House prices

Mortgagefreeman

I’ve got to say that I’ve gone from bullish to bearish over these last few months. I think we’re due for a correction in Property prices, maybe as much as 20% in some places, though I doubt they’ll be a ‘crash’

GreatApe

BTL buying is less than 6% of demand or about 70,000 units a year

The crash cheerleaders seem to think them exiting the market would result in a 50% crash

Well let's ask this, what if new build rates went up by 70,000 units a year what would house prices do crash 50%? Of course not most the crash cheerleaders would say if house building increased by 70k units a year prices probably would not move down at all they night just increase more slowly.

So why expect two completely different outcomes from the same 70,000 properties per year added to supply reduced from demand.

Crashy_Time

GreatApe wrote: »

The biggest mistake the crash cheerleaders make is thinking landlords would sell AFTER a crash.

Why would landlords do that. If they are getting 5% yield today they would get 10% yield post a 50% crash. Why sell a 10% yield asset to do what put it in a 1% yield bank account?

What happened in the 2008-2010 crash is that landlords become big net buyers adding hundreds of thousands of properties to the rental stock.

While the crash cheerleaders hate landlords they fail to see most landlords become landlords by buying cash or inheriting Property. If prices crash 50% someone who just inherited their parents house is much less likely to sell it and much more likely to rent it out so someone who wasn't a landlord and was not interested in becoming a landlord does so due to a house price crash.

Yes, you are right, many will try to sell BEFORE the crash (which more and more people see as in the post now) and this in turn will make any crash worse than if they held on (the tax changes are a biggie IMO)


https://www.landlorddebtadvisory.com/news/number-of-landlords-reducing-portfolios-surges/

Crashy_Time

Mortgagefreeman wrote: »

I’ve got to say that I’ve gone from bullish to bearish over these last few months. I think we’re due for a correction in Property prices, maybe as much as 20% in some places, though I doubt they’ll be a ‘crash’

So you think they have the tools to do what they did in 2008 all over again, but with a much bigger debt bubble?

GreatApe

Crashy_Time wrote: »

Yes, you are right, many will try to sell BEFORE the crash (which more and more people see as in the post now) and this in turn will make any crash worse than if they held on (the tax changes are a biggie IMO)

https://www.landlorddebtadvisory.com/news/number-of-landlords-reducing-portfolios-surges/

You are grasping at straws crashy

Look at the period 2008-2010 what happened?

Landlords were almost totally locked out of the mortgage market so much so that landlord BTL mortgage numbers fell drastically. That meant a lot of BTL landlords indeed had to stop buying and since existing landlords always sell large numbers of properties (death/divorce/etc) you and your pals were dancing around in 2008-2010 the long awaited crash had finally arrived that the renters could finally buy big houses for small money

But what actually happened to the rental stock in 2008-2010?
It expanded by over 500,000 units ........
You and your friends were only partly right landlords were stuck out of the market
What you failed to see then and what you fail to see now is that in a house price crash people who normally would have sold just dont sell and instead rent it out

So how did the rental stock grow by a massive >500,000 units between 2008-2010 when BTL landlords were out of the market? Well people who inherited property decided not to sell at crashy prices so they become 'accidential' landlords or rather they saw more value in not selling during a crash. Also rich people landlords and non landlords decided with property prices 10-20% cheaper it was a good time to buy cash.

So while it appears on the surface that crash = landlords all selling their properties to you and your mates for small money. The reality we experienced was that crash = sellers dont want to sell you big homes at small prices they would rather keep them

GreatApe

Crashy_Time wrote: »

So you think they have the tools to do what they did in 2008 all over again, but with a much bigger debt bubble?

You are so blind to so many things thanks to your extreme confirmation bias den

1: House prices in most the country are cheap, not just affordable but cheap. So cheap that a repayment mortgage on a £120,000 three bed terrace costs less than your £400pm bedsit

2: The economy is growing and unemployment is at 40 year lows

3: Life for the majority in the UK is good there is no better time to be born than today contrary to the naysayers

4: An increase in house prices does not impact most people affordability. In fact the majority of Brits are insulated from hpi via inheritances. The average house price could go to £1 million and still over two thirds of brits would be insulated. Only some 1/5th of the uk population are net housing buyers over their lifetime and many of them are migrant

Koldweather1

GreatApe wrote: »

You are so blind to so many things thanks to your extreme confirmation bias den

1: House prices in most the country are cheap, not just affordable but cheap. So cheap that a repayment mortgage on a £120,000 three bed terrace costs less than your £400pm bedsit

Very true, however in all fairness to Crashy, that statement ONLY holds true if IR remains record low, and to play devils advocate IF rates were to shoot through the roof that cheap place will suddenly be very expensive, especially in an era where inflation is outstripping wage growth in 70% of the years. We are per person poorer due to this than before 2007, and it is especially evident in the younger generation, no wonder my generation is now voting for Labour, its a strike back against the way my generation is now worse off then any recent one, at least from a poorly economic point (of course, some argue socially we are better thanks to the internet, but thats no good if people have to choose between food and internet, etc).

