is this our very own Grandin?

[grandin]

cheeky pint

yep cheeky pint....stopped going to that haunt when i was 18....do you visit seven red roses??

I have aged since the drs case so fine lines have appeared since that pic was taken

Property Market...Roger Bootles account ie. threat of deflation was a good read but I posed a question...he never answered.

The best thing labour ever did was to empower b of england to deal with interest rates.....small increments will tighten the screw slowly making any knock effect slow...

The market will tighten BUT and a BIG BUT

We live in a luxury land where houses have become a luxury item. An item that is desirable and in short supply will remain a luxury until everyone has one a bit like a hair iron now as opposed to a hair iron 1 year ago.

Expect to pay a premium for your home for at least 20 years...thats if building works keep up at the current rate

Lee

 

[olebean]

fine lines have appeared since that pic was taken

Lee

I wouldnt call them fine, they are as rough as an old dog! :twisted:

 

[gimpydog]

The market will tighten

Lee

So what level will interest rates have to achieve before the bubble bursts?

I remember having negative equity & before that nearly throwing myself of the church roof I was slating when Lamont put the rates up 5% in one afternoon.

Lots of the buy to let business models rely on very high gearing. There is a whole generation who have grown up with single digit inflation & base rates.
Reposessions are rising again, albeit at a fraction of the levels seen before.

Is it time to get out or get in?

 

[grandin]

Clever

Labour have truly brought stability by empowering a cautious bank of england.

It will hurt little....

I have a pin

There is a line

You have stepped over that line

...I prod you with my pin...it hurts a little so you think twice about going over the line again.....many prods dont make you a prick

Moral of this one....many prods not many pricks!

Lee

 

[retired_member6]

Labour have truly brought stability by empowering a cautious bank of england.

It will hurt little....

I have a pin

There is a line

You have stepped over that line

...I prod you with my pin...it hurts a little so you think twice about going over the line again.....many prods dont make you a prick

Moral of this one....many prods not many pricks!

Lee

Labour brought stability? you call 70% f***ed on the housing market, stability?

 

[retired_member6]

So what level will interest rates have to achieve before the bubble bursts?

I remember having negative equity & before that nearly throwing myself of the church roof I was slating when Lamont put the rates up 5% in one afternoon.

Lots of the buy to let business models rely on very high gearing. There is a whole generation who have grown up with single digit inflation & base rates.
Reposessions are rising again, albeit at a fraction of the levels seen before.

Is it time to get out or get in?

Let that bubble burst and burst big and soon! 1.7 million unemployed, it's only a matter of time.

 

[Beasty]

An item that is desirable and in short supply will remain a luxury until everyone has one a bit like a hair iron now as opposed to a hair iron 1 year ago.

What is a hair iron? And were they once luxury items? :???:

 

[grandin]

ask ghd

ask ghd...

 

[disruptive]

¨Expect to pay a premium for your home for at least 20 years...thats if building works keep up at the current rate¨

So what you are saying that the market is not driven by supply and demand and that somehow people will always overpay for their houses? We can all see the tower cranes hovering over the horizon...and most of the developments are sold to buy to letters. Is this real demand that developers are responding to, or is there some market bubble that is causing people to snap up b2ls. Trouble is many are going without tenants.

Some of the flats and apartments for sale I can see falling in value significantly as there are so many of them.

I don´t think housing is a luxury. Typical home ownership is in the 90% bracket, so most people consider it a necessary essential.

Am in two minds to ditch my portfolio!

 

[retired_member6]

¨Expect to pay a premium for your home for at least 20 years...thats if building works keep up at the current rate¨

So what you are saying that the market is not driven by supply and demand and that somehow people will always overpay for their houses? We can all see the tower cranes hovering over the horizon...and most of the developments are sold to buy to letters. Is this real demand that developers are responding to, or is there some market bubble that is causing people to snap up b2ls. Trouble is many are going without tenants.

Some of the flats and apartments for sale I can see falling in value significantly as there are so many of them.

