather than loosening to OO. BoE have clearly stated that they view highly leveraged landlords as creating potential systemic risk, so again, this fits with the actions.

We have the lowest mortgage rates in history at historically high lending multiples. Those are the data.

I know which way I interpret all of the above, but I do understand that another view is that the downtrodden landlords are being picked on and their entitlement to all the money is being eroded, so it is noble of you to speak up for them.

wotsthat

Crashy_Time wrote: »

I might buy the right house again, at the right price, but not while the present debt mess persists, something has to give first.

How many years from now do you think that might be? 2022 works for me.

Crashy_Time wrote: »

TBH the situation in Scotland is shaping up perfectly for a reality check, with Aberdeen leading the way of course, and as my rent is so cheap watching landlords on here sweat about every little tweak the PTB come out with to try and sort the mess they were complicit in creating is just free entertainment.

Your rent is so cheap because your accommodation isn't very nice. I doubt you'd buy your current digs so you've passed up the utility of living somewhere nice, wasted a load of headspace and sunk a load of money into project crash.

It went tits up last time you owned and you quite like the freedom of moving around cheap digs. Why wrap it all in the ponzi, HPC, debt, Aberdeen stuff?

You're the free entertainment I'm afraid. If/ when a crash actually happens it's going to be a riot watching you make excuses why you still won't buy.

westernpromise

I thought this was interesting:

http://strategicsociety.org.uk/wp-content/uploads/2013/07/Lord-C-Lloyd-J-and-Barnes-M-2013-Understanding-Landlords.pdf

Key points:

PRS Landlords tend to be middle aged (nearly three quarters aged 45-64), married (72%), well educated (two in five have a degree or higher) and disproportionately live in London or the South East (34%).

Most (72%) PRS Landlords have just one rental property, although over one in ten (12%) have 3 or more.

The average (median) rental income a PRS Landlord receives is £500 per month, although one quarter of PRS Landlords receives rental income of £900 or more per month.

Three quarters (77%) of PRS Landlords are in employment, mainly in private sector employment. Among employed PRS landlords, median gross monthly earnings is £2400, and 60% of employed landlords earn £2000 or more per month.

Half (49%) of PRS landlords' main home is worth £300,000 or more, and half (52%) have a home with four or more bedrooms (owner occupiers only). Over two in five (45%) PRS Landlords have total financial assets worth £30,000 or more, with a quarter (26%) having financial assets worth £70,000 or more.

Comparing PRS Landlords to their tenants shows that PRS Landlords are older than their Tenants; nearly three quarters (73%) of PRS Landlords are aged 35-64 whereas over half (55%) of PRS Tenants are aged 16-34. PRS Landlords are also more likely to be married or cohabiting (85% of PRS Landlords compared to 49% of PRS Tenants).

Two in five (41%) PRS Landlords have a degree or higher compared to a quarter of PRS Tenants
(26%).

PRS Landlords are more likely to be working (either employed or self-employed) – 76% of PRS Landlords compared to 65% of PRS Tenants. Employed PRS Landlords are twice as likely to have gross monthly earnings of over £2000 per month (60% of PRS Landlords compared to 30% of PRS Tenants).

PRS Landlords have on average far higher financial assets than PRS Tenants. The median total financial assets of PRS Landlords are £20,500 compared to £398 for PRS Tenants.

Quite interesting really - the average tenant who can't afford to buy can't do so because he is younger than his landlord, earns less, hasn't saved, is less well educated and has minimal assets. Put bluntly, the typical tenant isn't financially equipped to be an owner-occupier, for which he blames his landlord,

wotsthat

mwpt wrote: »

George Osborne has explicitly stated that he wishes to do something about BTL outcompeting OO. They clearly wish to do this by tightening lending to leveraged BTL rather than loosening to OO. BoE have clearly stated that they view highly leveraged landlords as creating potential systemic risk, so again, this fits with the actions.

We have the lowest mortgage rates in history at historically high lending multiples. Those are the data.

I know which way I interpret all of the above, but I do understand that another view is that the downtrodden landlords are being picked on and their entitlement to all the money is being eroded, so it is noble of you to speak up for them.

I'm not much bothered what happens to BTL - I'm not invested and already have enough housing exposure so have no plans to climb aboard either.

I think there are two things happening..

(1) The government are trying to increase tax take. It's easier to tax people with money than those without.

(2) The BoE are trying to expand their sphere of influence and having got new powers will attempt to use them in some way.

I expect the average house owner (OO and landlord) will continue getting wealthier than the average Joe. I also think it's unlikely George Osborne's face is bothered whether the ratio of owner occupiers increases or not.

If there was real concern about the dangers of BTL it could be stopped in short order with a special landlord stamp duty of, say, 30% - no new BTL's and no tax either.

ruggedtoast

westernpromise wrote: »

I have one that's even smaller: it's the one playing for sell-to-rent speculators who called it exactly wrong.

If I ever meet one of those I will let them know.

Don't forget to listen to your one.

.

economic

its becoming a buyers market in central/inner london from what ive been hearing from agents.

i dont get why certain people are so confident on prices remaining high or going up. it baffles me. lots of risks out there and people underestimating potentially a downturn in londons economy.

wotsthat

economic wrote: »

its becoming a buyers market in central/inner london from what ive been hearing from agents.

For an EA it's never a bad time for you to buy or sell.