Anyway, I do agree with the concept that to rent (forever renters" as someone says) instead of buying has been huge folly for someone like Crashy, and unfortunatly the only way they can now be happy is if the whole system crashes around them and everyone feels all of Crashy's accumulated pain of watching as everyone passes them by, even people of a younger generation like myself.

Crashy_Time

GreatApe wrote: »

You are grasping at straws crashy

Look at the period 2008-2010 what happened?

Landlords were almost totally locked out of the mortgage market so much so that landlord BTL mortgage numbers fell drastically. That meant a lot of BTL landlords indeed had to stop buying and since existing landlords always sell large numbers of properties (death/divorce/etc) you and your pals were dancing around in 2008-2010 the long awaited crash had finally arrived that the renters could finally buy big houses for small money

But what actually happened to the rental stock in 2008-2010?
It expanded by over 500,000 units ........
You and your friends were only partly right landlords were stuck out of the market
What you failed to see then and what you fail to see now is that in a house price crash people who normally would have sold just dont sell and instead rent it out

So how did the rental stock grow by a massive >500,000 units between 2008-2010 when BTL landlords were out of the market? Well people who inherited property decided not to sell at crashy prices so they become 'accidential' landlords or rather they saw more value in not selling during a crash. Also rich people landlords and non landlords decided with property prices 10-20% cheaper it was a good time to buy cash.

So while it appears on the surface that crash = landlords all selling their properties to you and your mates for small money. The reality we experienced was that crash = sellers dont want to sell you big homes at small prices they would rather keep them

The reality was that large portfolio landlords were bailed out by low interest rates, they can`t be bailed out by low interest rates this time. The article seems to be saying that many already ARE exiting the market, or trying to, not waiting to sell or not sell after a crash. The mistake you make is that you confuse massive central bank intervention with a normal market, and assume that they will keep bailing it out. The political fallout already makes it likely that they will try something else now, the BTL tax is an indication of the direction of travel IMO.

Crashy_Time

GreatApe wrote: »

You are so blind to so many things thanks to your extreme confirmation bias den

1: House prices in most the country are cheap, not just affordable but cheap. So cheap that a repayment mortgage on a £120,000 three bed terrace costs less than your £400pm bedsit

2: The economy is growing and unemployment is at 40 year lows

3: Life for the majority in the UK is good there is no better time to be born than today contrary to the naysayers

4: An increase in house prices does not impact most people affordability. In fact the majority of Brits are insulated from hpi via inheritances. The average house price could go to £1 million and still over two thirds of brits would be insulated. Only some 1/5th of the uk population are net housing buyers over their lifetime and many of them are migrant

You don`t seem to know the difference between a bedsit and a flat (a bedsit has sleeping and cooking arrangements in the same room I believe) and sales volumes are falling, so no one is really going to take you seriously are they?

Filo25

Crashy_Time wrote: »

The reality was that large portfolio landlords were bailed out by low interest rates, they can`t be bailed out by low interest rates this time. The article seems to be saying that many already ARE exiting the market, or trying to, not waiting to sell or not sell after a crash. The mistake you make is that you confuse massive central bank intervention with a normal market, and assume that they will keep bailing it out. The political fallout already makes it likely that they will try something else now, the BTL tax is an indication of the direction of travel IMO.

Equally I think you are confusing government moves to make BTL less attractive with an eagerness to see the market fall, no doubt we will see further support for FTBs in the upcoming budget, there is obviously a political interest in rebalancing the market.

If I was being cynical I would say that homeowners tend to vote Tory more often than non homeowners so that may make party political sense for the current government as well.

Form a purely cynical political point of view I would imagine homeowners make up a large proportion of voters for the Tory party I doubt the government is particularly keen on crashing the market for them.

You equally seem to think that low rates are just a bailout for housing when in reality it was a bailout for the economy at large given what happened in the GFC and the desperately slow recovery of the world economy from that, with further fiscal tightening still to come (we still have a deficit and high government debt) I doubt you will see a return to what you would call "normal" interest rates anytime soon.