House Price Crash Discussion Thread

Vincenzo

carolt wrote: »

Poppycock. You are entirely advocating something , and to suggest you are not is disingenious to say the least. On another thread you have just advocated that now is a good time to get into buy-to-let.

That is no more impartial than I am.

The only difference between us is I am honest about where I stand - you pretend to be impartial whilst pushing your own agenda.

No! I suggested that yields were improving and there may be opportunities out there.....slightly different!

And I do not have an 'agenda' other than wanting a balanced discussion.

carolt

If you say so - though that does make me question your judgement.

Out of interest - you know my position, as I state it frequently. What is yours? Do you have buy-to-lets? Are you putting your money where your mouth is and buying some more yourself?

Just curious...

Generali

Vincenzo wrote: »

No! I suggested that yields were improving and there may be opportunities out there.....slightly different!

And I do not have an 'agenda' other than wanting a balanced discussion.

Yields improve if prices fall or rents rise or both.

FWIW, I expect both to happen this year and then both to fall after that.

Vincenzo

carolt wrote: »

If you say so - though that does make me question your judgement.

Out of interest - you know my position, as I state it frequently. What is yours? Do you have buy-to-lets? Are you putting your money where your mouth is and buying some more yourself?

Just curious...

Carolt - I would be happy to answer that. I have one house which my family and I live in and one property we let out. Although I have never bought to let. The flat we rent out was our previous main residence. We also had another flat (previously my wife's) which we sold a couple of years ago to fund our house purchase and refurbishment.

So I am far from a buy to let investor. My intention had always been to invest in more property long term but as I keep saying I am watching and waiting to see what will unfold.....

The yields on residential property interest me particularly at the moment. As Generali points out if prices fall and rents continue to rise, yields will increase. What I am uncertain of is what happens when we get to a point of say 10% yields? In essence property will look cheap (to investors). Does this mean everyone piles back in (assuming available finance) and prices start rising again? Certainly this is what happens in commercial property markets.

Anyone care to comment?

Generali

Vincenzo wrote: »

Carolt - I would be happy to answer that. I have one house which my family and I live in and one property we let out. Although I have never bought to let. The flat we rent out was our previous main residence. We also had another flat (previously my wife's) which we sold a couple of years ago to fund our house purchase and refurbishment.

So I am far from a buy to let investor. My intention had always been to invest in more property long term but as I keep saying I am watching and waiting to see what will unfold.....

The yields on residential property interest me particularly at the moment. As Generali points out if prices fall and rents continue to rise, yields will increase. What I am uncertain of is what happens when we get to a point of say 10% yields? In essence property will look cheap (to investors). Does this mean everyone piles back in (assuming available finance) and prices start rising again? Certainly this is what happens in commercial property markets.

Anyone care to comment?

It's what happens in all asset markets. People look at the income that can be gained from owning the asset (dividends, rent, coupons etc), any capital gain (usually taken to be a function of increased yields in future or any 'mispricing' in the market) and the cost of holding that asset (taxes, missed profits from not investing elsewhere, interest on borrowed money). Then they make a decision as to what is best.

Oh, and if you're sensible you diversify as much as you can.

Vincenzo

Generali wrote: »

It's what happens in all asset markets. People look at the income that can be gained from owning the asset (dividends, rent, coupons etc), any capital gain (usually taken to be a function of increased yields in future or any 'mispricing' in the market) and the cost of holding that asset (taxes, missed profits from not investing elsewhere, interest on borrowed money). Then they make a decision as to what is best.

Oh, and if you're sensible you diversify as much as you can.

Exactly but to what extent is this true in residential property? After all the majority of property is owner-occupied. What will be interesting to see is how much effect a strong rental market will have on the capital value of properties in the next couple of years. How ironic that the very people renting with a view to buying may well end up strengthening capital values...

John_Pierpoint

Surely, the danger is that this "cheap" repossessed property will end up being occupied by foreclosed former mortgagors, who might be a bad credit risk.
So you end up with a good yield BUT lots of voids as you go through the long winded process in the (now overloaded?!) courts trying to evict a "can't pay won't pay tenant"?

(And everyone thinks you are the wicked landlord evicting a family where the breadwinner has just been made redundant?)

John.

After last week's drubbing, is HBoS getting desperate too:
http://forums.moneysavingexpert.com/showthread.html?t=811699

MissMoneypenny

John_Pierpoint wrote: »

So you end up with a good yield BUT lots of voids as you go through the long winded process in the (now overloaded?!) courts trying to evict a "can't pay won't pay tenant"?

From what I understand, a LL can only take court action when a tenant is 2 months behind with the rent. If the tenant then pays just some of that money (which then reduces the amount owed to less than 2 months rent), then there is no case to answer when it comes to court. Messy.

Turnbull2000

Anne Hagworth of The Times speaks! Behold her Words of Wisdom:

After the collapse of Bear Stearns, a previously obscure institution...

...building societies, whose involvement in the CDO thing was minimal.

But one of the most popular sources of funds this year will be the Bank of Mum and Dad; parents who have made a wise investment in property will be using their equity to turn their children from tenants into owner-occupiers. This will be an example of mature behaviour...

Can the Bank of Mum and Dad rescue first-time buyers?

merlinthehappypig

Turnbull2000 wrote: »

Anne Hagworth of The Times speaks! Behold her Words of Wisdom:

Can the Bank of Mum and Dad rescue first-time buyers?

I loved this quote in the link:

"Meanwhile I notice that a help line for distressed estate agents is in the process of being set up"

Any volunteers?