House prices to crash

[Simster]

Just forcibly move yourself in to Ben's spare room. That'll wipe the SMUG grin off his face.

So does this:



Npower Football League One: Table

Team P W D L F A W D L F A GD PTS
1 Brighton 8 3 1 0 8 4 2 1 1 4 2 6 17
2 Peterborough 8 4 0 0 14 5 1 1 2 6 8 7 16
3 Bournemouth 8 3 1 0 13 4 1 1 2 6 5 10 14
4 Huddersfield 8 2 2 0 9 5 2 0 2 7 6 5 14
5 Colchester 8 1 3 0 6 4 2 2 0 5 3 4 14
6 Rochdale 8 1 2 1 5 5 2 2 0 8 4 4 13
7 Carlisle 8 2 2 0 6 1 1 2 1 3 4 4 13
8 Exeter 8 1 3 0 7 6 2 1 1 7 7 1 13
9 MK Dons 8 3 1 0 6 2 1 0 3 4 9 -1 13
10 Oldham 8 2 2 0 6 2 1 1 2 6 9 1 12
11 Charlton 8 2 2 0 5 3 1 1 2 5 6 1 12
12 Swindon 8 2 1 1 4 3 1 2 1 5 5 1 12
13 Bristol Rovers 8 2 1 1 4 6 1 2 1 6 6 -2 12
14 Sheff Wed 8 2 0 2 3 2 1 1 2 8 5 4 10
15 Notts County 8 3 0 1 8 5 0 1 3 4 9 -2 10
16 Hartlepool 8 1 1 2 6 11 1 2 1 2 1 -4 9
17 Plymouth 8 1 1 2 4 8 1 2 1 4 4 -4 9
18 Southampton 8 0 2 2 1 4 2 0 2 5 3 -1 8
19 Leyton Orient 8 2 0 2 6 5 0 1 3 4 8 -3 7
20 Yeovil 8 2 0 2 6 7 0 1 3 3 10 -8 7
21 Walsall 8 1 0 3 4 6 1 0 3 6 8 -4 6
22 Brentford 8 1 1 2 3 5 0 2 2 1 4 -5 6
23 Dag & Red 8 1 2 1 5 6 0 1 3 2 8 -7 6
24 Tranmere 8 1 1 2 3 6 0 2 2 4 8 -7 6

 

[Lokki 7]

I am trying to adapt/survive the present mortgage marketplace as you are right. This is the norm now and if anything getting a mortgage in the future will become harder.

I think the comment you made earlier about concentrating on the buy-to-let mortgage market was very sensible. People are going to have to accept that it is not a god given right to own your own home, and that banks do not have a moral obligation to lend to you. This is the new world order whether we like it or not so fighting it is pointless.

 

[Uncle Spielberg]

The facts are the FSA are proposing banning interest only mortgages. This means many people with a perfectly adequate plan to repay the mortgage from numerous ways as mentioned above will be prevented from doing so. Also the lender will be solely responsible for the mortgage being repaid to the extent that if someone had an investment and it did not meet its target the lender would be liable. How can this be right ?. Because of this lenders will not offer interest only mortgages and who can blame them. This will mean someone in their 50's who wants an interest only mortgage and has an investment strategy in place over many years will not be allowed to do this and would have to have a 10 year repayment mortgage forced on them and the mortgage would be 3-4 x the amount the same interest only mortgage would be.

 

[Uncle C]

House prices increased by 0.3% in August, shows the latest data from Land Registry.

The number of properties sold in England and Wales for over £1m increased by 81% between June 2009 and June 2010, from 331 to 599.

It doesn't take Einstein to see that the average is being boosted by the higher uptake of £1m + houses.
These sales are mainly to foreigners taking advantage of the weak pound and are distorting the averages to make them look more attractive than they are.

 

[Uncle C]

I think the comment you made earlier about concentrating on the buy-to-let mortgage market was very sensible. People are going to have to accept that it is not a god given right to own your own home, and that banks do not have a moral obligation to lend to you. This is the new world order whether we like it or not so fighting it is pointless.

So how is this going to work when banks are cutting back the loans to BTL landlords?

