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Well I'm assuming what you meant was if they have a large amount of equity (not highly leveraged) they will have no problem getting credit.
House prices..
- Thread starter fendi
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Well I'm assuming what you meant was if they have a large amount of equity (not highly leveraged) they will have no problem getting credit.
Tis rather a generalised comment. I would have imagined that the majority of BTL's will not be screwed and if indeed rental incomes do not cover their expenditures they will be one of the first to sell. If a reduction in price happens it will probably hurt those FTB's that stretched themselfs with their mortgage and have for whatever reason been forced to sell. Personally I can't see a drop of more than 5-10%.
So do you really think prices will fall by 10% in the next 4 weeks?
Statistics released recently show that arrears cases are lowest amongst BTL than any other mortgage payers.
Which if you use a bit of common sense seems completely logical. Most BTL's will have a bit more business acumen than the general public and hence have more set aside for emergencies etc
Well yes that's exactly what I meant by a "decent portfolio", if you have a 1000 houses with 0 equity that aren't able to furnish there debt I would consider that a "bad portfolio"
Associate
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I think you've quoted then wrong post? If you're referring to my earlier post, I still stand by the comment that he's lucky to have sold it for £110,000 because he'd probably struggle to get £100,000 in a months time.
That's not to say the price will have "dropped £10,000" but there are monumental shifts going on at the moment in the financial markets and the worst is yet to come. Now that prices are falling, lending criteria for mortgages have been tightened immensely and confidence in the housing market has plummeted, flat sales have pretty much ground to a halt. He's incredibly lucky to have sold just before all of this became mainstream.
Associate
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Fallen by 6.8% in the last month! That's £28,000 from the cost of an average house in London apparantly.
Source:
http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article3059977.ece
If you read though, thats only in very very very expensive areas and doesn't appear to be wide spread.
You also have to remember it's December. People don't want to move at Christmas/new year. We will have to wait and see what happens in Feb. I
That amount of fall is not widespread, but the market as a whole is falling.
The main issue with the economy and especially something like the housing market which is in the hands of Joe Public is that facts mean very little.
Its all about perception and confidence. The media will ultimately determine how bad things will get.
On the house selling front the couple I have sold my house to have pulled out after the survey came in.
The house was for sale for £110k the survey came in at £110k. This couple were looking for the survey to come in at £120k. Apparently its the third time they have done this. Do they not understand the process of buying a house? They are looking to buy a house (which has recently been redecorated to a high standard throughout) and expect to make an instant £10k equity.
The main issue with the economy and especially something like the housing market which is in the hands of Joe Public is that facts mean very little.
Its all about perception and confidence. The media will ultimately determine how bad things will get.
On the house selling front the couple I have sold my house to have pulled out after the survey came in.
The house was for sale for £110k the survey came in at £110k. This couple were looking for the survey to come in at £120k. Apparently its the third time they have done this. Do they not understand the process of buying a house? They are looking to buy a house (which has recently been redecorated to a high standard throughout) and expect to make an instant £10k equity.
You've taken one extreme and unique sector of the market to prove that 'house prices have fallen 6.8%. You'd come across as far more credible if you'd pasted a link to that article and said "Rightmove see a 3.2% drop countrywide". We'll see what happens in the long run. Thankfully my missus bought a house in the mid 90s.
Soldato
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This has just happened to my neighbours aqnd two other houses up our road. There is no shortage of buyers, but the funds they require are now harder to come by. My neighbours buyers were told by their FA that they would need a deposit of at least 20-25% to be able to get a decent mortgage.
The lack of available money to borrow is defiantly reducing. The other problem with our houses are they are fairly small and traditionally popular with FTB. However a first time buying couple would need to earn more than the national average each to be able to afford one with out a huge deposit. The buy to let brigade are also un-interested in the houses as the rents are poor in comparison to the buyer cost.
I think we are on the brink of a correction due to affordability issues.
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I think you are being overly optimistic.
