Reply With QuoteScottish Government is ahead of you.Originally Posted by thegreatdogwood
https://www.bbc.co.uk/news/uk-scotla...s-63164850.amp
Fairly low. Whilst leverage has always been a key ingredient of BTL's because of modest triple net yields, the changes to tax reliefs drove a lot of private BTL landlords out of the market a number of years ago. The market is still structurally under-supplied with housing for the rented sector, which is why the likes of Legal and General have launched massive PRS (Private Rented Sector) investments.
BTL Landlords will be in for a tough time as inflating rents at the same margin as debt cost increases is unsustainable too, so you'd need to be able to hold for a while and fund off an income deficit. It will be the level of forced sellers that determines the magnitude of market correction, inertia will only last for so long then I suspect the Government will come under pressure to introduce further legislation to protect tenants / homeowners
Scottish Government is ahead of you.
https://www.bbc.co.uk/news/uk-scotla...s-63164850.amp
Pretty much every landlord I know has almost no debt. The majority are baby boomers who have been in the business for decades. This stereotype highly leveraged BTL landlord is a creation of the doom mongers who are hoping to see a property crash. I think most landlords will be fairly untouched by the increased borrowing costs.
The people who I see wanting out are mainly thinking that way as they are of an age where they simply can’t be bothered any more and are fed up with the ever increasing regulation. Plus they may take the view that future capital growth may be a bit thin going forward.
All baby boomers, without any debt. Yeah, right.
We all watch Homes Under The Hammer, LOL.
What makes entertaining tv and YouTube video isn’t necessarily reflective of reality. Just saying.
I thought it would take a bit longer, but we have gone from a slowdown but everything is fine, to 10% falls, and now the market is overvalued by 30% has reached the mainstream media.
https://www.thetimes.co.uk/article/h...fall-jq83xpcmd
https://news.sky.com/video/house-pri...nd-30-12717367
It took the Chief Economist of Oxford Economics to work that out, whereas anyone studying for a GCSE in maths and typing Google mortgage calculator could have arrived at the same conclusion in a few minutes.
Who would have thought house prices are primarily based on affordability until it comes out of a Chief Economists mouth.
Just wait until the Daily Heil and Daily Sexpress get hold of it and slap it on the front page.
Rather than quote media sensationalism, what is the market looking like where you live?. No guff, no spin.
When you look long into an abyss, the abyss looks long into you.........
Here is some data rather than opinion …
10 days old …
https://www.nationwidehousepriceinde...s-in-september
Well the asking price of this place has been reduced by a quarter of a million pounds or 22% reduction. Just click on listing history. I know utter insanity even at the reduced price, but that is Kingston for you.
https://www.zoopla.co.uk/for-sale/de...e40194f0f4655b
25% off this flat since it was listed
https://www.zoopla.co.uk/for-sale/de...e40194f0f4655b
20% off this house since it was listed
https://www.zoopla.co.uk/for-sale/de...e40194f0f4655b
You get the gist.
Totally backward looking. Nothing advertised in September has sold yet. Nothing advertised in August has probably sold yet.
Doesn’t begin to include monumental shake up in mortgage market.
It will be 3 months before you see surveys like this giving any real indication.
Carry on clutching at straws.
This is the development next to mine! It is about 150 metres away from where I live!
They've priced that at around £625 per Square foot. That is in an older development but seems fairly modernised.
Here's one in my actual development where I live. Literally 150 metres away.
https://www.zoopla.co.uk/for-sale/details/62569376/
That's more modern and priced at just over £1k per Square ft but unlike the one you listed doesnt have a dedicated parking space - you'd need to fork out another £220 per month to park in the underground car park. So bearing that in mind the one you listed looks a comparative bargain and would rent out at around £1600 per month. I've no BTLs so no idea if that's a good yield or not btw but if we take again one in my development - this time ome of the smaller 2 bedders only 50 sq ft bigger than the one bedder you listed (and with a horrible pillar in the lounge that blocks off space) they want £2600 a month in rent for that;
https://www.zoopla.co.uk/to-rent/details/62494403/
So huge price discrepancies literally within a next door radius.