Lloyds Banking Group, which provided 60 per cent of all buy-to-let mortgages last year, is to cut maximum lending to landlords to a fifth of what the bank was willing to advance in 2009.


http://blogs.telegraph.co.uk/finance...let-mortgages/

 

[Uncle Spielberg]

I think the comment you made earlier about concentrating on the buy-to-let mortgage market was very sensible. People are going to have to accept that it is not a god given right to own your own home, and that banks do not have a moral obligation to lend to you. This is the new world order whether we like it or not so fighting it is pointless.

Lokki

I agree and as such I am going to concentrate far more on the BTL market from now as that is where the growth will be. Today , Paragon a major player until 2 years ago who withdrew from the market for 18 months have relaunched today for BTL mortgages.

As it is the wise money is going on this market and with so many people not able to get a mortgage the BTL market will mushroom with landlords building up huge property portfolio's.

The ironic thing especially with the FSA in mind is this market is not regulated.

 

[Badger]

So does this:



Npower Football League One: Table

Team P W D L F A W D L F A GD PTS
1 Brighton 8 3 1 0 8 4 2 1 1 4 2 6 17
2 Peterborough 8 4 0 0 14 5 1 1 2 6 8 7 16
3 Bournemouth 8 3 1 0 13 4 1 1 2 6 5 10 14
4 Huddersfield 8 2 2 0 9 5 2 0 2 7 6 5 14
5 Colchester 8 1 3 0 6 4 2 2 0 5 3 4 14
6 Rochdale 8 1 2 1 5 5 2 2 0 8 4 4 13
7 Carlisle 8 2 2 0 6 1 1 2 1 3 4 4 13
8 Exeter 8 1 3 0 7 6 2 1 1 7 7 1 13
9 MK Dons 8 3 1 0 6 2 1 0 3 4 9 -1 13
10 Oldham 8 2 2 0 6 2 1 1 2 6 9 1 12
11 Charlton 8 2 2 0 5 3 1 1 2 5 6 1 12
12 Swindon 8 2 1 1 4 3 1 2 1 5 5 1 12
13 Bristol Rovers 8 2 1 1 4 6 1 2 1 6 6 -2 12
14 Sheff Wed 8 2 0 2 3 2 1 1 2 8 5 4 10
15 Notts County 8 3 0 1 8 5 0 1 3 4 9 -2 10
16 Hartlepool 8 1 1 2 6 11 1 2 1 2 1 -4 9
17 Plymouth 8 1 1 2 4 8 1 2 1 4 4 -4 9
18 Southampton 8 0 2 2 1 4 2 0 2 5 3 -1 8
19 Leyton Orient 8 2 0 2 6 5 0 1 3 4 8 -3 7
20 Yeovil 8 2 0 2 6 7 0 1 3 3 10 -8 7
21 Walsall 8 1 0 3 4 6 1 0 3 6 8 -4 6
22 Brentford 8 1 1 2 3 5 0 2 2 1 4 -5 6
23 Dag & Red 8 1 2 1 5 6 0 1 3 2 8 -7 6
24 Tranmere 8 1 1 2 3 6 0 2 2 4 8 -7 6

We've been along this road Sim, he'll just harp on about how it was the 'bookies' that made Saints favourites and it's a marathon not a sprint etc. etc.

Still it is always good to make the most of it

 

[beorhthelm]

The simple fact is that the financial world is in shit because the banks gave mortgages to members of the public who were simply not credit worthy. The ONLY way to repair this damage is to tighten lending criteria for at least a few years, if not permanently. Get used to it.

no, that far too simplistic, as i think you well know. if it was just a matter of lending to sub-prime, that would have just been a problem for the lenders themselves, they'd have to suck it up. the problem was the selling off of the debt to others, while taking out insurance against default. no-one knew where the liabilities where, or who had to pay how much if it went tits up. Lending criteria of high street banks is almost irrelevant against the wider backdrop, as relativly few 125% mortgages or dodgy self certs loans where sold. if all the focus is on mortages and lending, it will just happen again: there needs to be regulation of the secondary markets.