The fact it is December, a traditionally quiet month, does not equate to a £28,000 average loss! Prices ought to be stable, all that should happen is fewer enquiries and viewings.
Prices are falling because of the current financial conditions, the fact it's Christmas has nothing to do with it. I suspect the fall in property values will accelerate into the New Year.
it's not an average 28k loss. It''s no where near that. that is the level for affluent london areas. It's 3.2% for he entire UK. Which is more like 6k on a 200k property.
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This is the real crux of the matter isn't it? You're looking at a deposit of £25,000 per £100,000 of the property cost. An average £250,000 home will therefore require a deposit in the order of £75,000! That's not including stamp duty!
I think you are at least partially right. People generally, and FTBs especially, are simply not going to be able to raise that kind of money. This will have a truly massive effect on property sales.
I just love the fact that everyone is in the damn housing market to make money, let alone the poor people who just want to have a place to live.
My parents have been prancing around proud of house prices etc for years, and I just thought it was a hobby (like an interest in architecture or so) but now I see what it is, a cynical status symbol and investment that allows people to "jump status" in life.
It reminds me of a prediction a few years ago : in the future, there would be unlimited cheap food, cheap housing etc and the basic standards of living would be so amazing... well these things are unfortunately driven by market forces, not technology, so whilst healthcare might be able to cure more diseases, basic things will not happen because the people at the top of society *want* people to stay on the streets / in landlord based cycles of debt. Its how they have power.
Seriously, the prices in Brighton are retarded. No-one on minimum wage could live in brighton and afford a house, the prices are practically london prices. And for what??? The roads aren't better than elsewhere (infrastructure), the culture is better but that isn't something that any housing association has produced, just capitalised on... the big jobs are on the outskirts or in london, so people are living in brighton and commuting to london (thought I accept that there is a lot of money in brighton)...
All in all, its a big No Swearing! take, and basically capitalism at its worst. It has made greedy entrepeneurs out of every single person, and estate agents absolutely LOVE it.
My parents have been prancing around proud of house prices etc for years, and I just thought it was a hobby (like an interest in architecture or so) but now I see what it is, a cynical status symbol and investment that allows people to "jump status" in life.
It reminds me of a prediction a few years ago : in the future, there would be unlimited cheap food, cheap housing etc and the basic standards of living would be so amazing... well these things are unfortunately driven by market forces, not technology, so whilst healthcare might be able to cure more diseases, basic things will not happen because the people at the top of society *want* people to stay on the streets / in landlord based cycles of debt. Its how they have power.
Seriously, the prices in Brighton are retarded. No-one on minimum wage could live in brighton and afford a house, the prices are practically london prices. And for what??? The roads aren't better than elsewhere (infrastructure), the culture is better but that isn't something that any housing association has produced, just capitalised on... the big jobs are on the outskirts or in london, so people are living in brighton and commuting to london (thought I accept that there is a lot of money in brighton)...
All in all, its a big No Swearing! take, and basically capitalism at its worst. It has made greedy entrepeneurs out of every single person, and estate agents absolutely LOVE it.
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It's 6% for London which is what I was talking about. Sorry if I didn't make that clear.
Property in London and the Home Counties is arguably the most expensive and over-valued in the country. Therefore it makes sense that any correction will hit hardest here and then filter outwards gradually to the rest of the UK.
For example, where my parents live in Northumberland I can buy a brand new three bedroom detached home with a garage for less than £170,000 - incredibly good value compared to London, but there's plenty of scope for prices there to fall as well. The fall just won't be as much because the property isn't so over-valued.
Again that is only in affluent Kensington and Chelsea. Unless you have another article.
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I read the same article in The Times that you did. My point still stands though
well no it doesn't.
As we haven't seen a 6% fall in london. We've seen a 6% fall in the most exclusive parts of London.. Hardly the same thing. what average person buys a 1.5million house? it's a totally different market and as such can be skewed by other factors.