Haha. Stuck at well over 3 times target, and wage inflation is running even hotter.
https://www.bbc.co.uk/news/live/business-67137477
More IR rises on the way.
The 64, 000 dollar question, grrr inflation eh...exactly, how do we pay for it, I'm reading that Local Authorities are broke and central command have let the national debt balloon to match the size of the economy, a terrible time to try and borrow even more money...I'd say the promises are likely to hit the brick wall of reality.
Last edited by Passenger; 18th October 2023 at 10:14.
Wow they've done great you must be chuffed, good to hear...just out of curiosity was it sweat equity, the market moving , or a bit of both that's added the notional 80 some K in 3 years ?
Hadn´t really appreciated that Notts was so desired, to command 400 large for house, all seemed a bit bleak when I was at Uni there, I don´t mean just the student accommodation...mind you it was a valuable life lesson, the handing over good money to grinning landlords for the pleasure of living in sub optimal housing.
Last edited by Passenger; 18th October 2023 at 14:16.
Nothing to do with me, I’m just pointing out that it’s not necessarily all doom and gloom for first time buyers who bought during covid. To be fair though, they were buying just ore covid and covid delayed the purchases slightly.
WRT house rises in Nottingham, there will always be good and bad areas/properties and I’m sure there are £1m+ houses in and around the city. Student property is usually at the cheaper, more rundown end of the property spectrum, as my daughter knows from experience.
More commentary from Lloyds.
https://www.bbc.co.uk/news/business-67214201
As the UKs largest provider of debt to the housing market, and where they make their own returns from, they are hardly the voice of impartiality.
They are hardly going to say it’s all going t1ts up, run for the hills, we don’t care about our mortgage book.
I have long since ignored commentary from the vested interests, whether housing or other areas where money can be made from their actions, or should I say words
Last edited by noTAGlove; 25th October 2023 at 17:54.
Feel free to post any links from sources you consider impartial or insightful.
Personally I think you’re getting into tinfoil hat territory with your conspiracy theories… they are a major player in the market so of course have a view, no doubt tinted by their own position but read with that in mind …
Funny how all the published press releases on the future of the housing market come from Nationwide, Lloyds, Zoopla, Rightmove, Savills etc. etc., and all predict a very shallow decline and then price rises soon after.
It is crystal ball stuff anyway and I have no idea why they press release this crap. Oh yes I do, all of their business are dependant on an upbeat housing market, so just pump good feeling upbeat statements to the masses.
I don’t have to, and haven’t even read the press releases. You just know exactly what they are going to say.
The longterm predictions are based on their knowledge of the industry. Such as there's a housing shortage in the UK, which isn't going to be solved any time soon. Supply and demand dictates that prices will rise until we have an over supply of housing stock. Any dip is relatively short term based on lack of confidence in the market. Confidence is low at the moment, but it won't last forever.
I make up my own mind on the matter. My rational has been explained numerous times, but I’ll go again.
House prices generally correlates with affordability.
Repayment example (average punter and FTB)
A £100k repayment mortgage @ 1.5% IR (2010-2022) = £400 pcm
A £100k repayment mortgage @ 6% IR (2022-?) = £644 pcm
Cost of servicing mortgage debt for your average punter and new FTB has increased by 61%
Interest only example (investor)
A £100k repayment mortgage @ 1.5% IR (2010-2022) = £125 pcm
A £100k repayment mortgage @ 6% IR (2022-?) = £500 pcm
Cost of servicing mortgage debt has increase by 300%
This is my reason I expect 30% house price falls. It took 6 years to play out in the last falling house price cycle (1989-1995), and house prices drops rapidly accelerated after year 3, i.e. in 1992.
We are currently one year in to a house price falling cycle. Very early days.
Plus the economy is finally slowing down and unemployment is increasing.
Almost everything eventually returns to the mean. History does not repeat itself, but it rhymes.
I think house prices have been unaffordable for decades yet prices have continued to rise so I don't see the correlation you speak of.
Property has been moving out of reach for first time buyers for years ... and now it's really getting out of hand with rates returning to historical averages.
We need a major building plan in the UK and a significant amount of local authority building to address the supply side of the market; until we get there I don't see a major drop as the shortage continues ...
House prices have been exceptionally expensive, but rock bottom interest rates have kept them just about (on average) affordable.
House prices are still exceptionally expensive, but rocketing interest rates have now made them completely unaffordable.
There is a big difference regarding what has happened over the last 12 months.
Changing attitudes too, both lenders and buyers, increased salary multiples, softening of lending criteris, buyers shouldering more debt and accepting a larger proportion of income spent on mortgage...back in the day it was broadly the conservative financial view you don't wanna spend more than 25/ 30 per cent of net on your housing costs but at a certain point it went out the window partly cos everyone saw the potential for roi/ wealth out of their home. Also housing/ renting costs were removed from the basket of variables they formerly used to track inflation...hmm, under Blair/ Brown iirc, though I could be wrong.
Rates'll come down again a bit, eventually.