I don´t think housing is a luxury. Typical home ownership is in the 90% bracket, so most people consider it a necessary essential.

Am in two minds to ditch my portfolio!

The rental market is stagnant, not surprising when you consider so has the wage packet for the last ten years. There's reasons for house prices being the way they are, one of them is so those those retiring have some cash and it's more money for the government.

They don't care that you aint got nowhere to live - but also they believe Southern England is going to be the Costa Del Kent meaning holiday lets and most of those europeans over there prefer rentals to mortgages anyway so I would be surprised if that mad scot isn't trying to encourage that here as well. Alas the government can't find job creation and building on flood plains aint going down too well.

The country is up the spout, black wednesday couldn't come quick enough. 1.7 million unemployed, more immigrants coming in, expect that to reach 2.5 million within a year as we continue to sell business to asia auntil we own known of our own - capitalism you've got to love it, soon the EU with the backing of the British government will cause an house price crash in this country by declaring "we will pay British people to settle in eastern europe"

What? that'll never happen? they already pay Londoners to leave London and move up North so think before you object to it.

 

[Beasty]

ask ghd...

Didn't know what/who ghd was until I read your case!

 

[grandin]

Dis you wrote 'So what you are saying that the market is not driven by supply and demand'

No, it is driven by high demand but there is a genuine lack of supply....the number and rate of planning permissions needs to be addressed if supply is going to catch up....until then it will remain a luxury item.....we want it but can't have it

Landlords, with a no chain product ie. the buy to let mortgage, are favourable to developers and house sellers so maybe they get first refusal??

When you talk about flats in blocks it is true (short term).... Lender's buy-to-let loans ban | This is Money

Time and time again over 7/8 years I see swings....this is because its a very balanced investment...income and capital appreciation balance themselves (rents will rise if capital appreciation decreases......but its down to interest rate movements....push them up high and we all suffer...a little at a time and the equilibrium will be met)

Nope GHD didn't exist in 1999...saying that why would we know beasty we don't straighten our hair...or do we?

Lee

 

[disruptive]

I don't how the income as you say will step up at times of low capital appreciation. What happens in times of negative appreciation? We are seeing the lowest rental yields for years, which means that people are willing to sacrifice yield and income now for some future appreciation...that may not happen.

There is an oversupply of rented accommodation. Its the renters dream, they are pushing down the rents due to competition in some areas and are seriously depressing yields, but still the b2l ers pile in with the grand expectation of serious capital appreciation.

So the inability to find tenants coupled with an oversupply of property which is coming on stream. Don't forget to add in the inertia component of the building which means that ever more building are coming on stream and most of those are flats. Its going to lead to increasing defaults on the mortgages, we are beginning to see that a great many properties repo'ed are b2ls.

If you cannot pay the mortgage how can you hope to hold to investment long enough to enjoy capital appreciation? But I will agree with grandin that during the fallout its going to make property a lot cheaper to buy and perhaps increase rents, but also those renters may now consider buying their homes instead of renting...thus snowballing the decrease of tenants and killing the b2lers dream.

We have never seen so much property in decades which has been available for rent...its only a matter of time before mean reversion occurs.

We are in a lose - lose position. Whatever happens everyone is in for a rocky road ahead...rising house prices are no good for the economy or the vast majority of people.

 

[aqls]

here here, that's been my argument for 14 years

-aqls-

 

[grandin]

The point is lost

The point is lost...

demand and supply

demand is strong and supply is low

short term investor flooding is clearly evident and always has been, that is the problem with new build. Furthermore, you pay a premium for your shiny new flat but this has no reflection on increased rental income. Read the CML recent report that clearly defines second hand properties as a better bet....something I have known for years....no effort gives no results unless your are riding lucky as in the last 7 years property boom

The overiding factor to determine where house prices go is this:-

Interest rates
The number of people in work

I cannot control the above two factors and I don't know anyone who has properly predicted where they will be in a given period of say one year, 5 years, 10 years.

