'BTL Landlords go long'

IveSeenTheLight

dopester wrote: »

Yes you are right of course... different areas will not drop in uniformed percentage terms every month.

However have your a spoonful of this to cheer you up about your peak 2007 purchase.
Quote:
In fact, the pace of the falls has accelerated during the past 30 days, according to property valuation website Zoopla.co.uk. Average house prices will fall by £310.73 a week this year and by almost £1,000 in London, it predicted.

1) My properties are not in London

2) A 30% paper valuation drop over the next few year would not result in the property being worth less than I bought it, less than the outstanding mortgage and in that period, I have had tenants who are paying more than the mortgage payments further reducing the LTV

So don't need a spoonful of anything and I don't need to be cheered up.
I admit I have taken advantage of HPI over the last few years, hence why I am not too concerned by anyprice corrections

dopester

IveSeenTheLight wrote: »

2) A 30% paper valuation drop over the next few year would not result in the property being worth less than I bought it, less than the outstanding mortgage and in that period, I have had tenants who are paying more than the mortgage payments further reducing the LTV

So don't need a spoonful of anything and I don't need to be cheered up.
I admit I have taken advantage of HPI over the last few years, hence why I am not too concerned by anyprice corrections

You might want to closely look at research from previous deep recessions and depressions.

In modern day news reports they might pay some lip-service to what happened with a sweeping statement (such as 30% falls in house prices) where some areas actually fell much further in percentage terms... including in the Great Depression where $1 million prime New York homes exchanged hands for less than 10% of that in the early 30s.

In recent months some UK apartments have already gone to auction and been offloaded for -50% less than peak value.

If you want me to accept prices won't fall uniformly in all areas, I ask you to remain open that some areas will suffer falls disproportionately to other areas, and I trust your 30% buffer will see you through. And please throw in a possible avalanche of redundancies in to your mix.

Vincenzo

dopester wrote: »

In recent months some UK apartments have already gone to auction and been offloaded for -50% less than peak value.

Whilst it is true that some properties have been sold at c. 50% less than the original purchase price, it is not true to say that it was 50% less than 'peak value'. These were new build 'apartments' that were sold at over inflated prices as part of what I believe to be the biggest selling scandal since endowment mortgages. They were never worth what the original purchasers paid.

Although it was HPI and the accompanying optimism that allowed this situation to arise, this sector of the market was in trouble long before the housing market showed signs of wobbling.

dopester

Vincenzo wrote: »

Whilst it is true that some properties have been sold at c. 50% less than the original purchase price, it is not true to say that it was 50% less than 'peak value'. These were new build 'apartments' that were sold at over inflated prices as part of what I believe to be the biggest selling scandal since endowment mortgages. They were never worth what the original purchasers paid.

Although it was HPI and the accompanying optimism that allowed this situation to arise, this sector of the market was in trouble long before the housing market showed signs of wobbling.

Accepted and no argument from me - especially the last paragraph which sums up why they over-paid.

A frenzied bubble like this continues on till it's taken in nearly everyone that's likely to buy in to it... and 12 years of HPI and illiquid increases in value on their own homes must have given them confidence and optimism it was good times forever.

dannyboycey

I wonder what these guys are doing...

http://www.guardian.co.uk/money/2006/dec/16/business.houseprices

Vincenzo

dannyboycey wrote: »

I wonder what these guys are doing...

http://www.guardian.co.uk/money/2006/dec/16/business.houseprices

'But Fergus Wilson predicts that prices will double every seven years and says the typical property he owns - a £200,000 two- to three-bed starter home - will cost £400,000 by 2013, £800,000 by 2020 and £1.6m by 2027.'
:rotfl:

IveSeenTheLight

dopester wrote: »

If you want me to accept prices won't fall uniformly in all areas, I ask you to remain open that some areas will suffer falls disproportionately to other areas, and I trust your 30% buffer will see you through. And please throw in a possible avalanche of redundancies in to your mix.

:rotfl: :rotfl: :rotfl: :rotfl:
I have said many times that an average means there will be worse and others better than the average. This is what average means.
So I remain open as always that there are regional differences and that some areas and property types have a much higher risk than others

Regarding the 30% buffer, this is just to what I paid for my last property.
I have also reduced the LTV further via overpayments, meaning my buffer before negative equity is actually about 45%. The property is on a long term low interest (5.69%) fixed rate (another 3 1/2 years to go) and I don't have a mortgage to pay for myself meaning my disposable income is far higher.

Because of this, I'm extremely sure that my risk is very minimal

dopester wrote: »

Just plain childish and trying to be antagonising.

dopester

IveSeenTheLight wrote: »

:rotfl: :rotfl: :rotfl: :rotfl:
I have said many times that an average means there will be worse and others better than the average. This is what average means.
So I remain open as always that there are regional differences and that some areas and property types have a much higher risk than others

Regarding the 30% buffer, this is just to what I paid for my last property.
I have also reduced the LTV further via overpayments, meaning my buffer before negative equity is actually about 45%. The property is on a long term low interest (5.69%) fixed rate (another 3 1/2 years to go) and I don't have a mortgage to pay for myself meaning my disposable income is far higher.

Because of this, I'm extremely sure that my risk is very minimal

How many properties have you got again? Just 2 or more? One mortgage free? (nice) but just trying to determine if your at risk of BTL margin calls with others.

Fair enough about you having accepted regional variances. I commend you for taking steps to acknowledge risks and protect your position rather than just assuming it will pass over and we'll be back to HPI soon enough.. as many others here seem to.

Chill.. the spoon thing was just a joke, with a loads of extra spoons there in anticipation of tasting many other bearish events to come.

brit1234

Its funny to see now that buy to let investors are finding out about Margin Calls. Lots of them are now reading their mortgage details very carefully to check their liability. I reckon the next six months will be the era of margin calls in the press.:D

BobProperty

I've said before I don't think margin calls will be a problem. What I do see is going to be a problem is the rent v mortgage ratio. As lenders initial deals end or just because the lending dept is quiet, lenders may well start to check more thoroughly the details and documentation of their portfolios. Not only are the 85% ltv city centre new build luxury apartments not going to meet their ltv at some review, but their rent, which the novice landlord was told would be £800pcm, is now £600pcm due to the market, will not meet the rent v mortgage ratio. Lenders will have to make some decisions on what they do at that point. It will be interesting to see what policies which lenders adopt.