Moneyweek: Why the buy-to-let carnage is just beginning.

Generali

!!!!!!? wrote: »

It seems to me that bankruptcy would be a very sensible option in this case.

Assuming that the house was in negative equity and the person could service that debt, they might be able to do a deal with the lender and O.R. to keep it.

They have the stigma of bankruptcy of course and lose credit access but they could clear all their other debts which should give them enough headroom to make the mortgage payments. Would have left them set fair for the late 90s in retrospect.

On the other hand, back then there probably wasn't as much of an issue with personal debt other than the mortgage..... shows how much our attitudes have changed when we take it for granted that anyone who can't pay the mortgage must also have a ton of credit card/ loan/ overdraft debt.

I remember teenaged contemporaries getting into trouble with credit cards and overdrafts in the late 80s. They'd owe a couple of thousand or something. An amount of money that would keep you awake at night 20 years ago doesn't even register as a proper debt these days!

WTF?_2

Generali wrote: »

I remember teenaged contemporaries getting into trouble with credit cards and overdrafts in the late 80s. They'd owe a couple of thousand or something. An amount of money that would keep you awake at night 20 years ago doesn't even register as a proper debt these days!

Irrespective of inflation, people's perception of the worth of money has changed. Even a couple of grand is a lot of money for the average person when you consider what you could get with it in terms of buying the essentials.

However, in an age of seemingly limitless access to credit no-one really appreciates the worth of having cold, hard cash in the bank. Amounts of money in the single digit thousands suddenly seem like small change to a person who maybe earns 25k a year (average wage) and would take a year, two years or more to save that amount from their income. As long as the pressure isn't on to repay that 5k of card debt, no-one gives it a second thought.

Think about it spendthrifts; If you have say 5k of debt and it's increasing then you have no money. Should credit not be extended you are in the do-do. If you lose your job, you are really shafted.

If credit card companies start cutting back generally, and I don't see how they can avoid this as the economy goes south, then that'll probably hurt the general public more than any amount of price rises or house price falls.

RenovationMan

As we also have some discussions about the impending demise of BTL due to 'rising mortgage rates', I think it's useful to see similar predictions from the past and see how they panned out.

Did BTL go under as described?

HAMISH_MCTAVISH

Another classic Moneyweek article.

Flight2quality

Hamish why are so many on here against you? Do you ever wonder?

I had this PM but you will never knwo who...

Hi flight

I admire you bothering to post on a forum infested with property bulls who can't cope & thus resort to ridicule. However may I say you are wasting your energy by doing so?
Cgnao started here (on 'savings') in 2004 warning of the collapse & only gold will protect etc, & still investment 'advice' consists of comparing ISAs !!
Hamish always goes for ridicule but if you throw it back at him he goes off whinging & gets the post (or thread) removed. So why bother? Why not join a forum like purely for example ) 24knews ? & leave these idiots to themselves.
None of my business & I'm totally out of order.
Best wishes

Flight2quality

Hamish why are so many on here against you? Do you ever wonder?

I had this PM but you will never know who...

Hi flight

I admire you bothering to post on a forum infested with property bulls who can't cope & thus resort to ridicule. However may I say you are wasting your energy by doing so?
Cgnao started here (on 'savings') in 2004 warning of the collapse & only gold will protect etc, & still investment 'advice' consists of comparing ISAs !!
Hamish always goes for ridicule but if you throw it back at him he goes off whinging & gets the post (or thread) removed. So why bother? Why not join a forum like purely for example ) 24knews ? & leave these idiots to themselves.
None of my business & I'm totally out of order.
Best wishes

?????

ess0two

Flight2quality wrote: »

Hamish why are so many on here against you? Do you ever wonder?

I had this PM but you will never know who...

Hi flight

I admire you bothering to post on a forum infested with property bulls who can't cope & thus resort to ridicule. However may I say you are wasting your energy by doing so?
Cgnao started here (on 'savings') in 2004 warning of the collapse & only gold will protect etc, & still investment 'advice' consists of comparing ISAs !!
Hamish always goes for ridicule but if you throw it back at him he goes off whinging & gets the post (or thread) removed. So why bother? Why not join a forum like purely for example ) 24knews ? & leave these idiots to themselves.
None of my business & I'm totally out of order.
Best wishes

?????

Best run along to the other forum then,its full of like minded individuals like yourself.

chucknorris

Flight2quality wrote: »

Cgnao started here (on 'savings') in 2004 warning of the collapse & only gold will protect etc, & still investment 'advice' consists of comparing ISAs !!

It's not 'advice' it's 'debate' and it is not limited to comparing ISAs, on the savings board I have discussed many things:

Avoiding the 60% tax band (between 100k and 115k)
Commercial property investment
Freehold residential investments (ground rent investments)
Guaranteed equity bonds
Bond funds
Individual corporate bonds
Fixed rate savings bonds
Premium bonds
Ftse trackers
Individual shares

and of course both cash and stocks and shares isas

HAMISH_MCTAVISH

Flight2quality wrote: »

I had this PM but you will never know who...

Most probably another of the sockpuppet voices in your head, annoyed that the price of Silver has crashed by 40% this year......:rotfl:

Flight2quality wrote: »

Hamish why are so many on here against you? Do you ever wonder?

No, I know exactly why, thanks.

julieq wrote: »

Hamish, who's arguably the arch bull, posts accurate numbers with commentary and draws accurate conclusions - he did win the 12 months pricing competition very comprehensively.

He's hated because he debunks gleefully, not because he debunks inaccurately.

If you listen to him and follow his reasoning you're likely to make better judgements more consistently than if you listen to any of the bears.

Blacklight

This is the same moneyweek that advised everyone in Jan 2009 at the bottom of the market to get out of property, rent any buy later:

Property: is it better to trade up or get out?

Jan 23, 2009

Hamptons International believes the chance to buy a bigger property more cheaply is the "number-one reason to sell at the moment". But a deal-starved estate agent would say that and we're not sure he's right. Selling, renting and then waiting may be a better bet.

Best of all, there are so many sellers out there holding out for price rises by renting out their properties that tenants are being spoilt both in terms of choice and price. In London, for example, residential rents fell as much as 15% last year due to new properties flooding the market

House prices went up at that point and rents rocketed.

moneyweek lol