There will not be a crash

Laughing_Man_2

Having read this thread I fell compelled to post even though I have nothing of merit to contribute.

Those that are arguing with dangerthingy, did you seriously expect to persuade him that anything could go wrong in the property market, or the small part of it he claims to own? He was only looking to stroke his ego.

This country, well its population anyway, has alot invested in its housing stock, both literally and figuratively. We all need this housing boom to have really been about supply and demand, not credit and speculation. We need BTL to be a legitimate investment strategy that can outperform a traditional pension, in which only a very few invested poorly. We definately need a soft landing to be a plausible outcome for a bubble this big, despite what may have happened or be happening elsewhere. Or as a worst case we need to able to believe that a crash, if it comes, will only affect a very small number of us in a limited sort of way; that such a huge upswing means we can't have far to fall. Because the alternatives to these views are too dire to contemplate. So most people will insist these things are so with no real interest in conflicting information.

I'm not claiming any special knowledge for myself about this and I won't bother with facts or figures or even my own opinion (although I think you can guess what it is). I only ask those that agree with the statements above: have you truly, objectively, dispassionately evaluated the entire range of information available to you? Or do you believe merely what you need to?

Laughing_Man_2

Having read this thread I fell compelled to post even though I have nothing of merit to contribute.

Those that are arguing with dangerthingy, did you seriously expect to persuade him that anything could go wrong in the property market, or the small part of it he claims to own? He was only looking to stroke his ego.

This country, well its population anyway, has alot invested in its housing stock, both literally and figuratively. We all need this housing boom to have really been about supply and demand, not cheap credit and speculation. We need BTL to be a legitimate investment strategy that can outperform a traditional pension, in which only a very few have invested poorly. We definately need a soft landing to be a plausible outcome for a bubble this big, despite what may have happened or be happening elsewhere. Or as a worst case we need to able to believe that a crash, if it comes, will only affect a very small number of us in a limited sort of way; that such a huge upswing means we can't have far to fall. Because the alternatives to these views are too dire to contemplate. So most people will insist these things are so with no real interest in conflicting information.

I'm not claiming any special knowledge for myself about this and I won't bother with facts or figures or even my own opinion (although I think you can guess what it is). I only ask those that agree with the statements above: have you truly, objectively, dispassionately evaluated the entire range of information available to you? Or do you believe merely what you need to?

brit1234

pickles110564 wrote: »

Here you go again nothing to back your facts up, unlike the ones I have provided for you.

Sorry to have to *iss on your matches but house prices not falling in our area, still solid employment, our company taking on new staff for £28k per year with no previous expierence, salary goes to £35k after 3 years as long as you have got a good service record.They can do overtime to boost salary to £40k plus and all they need is a clean driving license.
So as in your famous statement
If you have nothing helpful to say then !!!!!!.

Pickles
You are so 80/90s. Let me explain things simply to you. The house price crash won't be caused by unemployment so all your employment cr*p is just cr*p. If you look at America they had low unemployment and low interest rates. It was the credit crunch and overvalued properties which is causing the crash leading to higher unemployment not the other way round.

The difference in the UK is our property is even more overvalued so further to fall. Repossessions especially of buy to lets is rising rapidly and thats despite record employment. Hasn't it been 5 months of consecutive falls now with number 6 to be announced this week.

The fact that mortgages are being withdrawn by the bucket load every day and lending criteria is back to ten+ years ago means that people can't afford to buy at todays prices. Due to property chains either prices come down or no property will ever be sold.

If you don't believe prices are falling just give us the first 3 letters of your post code and we will input them into the propertysnake website to see if you are telling the truth.:D

http://www.propertysnake.co.uk/

PasturesNew

pickles110564 wrote: »

...our company taking on new staff for £28k per year with no previous expierence, salary goes to £35k after 3 years as long as you have got a good service record.They can do overtime to boost salary to £40k plus and all they need is a clean driving license.

I can do that. GisAJob.

PasturesNew

Just read back a number of threads and feel I want to clarify some stuff and ask for some stuff... so... stuff requests:

1] Mention has been made of the last crash and repossessions. The BTL lending as it is did not exist back then. The current BTL lending was a result of a change in the law in 1996 (?) when ASTs were introduced; this meant that banks would not be stuck with sitting tenants devaluing properties by 50%. So somebody spotted this and approached the banks saying "look, they're short term renters, you can repossess and get them out in a few months" and the gravy train set off.

2] Some people are confusing residential mortgages with BTL lending. BTL lending is a commercial loan and has the ability to be recalled quicker and more ruthlessly than residential mortgages. Residential mortgages/real people are dealt with more sympathetically and there are rights. With BTL it is simply a defaulted transaction that needs to be addressed; there's no fair/unfair about it.

3] While I do not dispute the existence in (all?) BTL contracts of a clause requiring the borrower to maintain their LTV, I'd like to see two things, especially from Squattie:
3a] A number of links to well known BTL organisations where the clause can be seen by all
3b] Links from reputable landlord/property/mortgage websites where people were experiencing this problem and were being asked for a top up cheque and were on the boards asking for help; these posts should be from people who actively posted on those boards prior to 31/12/07 as some measure of authenticity and whose history can be seen (if anybody cares to) reading back through their BTL journey to the point where they've suddenly been hit with the letter.

Seems fair.

OK, said my bit. Hoping that might set a few things straight for a few people maybe.

PasturesNew

brit1234 wrote: »

If you don't believe prices are falling just give us the first 3 letters of your post code and we will input them into the propertysnake website to see if you are telling the truth.

http://www.propertysnake.co.uk/

I was religiously watching propertysnake until I got property bee.
I've not been to the snake for a month.
Previously there were about 6 properties over 20% listed.
I just checked. None.