IF the above two factors remain static and we have:-

Low supply
High demand
??

Think of this.....if what you say re: letting rates is correct then buy to let mortgage arrears would be climbing significantly BUT currently they are not and are actually lower than first time buyer arrears.

With new build properties my evented term 'Investor Flooding' holds true.

I did read that in the US it takes about 7 years to get out of negative rental yields but they still invest without a market crash....I think we are well positioned in that respect.

Our opinions are our opinions and I think a cautionary approach is also the safest bet but some, including me, don't follow safest bets....we follow calculated risks and some will always turn sour.....mistakes lead to success

Dis you wrote 'We have never seen so much property in decades which has been available for rent...its only a matter of time before mean reversion occurs.'....don't be decieved by an unoccupied property or loads of to let boards....like a domain that drops off every two years it gets picked up within days BUT 1000's upon 1000's get deleted daily.....30000 domain name for sale boards go up for the day or more like the second!!!

renting is all about changing tenants so what indication do you have of unlet properties that isn't sustainable??

Lee

 

[disruptive]

It is certainly my experience that plenty of defaulted ex landlord property is entering the market. With such tight margins late entrants into buy to let are struggling to pay the mortgages and with voids increasing it only follows they are coming to auction. In fact I did read a report that 50% of auctions are now ex landlord property.

When looking at property to buy, again my experience, one finds that property is often left vacant because...no tenants. I see some properties which have not had a tenant for 10-12 months. That means the owner pays the mortgage...but then what...when does the vendor decide enough is enough and put the property on the market or lower the rent subsidizing the mortgage out of their own pocket.

When one goes to a property launch event, its full of investors...where are the owner occupiers...what is this saying about the market and stability? Id love to see some genuine buyers who want to live in the property rather than seeing it as a ´fast buck´. I dont want to buy property in areas where I am competing like crazy for the same tenants!

Recent b2lers are going to be hardest hit as they dont have the cushion...so many people want to be property developers...these guys are artificially inflating the prices, but when the REAL sustainable demand rears it head things will be different.

Every man and his dog are into property....and as someone more famous than me said:

When other people are greedy I get scared
When other people are scared I get greedy.

 

[olebean]

With such tight margins late entrants into buy to let are struggling to pay the mortgages

not all margins are tight, a landlord I know is making 20-25k on a 100K property

 

[grandin]

Dis

Dis, if you are telling me second hand properties in rental areas are not letting then I have to disagree.

If you are talking about new build properties where you pay a premium which is not recoverable in a static market then thats different.

At least 80% of my landlords buy in the second hand market in good rental areas.

I use to think...oh everyone is in buy to let it has to burst.....but it still represents less than 15% of housing stock....

Based on experience we find alot of lookers but not many doers...so many will look at it and watch sarah beeney but when it comes to the crunch the don't go ahead.

being a landlord seems cool but not many actually do it because they can't even be bothered to find the right property....they give up on rightmove because the first house they look is taken when they phone

Lee

 

[Hazel Pegg]

When one goes to a property launch event, its full of investors...where are the owner occupiers...what is this saying about the market and stability? Id love to see some genuine buyers who want to live in the property rather than seeing it as a ´fast buck´.

That's similar to how I feel about domain registrants

Hazel

 

[disruptive]

Olebean,

If you know where your friend is getting a 25% return on his investment, I would not hang around here and I would be spending some of that ´cash´ I have on a similar property...

However I suspect your friend did not buy the property recently in which case I could show returns of even more than 25%.

Give me the details...I have cash to spend.

Grandin, Yes I know plenty of second hand property that is available to buy and rent as the owner cannot find tenants... In fact the damn estate agents wont leave me alone and are desperate to find a buyer for some of these! They practically wet themselves when I expressed interest.

There are some blocks of 5 year old property (flats) that are like DSS houses, no owner occupiers...full of tenant turnover. The slums could be back and coming to an apartment block near you!