To even that out Chuck, my house mortgage is just coming out of fixed term and I've been stung by a whopping 0.75% above the BOE rate = 1.25% . It's a discrace.

i think this highlights something all the doom merchants keep overlooking. with the current low interest rates, it really doesnt matter to most that they cant get a mortgage. only those that want to move, and i wonder if the banks take that into account on the ones they approve. ie, are the high rate of failed application biased towards re-mortgages? of course, it screws up the IFA industry that made a living shunting people around different loan products every 2-3 years to save a 0.2%.

 

[Lokki 7]

So how is this going to work when banks are cutting back the loans to BTL landlords?

Lloyds Banking Group, which provided 60 per cent of all buy-to-let mortgages last year, is to cut maximum lending to landlords to a fifth of what the bank was willing to advance in 2009.


http://blogs.telegraph.co.uk/finance...let-mortgages/

How it will work, is that other lenders will step in to the void left by Lloyds but charge higher rates. Landlords will then pass these costs onto tenants so rents will rise.

 

[Uncle Spielberg]

How it will work, is that other lenders will step in to the void left by Lloyds but charge higher rates. Landlords will then pass these costs onto tenants so rents will rise.

Correct.

 

[Lokki 7]

no, that far too simplistic, as i think you well know. if it was just a matter of lending to sub-prime, that would have just been a problem for the lenders themselves, they'd have to suck it up. the problem was the selling off of the debt to others, while taking out insurance against default. no-one knew where the liabilities where, or who had to pay how much if it went tits up. Lending criteria of high street banks is almost irrelevant against the wider backdrop, as relativly few 125% mortgages or dodgy self certs loans where sold. if all the focus is on mortages and lending, it will just happen again: there needs to be regulation of the secondary markets.

Yes and no. Of course I was being simplistic, but at the same time the re-packaging and re-selling of mortgages in the secondary marketplace can only happen if there is a ready supply of new mortgage lending. If lending dries up, so does the secondary market, hence the rush to lend to anything with a pulse. Again a simplistic summary but pretty much true nonetheless.

As for happening again, it definitely will. The next bubble to bust is the sovereign debt market and that will be far smellier. My tip, start hoarding Krugerrands and handguns, you have a few years yet.

 

[Uncle C]

Lokki

I agree and as such I am going to concentrate far more on the BTL market from now as that is where the growth will be. Today , Paragon a major player until 2 years ago who withdrew from the market for 18 months have relaunched today for BTL mortgages.

As it is the wise money is going on this market and with so many people not able to get a mortgage the BTL market will mushroom with landlords building up huge property portfolio's.

The ironic thing especially with the FSA in mind is this market is not regulated.

US.

Good luck in your endeavors, but allow me to play devils advocate.

1. BTL landlords are in many cases being saved from disaster by historically low interest rates. When these go up (not if) many BTL empires will collapse like a pack of cards.

2. The banking collapse was triggered by loans to private purchasers. There is still a massive tranche of commercial debt that has yet to be exposed. When this happens the sky will fall in on 'commercial' lending.

3. Many BTL landlords have built up huge empires based on rents just being able to pay mortgages, but with appreciating house prices being the icing on the cake that has lured many in. With property prices about to fall and rents unable to rise to compensate, they are on dodgy ground with the paper value of their properties unable to match the mortgages.

4. Banks are already massively reducing the amount of money they will feed into BTL. Perhaps they know something we don't.

 

[stewardxxx]

UncleSpielberg:

I have just placed my 2 bed flat in brighton on the market. should easily make enough to put a 10% deposit down on a new place and clear the wifes credit card debt with the rest. The wife won't have any debt left and all I have credit on is a car which is about 170 quid a month so not a lot. We both earn between 25 and 30k each - do you reckon we would struggle to get a mortgage?

Thanks

 

[Uncle Spielberg]

I could not say from that info so its best to PM me and I can take details and advise you.

 

[Uncle Spielberg]

US.

Good luck in your endeavors, but allow me to play devils advocate.

1. BTL landlords are in many cases being saved from disaster by historically low interest rates. When these go up (not if) many BTL empires will collapse like a pack of cards.

2. The banking collapse was triggered by loans to private purchasers. There is still a massive tranche of commercial debt that has yet to be exposed. When this happens the sky will fall in on 'commercial' lending.

3. Many BTL landlords have built up huge empires based on rents just being able to pay mortgages, but with appreciating house prices being the icing on the cake that has lured many in. With property prices about to fall and rents unable to rise to compensate, they are on dodgy ground with the paper value of their properties unable to match the mortgages.