While propertysnake is interesting, it only shows a peek through the keyhole. The 6 that in my area have disappeared off the listing could have been in any one of the following groups:
1] Repossessed because nothing is selling/now auctioned
2] Sold at the lower price
3] Removed from the market due to lack of interest
4] Rented out in desperation
5] Overnight it all became "OK" and property's racing ahead 'business as usual'

And I am sure others can think of other valid reasons why nothing right now is showing in my area over 20% where they have consistently existed since last Sep/Oct at least.

I've also noticed propertysnake data seems quite dated. So something not quite right in all cases there.

I wouldn't quote propertysnake as an indicator for a market now. Now I'd recommend property bee as it is a bigger keyhole through which to look. But still only a keyhole.

The next tranche of property reports will be out in about 9 days' time. I wonder what they will show.

Update: I was being a right idiot... I'd just keyed in my first 3 digits .... whereas what I was monitoring before was my town. Just checked my town and there are now 12 properties at or over 20%, two of which are at 30% off.

baileysbattlebus

The_Dangerman wrote: »

Apology gladly accepted, now lets get back to business.

I am disputing the likelyhood of the lender asking me to caugh up to meet the LTV ratio. I'm not saying it can't happen, I'm saying it's so unlikely it just doesn't even come close to blipping the old worry radar. I worry more about about a pack of rabid ferrits muching on my testicles(sorry, nicked from Life On Mars) than I do about maintaining my LTV ratios.

As for what to call it, EVERYONE I know in the industry (and thats a lot) call it a mortgage, that may not be what it actually is and yes, there are of course differences, but I will continue to call it a mortgage. Simply because people understand what I mean. But I like the idea of of calling it a badger:rotfl: I can picture it now "Doug, what's the best badger you can get me out this house" :rotfl:

It is a mortgage for all intents and purposes, until 1996 a commercial loan was the only way to buy an investment property and commercial loans can have an annual review.
BTL mortgages were introduced in 1996, Bradford and Bingley were the first, they differ from commercial loans as they allow the rental revenue to be considered as income. They are very similar to a standard mortgage you would have on your own howm, some lenders even offer flexi BTL loans, with payment holidays etc.
I would imagine that only professional property investors or those with mixed property, like shops and flats will now have commercial loans and I would think, perhaps wrongly, that most people posting on here are not professional property investors.

Generali

brit1234 wrote: »

Pickles
You are so 80/90s. Let me explain things simply to you. The house price crash won't be caused by unemployment so all your employment cr*p is just cr*p. If you look at America they had low unemployment and low interest rates. It was the credit crunch and overvalued properties which is causing the crash leading to higher unemployment not the other way round.

Even that's the wrong way round, the inability of Americans to pay their mortgages caused the credit crunch.

The linkage went thusly:

1. Traditionally in the US people bought on a fixed rate for the life of their mortgage. They would remortgage if they could get a better rate (and pay off the credit card at the same time). The reason was because a company called Freddie Mac would lend the mortgage company money on a long term fix.

2 Bankers (as businessmen) wanted a new source of income so looked to people that couldn't normally borrow for a mortgage, the poor. To lend to them they used what had been an unusual thing in the US, an Adjustable Rate Mortgage.

3 With an Adjustable Rate Mortgage, after a period (usually 2 years) the interest rate reset (rose) and then a lot of people start to have problems making payments. NB similar mortgages were widely available in the UK in the 80s.

4 The rise in demand caused by more people being able to enter the housing market pushed up house prices. This meant that as poor people defaulted, the bank could simply reposess and sell to get its money back.

5 As the number of repos rose, the supply of houses started to exceed demand. Prices fell and so banks reposessing made a loss.

6 These losses for various reasons have reduced the funds available to lend and is what the Credit Crunch is.

Where we go from here only time will tell. I have my suspicions that it ain't going to be pretty but we'll see.

Please note, nothing burst the bubble as such. What we are experiencing is the impacts of the bubble bursting.

JWF

PasturesNew wrote: »

While propertysnake is interesting, it only shows a peek through the keyhole.

I agree, Property Snake presents a rather selective slice of all the data available and seems to ignore any house that actually sold for the asking price, or where the advertised price wasn't reduced prior to the sale going ahead.

Property Bee for my area shows a small proportion of properties where the asking price has been reduced but not many.

What Property Bee will show you is how long the properties have been on the market, and there are plenty that have been there a good while. My understanding is that the market, at least local to me anyway, has definitely slowed, but there is no clear indication that people are slashing prices to stimulate sales.

merlinthehappypig

JWF wrote: »

What Property Bee will show you is how long the properties have been on the market, and there are plenty that have been there a good while. My understanding is that the market, at least local to me anyway, has definitely slowed, but there is no clear indication that people are slashing prices to stimulate sales.

Overall that is definitely the case.

We've been looking to buy since shortly before the NR problems last year.

My take on the situation judging by the 50 or so properties that we have viewed and several hundred that we have considered viewing is that:

• Properties that have been on the longest are the most over-priced. This is a combination of having been valued at the tail end of a rising market coupled with a reluctance to accept that the market has changed. Properties newer to the market seem, on the whole, to be more competitively priced.
• Regardless of all other factors there is a marked difference between those who have to sell and those who would like to. The effects of the general malaise in the market coupled with the rapidly increasing difficulty in getting mortgages mean that there are fewer genuine buyers than I can ever remember. If you are in the unfortunate position of having to sell in this market then you will have to take a big cut in the asking price.
• As a result the national statistics don't mean squat at the moment. We have a majority of sellers living in cloud cuckoo land refusing to reduce the price and a minority having to reduce by 15% or more to get a sale. The impact of a small number of forced sales at big discounts won't have much of an impact on the 'average price', but are more indicative of where the market is heading.

How all this will impact on the wider market is difficult to predict.