Last edited by ryanb741; 11th October 2022 at 05:46.
Respectfully same question to you Chris...how is it up in Norf Yorks?
As I posted yesterday, 3 houses in our street have gone on the market in September and all have sold. Same story across our town, so it appears any slowdown hasn't yet reached detached family homes in Scotland
Same in North West...property still going on the market and selling...some people talk rubbish and as i have said previously on this thread i will put £500 in fundraiser if property drops 30% on average across England.
Give it a chance. The mortgage market only imploded 2 weeks ago!!
And as I mentioned, with mortgage validity of up to 6 months, many buyers are still going into deals at mortgage rates of 3%. Would they have gone into the same deal at 6%, who knows?
This situation needs times to develop, so I will keep an eye on this thread. Only time will tell, and we will not know who predicted correctly for a couple of years, but will start to get a decent steer in 3 months as lagging data is published.
But, I am sure there will be lots of anecdotes added to the thread in the mean time.
A lot will depend on the rate of unemployment, and whether by trying to kill inflation, a significant recession is created. Unlike 2008, the Government is caught between a rock and a hard place, and all the fiscal and monetary ammo they have left amounts to a water pistol.
The relative youngsters (which I mean those under 50) on this thread have never seen meaningful house price falls in their adult lifetime, but they do and have happened, and are very painful.
Good luck everyone.
I’ve had one viewing in 3 weeks, which under normal circumstances would be fine, but a few months back the stories were of houses selling in a day and 5 or 10 buyers fighting for each property. I don’t see prices falling either, but I think sellers expectations will need to change. All down to luck of course, a house next door but one to me was listed, a guy viewed and offered the seller £5k over list to shake his hand there and then.
I am in a fairly unusual position at present. The wife’s mother passed in March and after probate her and her sister inherited their mother’s 3 bed detached bungalow. We decided to downsize and buy the sister out so are in the process of modernising the bungalow. The bathroom is now at the tiling stage before the final fit and the kitchen was taken away in a skip yesterday. As soon as the bathroom and kitchen are finished and I have decorated the bedroom that we will occupy then we will move across and leave our current house empty and ready for the next buyer.
Even if we find a buyer now the time from agreeing to completion is around 17 weeks, by which time we will be living in the bungalow. The sister is being very helpful and is happy to wait for her half when our house sells. As such ours is listed as no forward chain.
Last edited by Wallasey Runner; 11th October 2022 at 08:21.
If inflation stays at 10% for 3 years and house price do not increase, then house prices have fallen relative to the money of the day by 30%.
In that time you have have lost your opportunity to grow your equity by investing it in other places whether the stock market of just interest on a bank account.
But, I believe there will be actual house price falls in addition to inflation related falls.
Every market has those Uber bears who forecast doom.
I don’t see a 30% drop coming, I expect the market to stagnate and soften with a reduction in volume.
There is still a shortage in housing and a labour shortage so I am not fearful of unemployment.
We will see, doesn’t bother me either way.
I’d rather not live through a recession as it’s all a bit gloomy, but if it comes we will just have to make the best of it we can.
I agree...think house prices will soften and even fall may be 10% but it is the old supply and demand...the population is increasing...house builders can't build enough and even today the BBC announced unemployment is the lowest in 50 years and don't forget only 28% of the population have a mortgage.
I have always been a half glass full person and approaching 60 have seen it all before.
Off walking the dog and enjoying the countryside as the world is still spinning and i have another day on this wonderful planet.
In that case the value of your mortgage has been eroded by exactly the same percentage...
I also did the maths and took 30% off my house price from when I bought it 3 years ago - seems very unlikely. However I certainly see a stagnation in the market here already as no enquiries to buy my house from the builder in weeks.
I'm in the position where I've part ex'd my current house against a new build that's not yet ready for a couple of months. So although I know if I'd waited to buy the new property without a part ex I could get it cheaper, yet unlikely to have managed to sell my old house.
I'm an optimistic kind of guy so my take is that I'm lucky with the timing and approach - no one's going to gazunder me!
And flawed. Based upon mortgage applications and valuations, not on prices physically achieved upon completion. There is always a systemic lag to property benchmarking, that was clear as day in 2007 when the market hit the buffers in August but it took most data sources until December to reflect that. Average prices are falling and deals being re-negotiated / aborted, the only thing that is unclear is by how much and for how long.
Data - source, cleaning and sample size
Source
All house price information is derived using Nationwide mortgage data. This data is extracted monthly from mortgage applications
at the approvals stage and after the corresponding valuation has been completed. Approvals data is used as opposed to mortgage
completions since it should give an earlier indication of current trends in prices in the housing market
Is this a better source? https://landregistry.data.gov.uk/app...-08-01&lang=en
I realise you are giving an honest opinion but I have to say, you aren't doing my stress levels any favours!
In 5 years time, when my fix ends, if mortgage interest rates go above 6.8% the rental yield will be less than the interest only mortgage. At that point, I either suck up the difference and ride it out (hoping for future capital growth) or I sell up.
Assuming I take rent from 9 in every 12 months (3 void months per year) for the next 5 years and assuming the house is worth 30% less in October 2027 than it was valued at in August 2022, then I can sell it and walk away with nothing owed. Obviously Tthat's not ideal and is a worse case scenario.
I would point out that the main reason to turn my property into a BTL was to raise funds quickly to buy my dream house that I hope to move into on Sunday.
I wouldn’t say flawed as it explained what it is …
Of course there is a lag and time will tell, but I just don’t see the crash predicted by noTAGlove.
Yes - Nationwide do what they do to try to be more "real time". A lot of the time that can be a fair barometer but it's full of method error where there has been a sudden change of sentiment. LR is factual data in arrears, hence the latest info covering July. And that will be based upon deals completing then which will be based on "old news". For context, the market outlook for BOE base rates went from being a peak of 3% on 16th June to 4.25% on 15th Sep to 6% on 27th Sep. Sales completing in July do not have the current outlook factored in, I suspect it will take until the October LR figures in 3 months time to start seeing the true emerging picture. The market will go through an inertia phase first too, transaction volumes will fall with a mismatch in pricing between buyers and sellers, so optically I wouldn't expect any data source to fully represent what a property would really achieve if it had to be sold at any point in time.
OK flawed then as being something that is a fair representation of what is really happening
I would predict the market to be patchy. Underlying trend undoubtedly down, but inevitably some properties will be more susceptible to falls than others. I don't see a crash either but 10-20% should be anticipated for most stock
No historical data can tell you what is happening right now and in the future ... I wouldn't reference that as a flaw.
Anyway, I was just trying to balance the view that we were in an Armageddon crash ...
I feel similar in regard to the price drop. Unsure why but my gut feeling is if prices do drop then there are people out there that will step in a save a few thousand and stop prices falling further .
I have cash available, enough to pay off my small mortgage but im holding off incase i need it for my BTL properties . Whilst it may not be 100% the best choice i feel it gives me a layer of protection if things go really tits up .
I think its fair to say none of us can predict what is going in what direction.
It has flattened for sure - not seen any reductions that are noticeable/notable as yet. Usually this time of year is not a great time to sell TBH.
When you look long into an abyss, the abyss looks long into you.........
We are close to exchange on a property in Dorset (on the Purbecks). I’m not saying the situation won’t change, but we have been looking for a detached 4/5 bed family home for the last year+. There really wasn’t much (and still isn’t) coming to market. Those that ticked a lot of boxes were snapped up. The houses that have been on the market for the last year and haven’t sold (they were clearly chancing it and overpriced) have been reduced, but decent ones are still getting sold fairly quickly.
I know we’re buying at top of market, but we plan to be there for 10 years. If we don’t buy now the alternative, for a number of reasons, is rental and living inland. I see a drop in house prices but will have to accept it.
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As you are buying it as a home and not an investment and it is where you want to be then definitely go for it. "Life is what happens to you while you are busy making other plans" as a wise man once said.
True that as it always slows down in the Autumn and the approach to Christmas anyway...The UK, even London is made up of a lot of micro/local markets...so fwiw I reckon the likely softening, drop or switch to a buyers market and that mebbe not the worst outcome, will be varied up and down the country.
Dare I say even a 20 to 30 per cent drop will only be temporary on a long enough time line...personally speaking with LTV's at about 30 to 45 percent...when last I bothered checking, secured tenancies and the majority on cheap fixes with at least a couple of years to go...to borrow a phrase from the crypto kids I'm for hodling...worse thing I could do is attempt to sell, it'd be like trying to catch a falling knife.
Last edited by Passenger; 11th October 2022 at 11:26.
No matter what you pay today it will almost be worth more in say 10 years from now by at least 50%.
My first house cost £2750 in 1970 and someone sold it a few years ago for £265K. That was through a time of rampant inflation, much higher interest rates plus bust and boom economies.
So go for it.
Maybe my view is skewed by living on the SW London/Surrey borders where the housing market reached a peak of insanity during Covid.
My views are formed around what is happening in my local market, and I understand there will be regional differences.
Although I've always taken pleasure in watching our house value rising, I realise that it matters not a jot to most of us if the market collapses unless we were planning to downsize - indeed it would help our kids get on the ladder and reduce the gap if upsizing.
Wouldn't a massive collapse also pull down rent, thereby easing the squeeze for all those who are unable to buy for whatever reason?
Perhaps simplistic, and no doubt there are ramifications that I'm not considering. Probably also controversial in this forum - I would have little sympathy for the majority of BTL speculators as I have a moral objection to the concept of making a profit from residential tenants.
I think it matters to rather a lot to people who see it as a partial method of funding their care requirement possibilities.
Death or care requirement of first in the marriage: Sell and downsize, use the funds for that care or future care of the survivor.
The requirement for care funds is only going to become greater in the future.
Pensions are not going to fulfill that requirement (in most cases)
The UK has an odd obsession with property at a global level.
Most people view their property as part of the retirement fund hence the explosion of the equity release industry.
No government that presides over a house price crash will have an easy re-election. So if prices do start to slide expect some meddling.
Last edited by Montello; 11th October 2022 at 19:54.
I suspect you meant: "property" ?
TY ..edited....
Fully accepted - hence my mention "unless downsizing". Indeed such is part of our own retirement/old age planning. We hope that should we end up in a care home, and any proceeds from our home are exhausted, then the state will pick up the tab - and also we hope that we'll be too far gone to know otherwise
As they say, you die from the neck upwards or from the neck downwards and it rings true. My MIL was 94 when she passed, sharp as a button, but two false hips, a false knee and huge mobility issues meant she could hardly walk at the end. I think if you could pick, most would prefer neck down.Fully accepted - hence my mention "unless downsizing". Indeed such is part of our own retirement/old age planning. We hope that should we end up in a care home, and any proceeds from our home are exhausted, then the state will pick up the tab - and also we hope that we'll be too far gone to know otherwise
I’d try and avoid state funded care … nicer to have some choice. My father in law recently passed, he had Parkinson’s. He was in care at a cost of £1700/week. He had to sell his house to fund it.Fully accepted - hence my mention "unless downsizing". Indeed such is part of our own retirement/old age planning. We hope that should we end up in a care home, and any proceeds from our home are exhausted, then the state will pick up the tab - and also we hope that we'll be too far gone to know otherwise
Agent I talked with yesterday said it’s gone completely dead as far as leads go, they are getting a bit twitchy about what the future holds..
Out of interest, what area is this? I’m sure they are worried, it’s been pretty easy to sell houses for the last 2 years if they could get hold of the stock.
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The absolute basic facts on houses is there is not and never will be enough.
As a farmer once said to me ........... they stopped making land an awful long while ago .
Actually it was Mark Twain who famously said "Buy land, they're not making it anymore.”
Dubai and China are both making land.
How?Dubai and China are both making land.
They seem to make everything else
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