4. Banks are already massively reducing the amount of money they will feed into BTL. Perhaps they know something we don't.

F*ck me and I thought I could be negative

 

[Uncle C]

House prices increased by 0.3% in August, shows the latest data from Land Registry.

This represents an annual price increase of 6.7% which takes the average property value in England and Wales to £167,423.

All regions in England and Wales experienced increases in their average property values over the last 12 months.

The region with the highest annual price change is London with an increase of 11.4%. The region with the smallest annual price rise is the North East with a movement of 1.6%.

The West Midlands experienced the greatest monthly rise with an increase of 1.2%. Yorkshire and The Humber experienced the most significant monthly price fall with a movement of -1.4%.

The most up-to-date figures available show that during June 2010, the number of completed house sales in England and Wales rose by nine per cent to 59,390 from 54,710 in June 2009.

The number of properties sold in England and Wales for over £1m increased by 81% between June 2009 and June 2010, from 331 to 599.

One last point on these figures.

The Land Registry figures lag the market by about 3 months as they log sale prices on completion, which were agreed some 3 months earlier.
Other indexes such as Rightmove are showing the current state of the market with house price falls for 3 of the last 3 months.

 

[redneb]

We've been along this road Sim, he'll just harp on about how it was the 'bookies' that made Saints favourites and it's a marathon not a sprint etc. etc.

Still it is always good to make the most of it

.... while it lasts.

 

[redneb]

UncleSpielberg:

I have just placed my 2 bed flat in brighton on the market. should easily make enough to put a 10% deposit down on a new place and clear the wifes credit card debt with the rest. The wife won't have any debt left and all I have credit on is a car which is about 170 quid a month so not a lot. We both earn between 25 and 30k each - do you reckon we would struggle to get a mortgage?

Thanks

Can't she pay off her own f***ing credit card.

 

[beorhthelm]

The Land Registry figures lag the market by about 3 months as they log sale prices on completion, which were agreed some 3 months earlier.
Other indexes such as Rightmove are showing the current state of the market with house price falls for 3 of the last 3 months.

rightmove and other similar data has to be taken with a bucket of salt, their prices reflect asking prices not actual real prices. there can be a considerable difference between the two, with fluctuations in that gap. asking prices could drop to reflect sellers realistic view of the market, while the actual prices sold for still increase. one area/market might get 7% less than the asking price, while another gets 15%.

altogether, i wouldn't trust rightmove or similar as a source.

 

[The Antikythera Mechanism]

US.

Good luck in your endeavors, but allow me to play devils advocate.

1. BTL landlords are in many cases being saved from disaster by historically low interest rates. When these go up (not if) many BTL empires will collapse like a pack of cards.

2. The banking collapse was triggered by loans to private purchasers. There is still a massive tranche of commercial debt that has yet to be exposed. When this happens the sky will fall in on 'commercial' lending.

3. Many BTL landlords have built up huge empires based on rents just being able to pay mortgages, but with appreciating house prices being the icing on the cake that has lured many in. With property prices about to fall and rents unable to rise to compensate, they are on dodgy ground with the paper value of their properties unable to match the mortgages.

4. Banks are already massively reducing the amount of money they will feed into BTL. Perhaps they know something we don't.

1. I know next to nothing about being a BTL Landlord, but surely an "Empire" would have been created over a considerable period of time, when mortgage rates were much higher, but properties were cheaper to buy. Therefore, the rents should have covered the repayments on those mortgages, so theoretically, the BTL Landlords could actually be banking money at the moment because of the low interest rates.

2. The banking collapse was caused by loans to private purchasers in the USA who should never have been lent money in the first place. Presumably your reference to commercial debt also relates to the USA, so are you saying that billions are owed by insolvent companies that are still trading? Seems unlikely.

3. See 1

4. The property market is hardly buoyant at the moment so it stands to reason that less money will need to be made available for BTL.

As I said I have not had or will not have any involvement in the BTL market, so have no axe to grind one way or the other. I do, however, have issues with those that seem to delight in talking down the economy at every given opportunity, it's one of the reasons I've given up buying newspapers.