House Price Crash Discussion Thread

Vincenzo

m00m00 wrote: »

it's only as much of a generalisation as your claim that most BTL'ers are in it for the long run.

the facts of BTL are that most people in it, have got into it recently (in the past 2-3 years), and know of nothing other than rampant HPI.

how they will deal with slowing or even negative capital appreciation is anyone's guess.

I disagree. Due to the high costs and illiquid nature of property investment, it has to be a medium to long term investment. I am pretty sure RICS surveyed BTL investors on this last year and will see if I can find it.

Frankly I think your claim that 'most' BTL investors got into the market in the last 2-3 years is wholly inaccurate.

I cannot speak for the whole country but my experience is that rents are increasing in my area, interest rates have stared to fall again and my (single) rental property is looking after itself very nicely.

adr0ck

m00m00 wrote: »

how they will deal with slowing or even negative capital appreciation is anyone's guess.

they will deal with it by not expanding their portfollio

my experience is that most BTL buy a property for a medium to long term investment

with rents increasing in cost the majority will be fine

(there will obviously be those who have overstretched themselves etc)

m00m00

Vincenzo wrote: »

I disagree. Due to the high costs and illiquid nature of property investment, it has to be a medium to long term investment. I am pretty sure RICS surveyed BTL investors on this last year and will see if I can find it.

Frankly I think your claim that 'most' BTL investors got into the market in the last 2-3 years is wholly inaccurate.

I cannot speak for the whole country but my experience is that rents are increasing in my area, interest rates have stared to fall again and my (single) rental property is looking after itself very nicely.

look at the figures for BTL mortgages and how many were given out, that's where my claims come from for the number of people getting into it.

you are arguing from your own unique position, you cannot extrapolate this to cover an entire complicated market.

I'm standing by my point some posts ago, no one actually KNOWS what's going to happen, bull or bear.

Vincenzo

m00m00 wrote: »

look at the figures for BTL mortgages and how many were given out, that's where my claims come from for the number of people getting into it.

you are arguing from your own unique position, you cannot extrapolate this to cover an entire complicated market.

I'm standing by my point some posts ago, no one actually KNOWS what's going to happen, bull or bear.

I do not claim to speak for the market, as I think I made clear in my last post. Nor do I claim that I know what will happen.

I do know one thing - this thread will go on forever!

kriss_boy

Did I make a mistake?

Im 25, FTB and upon advice from my financial advisor I purchased my first property jan 31st. At the beginning of January he advised that this was the month to buy and if I couldnt get something immediately I should wait till later in the year.

In early January I saw a house on at offers over 82,000. In scotland we normally pay 10-15% over the asking... (90,000) so when the house went to a fixed price of 85,000 after 5-6 weeks and no sale I managed to snap it up by offering a cheeky 83,500.

How confident are you guys the market could crash? There are identical houses to mine in the same area on at offers over 90,000 but they arent shifting.

I do worry that because its so hard to get a mortgage these days that in a years time the house could be worth less!!!

Its a one bed semi with a nice garden though so it will always appeal to the older demograph.

m00m00

if you are happy with the house, and not actually looking to move in a years time, what does it matter what it's worth on paper ?

the value should only be an issue when you buy/sell or remortgage.

the obsession with a house's 'current value' is part of a large reason why this country is in the mess it is, with regard to housing.

kriss_boy

The house was slightly more than I wanted to spend... but my brother bought, extended and sold an identical house to it on the opposite side of the street. He owned number 5 and I now own number 6!

He paid 75K for his 2 years ago, spent 20K on the 2 bed extension (cheap because we all pitched in) and then sold it in January for 140K making around 35 grand.

He moved out 3 weeks ago and I move in to mine in a matter of days!

So Im relying on the market remaining stable as our plan is to also extend ours and look to make the same kinda of return. Our extension will be slightly dearer, maybe 25K, but still, with a total investment of around 110K Id love for the market to at least remain the same so that in a year I could get 140K if not more.....

I know it shouldnt matter but jeez how else are people like myself meant to work their way up the property ladder.

carolt

Shame you didn't post here before buying - you might have got advice that could have saved you a little...

I certainly don't believe house prices are going to stay where they are, and not fall, sorry.

The moral is: never believe a financial advisor! Make your own decisions - they have a vested interest in selling you products, so asking them which product to buy may be sensible; but asking them whether to buy anything at all, isn't, as they are always going to say yes, or else they'd never make any money....

Making money out of property is all about timing. Unfortuntely, I suspect your brother got his timing right and got out in the nick of time. You didn't, and won't make a lot; may make a loss. But on the bright side, if you extend it, you have a home you should be able to live in for many years, so sale price is irrelevant.

Lotus-eater

carolt wrote: »

The moral is: never believe a financial advisor!

This is an absolutely true story. A friend of mine who I only see once in a while told me three or four months ago that he had just bought a couple of BTL's (his first) I did a double take and sort of said "you what"........
Don't you know this looks like being a bad time for investing in property? So next time I see him he tells me that he has rang his bank manager and asked him about the property market, apparently the bank manager reassured him that all is fine (in a hearty bank managery way) and laughed that he would tell him if the property market was about to fall...........

mike_the_bike_2

He wasn't a branch manager for Northern Rock , those esteemed financial wizards was he?