Last edited by Passenger; 27th October 2023 at 09:27.
The 1989 to ‘95 decline didn’t include vast amounts of BTL and 2nd home investors in the mix. A massive difference to this time round.
Some investors are selling but only a pretty small percentage of the total.
I don’t know about that. If I go to Zoopla in my area there are dozens of unfurnished vacant flats stacked up which all smell of BtL offload. None of them are selling, and they are chasing the market down.
House prices are as unaffordable now as they were in 1992 even at half the interest rates. Difference is there was a massive recession in 1992.
When in work, people will just skimp and save to get by with housing costs. It is when unemployment sets in all hope is lost.
Labour market is currently good but anecdotally softening by the day. If somehow they can control inflation without significant unemployment, then it will be a softer landing for the housing market.
But, if we go into a proper recession then all bets are off IMO.
We haven’t had a proper extended multi-year recession for 30 years so anyone less than 45 has no idea what they are like, or even if they exist.
I suspect your area is perhaps more volatile and investment driven than other areas of the UK; which maybe makes you think that what you see locally is reflective of the situation UK wide.
I think any new BTLs are dead ... no one is buying.
Many (most) BTL investors have little or no borrowings so are not distressed sellers.
Yes a few Insta/YT BTL gurus with massive borrowings maybe in trouble and that is a situation of their own making, they likely took on too much risk and are now finding out that being leveraged works both ways ...
I'm sure we will continue to see flat and declining markets until we see some lowering of rates and improvement in stability both nationally and globally.
All my investments are doing poorly at the moment ... it is not just property going sideways ... at least I still get the same rents each month ...
BTL is just 17% of UK stock ...
Local authority used to be 31% ... it is now 0% ... in that period of change private BTL ticked up from 11% to 17% ... that happened over a 40 year period.
I wouldn't say BTL is a particularly significant sector of the UK housing market...
The UK housing market is driven by a shortage of supply, the stopping of local authority building being a big factor plus a range of daft tax incentives that have revved up the market.
I know the media is whipping up an anti-landlord storm to blame for the condition of the UK market but it's really a distraction strategy ... it is the lack of building that is the problem.
Sophie Siangolis, buy-to-let borrower
Siangolis, who owns 16 rental flats with her husband in her home town of Weston-super-Mare, Bristol and Highbridge in Somerset, says relentless interest rate increases this year will almost certainly force them to sell their properties.
“The rents are no longer covering our mortgages; we’ve had a shortfall every month of between £2,500 and £3,500 for the past six months. We’re on SVR and the payments have doubled. I tried a couple of days ago to talk with some lenders about switching to a fixed rate, but they wanted to charge a fee of £3,000 for each property to go on a fixed deal, so it’s not worth it.
“We’re now in arrears of around £900 with service charges that we can’t pay. We’re panicking because we’ve got no money left, and can maximally carry on for another three months.”
https://www.theguardian.com/money/20...-rates-arrears
Well that's what happens when you take on too much leverage on a single asset class ...
The typical UK landlord is often accidental with 2-3 units. These landlords exampled above are not typical and will be bust in due course; not sure what happens to the tenants when the properties get repossessed; I guess they get evicted by the mortgage company and the property sold, no winners there ...
The vast majority of rented accommodation in my area is private rental sector and any available social housing is as rare as hens teeth
Well social housing is also about 17-18% of the market and they fill the gap by the sector once filled by local authority; so anyone disadvantaged should have access to social housing.
I know plenty of under 35s that have purchased their own homes so I think that view is not correct.
Clearly affordability is a major issue and if the BTL sector shrinks due to political change how is that going to work out for those people you reference? Answer is more expensive rents as the sector shrinks.
It all points back to increased house building being the key priority.
That and a reversal to the rule saying that people running a BTL as a private business can’t offset their costs against profits.
That would reset the problem with the rental sector, reduce rents and increase supply for those who want to rent or have cheaper rents so they can save more to put towards a house.
The biggest single issue that’s screwed the UK housing/rental markets over the last few years, is the rule change to no longer being allowed to offset mortgage costs against rental profits.
The deletion of section 24 was an odd policy as every other business can offset the costs of borrowing against tax.
Many people have transferred ownership into a limited company to avoid this but that’s not simple for landlords who have owned properties for a long time in their own names due to CGT liabilities and stamp duty. It really was an odd policy decision.
The facts are that HMG are the villains as they effectively privatised social housing from the 90s onwards. The smart investors piled in and made out like billy-o for 25 years.
The villains, HMG, thought after 25 years that this is ripping social fabric apart, so we are going to screw the landlords over. The smart money got out and now the bagholders are quite rightly whinging.
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Likewise. No borrowings so section 24 deletion was irrelevant to me and many other landlords.
It didn’t have the, I assume, intended effect of cooling the market it has just ended up hurting tenants.
If HMG wants to fix the market they need to incentivise building and investing in property, deleting tax allowances does the opposite.
Last edited by Montello; 28th October 2023 at 12:37.