House Price Crash Discussion Thread

BobProperty

merlinthehappypig wrote: »

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?

They can phone my 0871 number and I'll divert it to the Samaritans.

Vincenzo

John_Pierpoint wrote: »

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

Well I wasn't referring exclusively to repossessed property or previous owner-occupiers. Rents are already increasing in many areas due to high demand, assuming that demand remains (which seems likely due to the uncertainty in the market, continuing immigration, and the lower availability of credit) and assuming that property prices fall, yields will look attractive AND there will be a good supply of eager tenants with good credit histories. Some of whom will be backed by substantial savings, intended for a house purchase at some stage. This could in turn increase demand from buy to let investors and the cycle continues.....

What will be interesting is how long (or short!) it takes for this to happen. And indeed whether the rental market in residential property has that much effect on capital values. Does anyone have any data on this?

brit1234

What happens when properties continue to fall and it starts to significantly wipe out buy to let portfolios equity. Banks aren't just going to sit there and say fine they are going to want the landlord to invest capital to reduce the risk for the lender. I'm sure it is written into buy to let mortgages.

On top of that what about the complete disappearance of the higher LTV buy to let loans over the last month. Investors are starting to panic as they come to remortgaging and are now finding it near impossible to buy further properties.

No more Paragon, Mortgage Express, The Mortgage Works, Bristol and West lending. Whats the game plan now?:rotfl:

ixwood

What about the 22 guzzillion new builds that have been built, sorry, thrown up over the last few years? Are rents really rising?

And rising yields sounds good, but that just because values have come down! It doens't make it more, just a higher %!

So,,, buy a place for 100k, getting say 5% yield at the time! Prices drop a further 10 %, the yield on the value to rent goes up, but not on the price paid! They've just lost 10k,

PS My full stop key is broken, in case anybody noticed my puncuation was a bit strange!

Vincenzo

ixwood wrote: »

What about the 22 guzzillion new builds that have been built, sorry, thrown up over the last few years? Are rents really rising?

And rising yields sounds good, but that just because values have come down! It doens't make it more, just a higher %!

So,,, buy a place for 100k, getting say 5% yield at the time! Prices drop a further 10 %, the yield on the value to rent goes up, but not on the price paid! They've just lost 10k,

PS My full stop key is broken, in case anybody noticed my puncuation was a bit strange!

See this thread for my views on many new builds....

http://forums.moneysavingexpert.com/showthread.html?p=9543847#post9543847

Also my point about yields is on 'Initial yields'. It is pointless to calculate a running yield of property based on the market value today since this has no bearing on what the investor actually paid or their costs of owning the property (ie mortgage interest).

In many areas rents are rising. This coupled with falling prices will make investing in new properties look attractive.

Vincenzo

brit1234 wrote: »

What happens when properties continue to fall and it starts to significantly wipe out buy to let portfolios equity. Banks aren't just going to sit there and say fine they are going to want the landlord to invest capital to reduce the risk for the lender. I'm sure it is written into buy to let mortgages.

On top of that what about the complete disappearance of the higher LTV buy to let loans over the last month. Investors are starting to panic as they come to remortgaging and are now finding it near impossible to buy further properties.

No more Paragon, Mortgage Express, The Mortgage Works, Bristol and West lending. Whats the game plan now?:rotfl:

As far as I know the mortgage companies' cannot ask for extra funds to reduce their risk, unless of course your fixed/discounted rate somes to an end and you try to re-mortgage. Whether they will, remains to be seen.

Also I suspect the vast majority (save for the new build disasters and recent entries to the market) of BTL investors have sufficient equity to whether a storm. Again this remains to be seen!

Generali

Vincenzo wrote: »

See this thread for my views on many new builds....

http://forums.moneysavingexpert.com/showthread.html?p=9543847#post9543847

Also my point about yields is on 'Initial yields'. It is pointless to calculate a running yield of property based on the market value today since this has no bearing on what the investor actually paid or their costs of owning the property (ie mortgage interest).

In many areas rents are rising. This coupled with falling prices will make investing in new properties look attractive.

Yield is current income divided by current market value and allows a standardised way of comparing investments.

If you want to use price paid then that's fine but that's also not yield.

I agree with you that rents are rising BTW and I suspect that they will continue to do so until the credit crunch hits the real economy in a while (probably 6-12 months at a guess) at which point I also suspect that they will start to fall pretty quickly as housing benefit rates get capped to try and cut a soaring welfare bill.

Turnbull2000

Is it just me, or are the 40 somethinks the generation who purvey a certain smugness the most?

Digital Spy mortgage thread

Paid my mortgage off at the ripe old age of 43 (2 years ago).

The thought of renting for say another 37 years would fill me with dread and horror!

I can afford to holiday where I like, make extra pension payments etc.

I accept I was lucky to buy when property was cheaper but at the time it was a struggle. I overpaid my mortgage every month and paid it back about 10 years quicker.

I have added double glazing and central heating which have added value to my house.

The freedom to do what I like, when I like, work the hours to suit and travel the world would not be afforded to me if I had to pay someone over £200K in future rent.

Renting is dead money.

My aim, at current repayments / overpayments, is to be mortgage-free by the time I am 45. I intend to pick up two more houses in 2009, which would leave me with 4 rental properties, and my own house by the time I am 45

That, in addition to another 15 years or so working at my current rates, adjusted for inflation, would leave me sitting pretty into retirement

Renting is dead money, seconded. I would rather pay off my own mortgage, with interest, than somebody elses

rrwfotr

Turnbull2000 wrote: »

My aim, at current repayments / overpayments, is to be mortgage-free by the time I am 45. I intend to pick up two more houses in 2009, which would leave me with 4 rental properties, and my own house by the time I am 45

That, in addition to another 15 years or so working at my current rates, adjusted for inflation, would leave me sitting pretty into retirement

Renting is dead money, seconded. I would rather pay off my own mortgage, with interest, than somebody elses

That's all very good when the base rate is 5% but when it's 10 - 15 % it's not, simple economics really.

pickledpink

But the base rate ISN'T 10%!:money: