Jump to content

UK Property - The former HPC addicts' thread


Recommended Posts

http://www.spiked-online.com/index.php?/site/article/1647/

an interesting, well researched and wide ranging article imho

 

12 September 2006 James Heartfield

Britain's phantom housing boom

The author of Let’s Build! explains why a booming housing market has not led to the building of new homes – even though we could do with another five million of them

 

author sees alot of the blame in

......Section 106 of the Town and Country Planning Act allows local authorities to trade off planning permission against agreements on the part of the developers to make improvements to the site that might normally have been their responsibility. These can include road improvements, the provision of parks, capital improvements to local schools, and hospital or recreational facilities. Section-106 agreements turn planning permission into a tradeable commodity, with which local authorities can wring resources, ‘planning gain’, from developers over and above their commitments to local and national tax........

 

finishes with

.............Housing investments cushion a lot of people against insecurity, but the booming housing market – perversely – is not leading to the building of new houses. To achieve that we need to take the restraints off development, but also use government incentives to create new homes.

Link to comment
Share on other sites

  • Replies 496
  • Created
  • Last Reply
when will it go into reverse?

 

http://news.bbc.co.uk/1/hi/business/5334044.stm

I'm sure most here know the much-quoted story of Joe Kennedy and the shoe-shine boy.

 

Just before the Stock Market crash of 1929 JK was having his shoes buffed and his shoe shine boy started giving him Stock Tips. He went home and liquidated all his stocks then and there.

 

Whether it's a true story or not I don't know, but I had a bit of a Joe Kennedy moment on the train coming back to Wales from London last week.

 

As the train pulled into Cardiff, three Welsh priests (catholic) got on and sat in the three seats at my table.

 

They'd been on some kind of Priest conference and were chatting about Priest business, which was fascinating to me, because if you had taken away their dog collars and Priest garb, they could of been any manner of Middle Manager in any Multi-National business.

 

Anyway, as the train went further west, they started talking about houses, house prices etc.

 

Casually the one revealed that he'd just bought his first Buy to Let and was thinking about buying another.

 

My ears pricked up, I couldn't believe what I was hearing.

 

There was a lot of tooing and froing regarding rental yields, capital growth etc.

 

The One Priest (not the BTL'er) had considered it but felt that the yields weren't high enough and had bought a Holiday home in Corsica instead (no i'm not making this up). This was the same Priest that was talking about how terrible homelessness was and the poverty of his community.

 

The third Priest was having a house built in Bulgaria and was saying how cheap it was etc.

 

Firstly, in my 'momentary niavete' I'd figured that Priests would be either

 

A) Not allowed to do this and

:rolleyes: That they would surely have a moral viewpoint which slanted them away from such matters.

 

Of course, I know that they are human too and that the clergy are the biggest landowner around etc, but I couldn't help feeling something like:

 

'Jesus Christ (lol) if everyday bloody Priests are BTL landlords now, that's got to be the top'. (God help them and us as well).

 

So the answer is something like, 'When the Last Priest turns'...

Link to comment
Share on other sites

the buy-to-letters may be glad to know they will have someone to pray for the market

Link to comment
Share on other sites

I think a lot more people will be praying by the time this is over.

 

A record number of Brits put their homes at risk last year by missing mortgage repayments, a leading consumer advice charity has warned.

 

According to Citizens Advice, an estimated 770,000 homeowners have missed one or more mortgage repayments over the past 12 months.

 

Young people were shown to be most likely to default on their home loan payments, with 13% of 21- to 24-year-olds with a mortgage missing at least one payment.

 

 

http://money.uk.msn.com/mortgages/Insight/...cumentid=912760

Link to comment
Share on other sites

I think a lot more people will be praying by the time this is over.

 

Indeed. House prices are already into 'OIRO' territory here in many parts of Wales and I haven't seen that for years (not since the last fun and games we had from 1990 to 1994 and beyond).

 

I started noticing that a lot of houses in Cardiff (just curious) are now advertised as reductions or 'OIRO' etc.

 

Here in SW Wales property is currently stagnating and becoming a falling market again.

 

In my village alone there are at least fifteen properties that have been on the market since the beginning of this year, or before. So much so, that a lot of them have had their signs taken down (but are still listed online and in estate agents windows).

 

Not even the over-paying English who buy holiday homes and retirement homes here can keep the market inflated to the levels it was even six months ago.

 

Average house is still running at 'quoted' 6x times average local salary though (more like 10x average local salary).

 

On another note. A BTL landlord I know was trying to offload 'any' one of his flats that he'd bought, he's also selling his motorbike (1000cc) and various other 'items' including a couple of Rolex watches.

 

Don't know whether the sellers who don't need to sell (but really want to) will take their property off the market for a year or so and then try again.

 

I certainly know that a few folk I know are fast approaching the 'need to sell' level. In fact someone tried to sell me a house in the pub the other day (I knew there was a reason I didn't drink much).

Link to comment
Share on other sites

Properties around me are moving quite quickly at the moment (but only at 2004 prices - the recent "boom" has not affected Leamington). I am praying for a last gasp rally in prices running up to next spring, so I can get a good STR price just before Gordon's miracle economy finally implodes :D

Link to comment
Share on other sites

Properties around me are moving quite quickly at the moment (but only at 2004 prices - the recent "boom" has not affected Leamington). I am praying for a last gasp rally in prices running up to next spring, so I can get a good STR price just before Gordon's miracle economy finally implodes :D

 

Next spring? That could be interesting as IR's might be 0.50% higher by then and that may well be enough to topple the market. On the other hand, the guys over at FinancialSense believe that the Fed will be in IR reducing mode by then so the UK might just follow. So, how about summer 2007 to spring 2008 instead? Prices stagnate or fall between now and next spring, BoE panic and follow the Fed in reducing rates, giving another 6-12 month mini boom to house prices. Then by mid 2008 with official stats showing the average UK house price at £225,000 the UK economy, racked with its debt laden, spent out consumers goes into a slow Japanese style economic death over the next 10 years. It's a decision that I wouldn't like to have to make, to wait or not, so good luck whatever you decide.

Link to comment
Share on other sites

Next spring? That could be interesting as IR's might be 0.50% higher by then and that may well be enough to topple the market. On the other hand, the guys over at FinancialSense believe that the Fed will be in IR reducing mode by then so the UK might just follow. So, how about summer 2007 to spring 2008 instead? Prices stagnate or fall between now and next spring, BoE panic and follow the Fed in reducing rates, giving another 6-12 month mini boom to house prices. Then by mid 2008 with official stats showing the average UK house price at £225,000 the UK economy, racked with its debt laden, spent out consumers goes into a slow Japanese style economic death over the next 10 years. It's a decision that I wouldn't like to have to make, to wait or not, so good luck whatever you decide.

 

I'm not easily scared and I don't go in for Dooming (not that the above is).

 

I come out in chills when I hear 'Japanese style deflationary' etc because:

 

A) I can see it as being a distinct possibility and

 

B ) The UK would be less capable of coping than Japan

 

I don't feel that i'm being dismissive of the people in these islands when I say that, just that ours economy is less prepared and robust than Japan's IMO.

 

I can already see Wales staring into the abyss as our GDP is continuing to lessen and our economy is about 20 percent manufacturing based and we are hemoraging (sp?) manufacturing jobs to Asia, Eastern Europe etc and replacing them with make work schemes and public funded public sector jobs.

 

As for selling a house, depending upon where you are (as i'm aware that some markets are still 'robust' and rising), i'd sell it now.

 

Regardless of the seemingly insatiable desire to buy houses here in these islands, I can't see the market being so enamoured with overpaying for bricks and mortar once unemployment rises by another 1 percent and interest rates rise by another point over the next six months or so.

 

Bearing in mind that this guesswork and 'feel it in my water' territory from my POV.

Link to comment
Share on other sites

As for selling a house, depending upon where you are (as i'm aware that some markets are still 'robust' and rising), i'd sell it now.

 

See my new STR diary thread to follow my thoughts on this!

 

http://www.greenenergyinvestors.com/index.php?showtopic=951

 

Leamington area has underperformed many surrounding areas since 2004, so I'm hoping it will catch up a little, regardless of a generally deteriorating national picture. (Only hopeful of this, not confident!)

Link to comment
Share on other sites

The UK would be less capable of coping than Japan

 

japan is in the midst of a demographic nightmare, the uk is headed towards one

Link to comment
Share on other sites

yogi

 

just down the road between Banbury and Leamington......period property is not shifting at all and prices are being reduced.

 

Landlord offered me the house for £40k less than it was on the market for last year (when I originally viewed it). Price £400k It was also up for rent at 1400 a month. I said no to both...few weeks later rent reduced to £1000 so decided to rent it. Year later the landlord has asked if I was interested at £360k. I said no and have just extended for another year...no rent increase

Link to comment
Share on other sites

japan is in the midst of a demographic nightmare, the uk is headed towards one

 

Tis true.

 

I was about to say that Japan has a healthier economy/ manufacturing base than the UK, but then I talked myself out of it, because Demographics are in part, the economy.

Link to comment
Share on other sites

yogi

 

just down the road between Banbury and Leamington......period property is not shifting at all and prices are being reduced.

 

Landlord offered me the house for £40k less than it was on the market for last year (when I originally viewed it). Price £400k It was also up for rent at 1400 a month. I said no to both...few weeks later rent reduced to £1000 so decided to rent it. Year later the landlord has asked if I was interested at £360k. I said no and have just extended for another year...no rent increase

 

An excellent example of what may be happening in many areas for both renting and house prices. Estate agents will keep their advertised rents and sale prices high for as long as possible. The reality on the ground may be very different.

 

That looks like a great deal you got on the rent.

 

Next year, he may offer at £320k and then £275k the year after. When will you be interested?

Link to comment
Share on other sites

£1000 rental per month?

 

that's a pathetic 3.2% gross return on a £375k price

 

at 5%, the price would need to be £240k,

and it may be headed there

Link to comment
Share on other sites

And today the Government have announced some shared housing initiatives for the armed forces. Does anyone know what it is? The only thing that I can think of is that they are about to invade Iran.

 

-------------------------------

 

Housing minister, Yvette Cooper, said the report was a severe warning to those who had opposed some of the government's plans for new homes.

 

Proposals for thousands of new homes in the south-east have drawn criticism from conservationists and opposition MPs who have accused Labour of trying to concrete over the countryside.

 

Ms Cooper said: "We have over a million more home owners and low interest rates thanks to economic stability. But we want to do more to help first-time buyers, such as helping Armed Forces personnel get into shared ownership, as we announced today.

 

"If we don't increase housing numbers as the government has set out, then only a third of 30-year-old couples will be able to afford a place of their own in 20 years' time compared with around half today."

 

http://money.guardian.co.uk/news_/story/0,,1877765,00.html

 

And if the last bit is true, just who is going to be buying all those "pension" properties that will be coming on to the market in 20-30 years time?

Link to comment
Share on other sites

just down the road between Banbury and Leamington......period property is not shifting at all and prices are being reduced.

 

Hi burbelly, can I ask whereabouts you are, purely out of interest? We had a nice bike ride round Bishop's Itchington / Knightcote area on Sunday afternoon.

 

I am wondering if chains are starting to fail from the top down. FTBs / BTLs one way or another are still willing and able to get and spend the money on properties at the cheaper end of the market. The "must buy or I'll miss the boat" fear is as strong as ever for FTBs, I would say. I think the bank of mum & dad is contributing alot to these purchases. But further up the market, where yields can be even poorer and BTLs are less active, people simply can't afford to move up the "ladder", or even just move areas due to the stamp duty costs.

Link to comment
Share on other sites

I am wondering if chains are starting to fail from the top down. FTBs / BTLs one way or another are still willing and able to get and spend the money on properties at the cheaper end of the market. The "must buy or I'll miss the boat" fear is as strong as ever for FTBs, I would say.

 

Yes, and this "must buy or I'll miss the boat" fear card is one the VI's have been playing every year for oh, just about every year this decade. It's a lie that's worked quite well so far, and it can't go on forever, especially once the bank of Mam and Dad starts defaulting when they realise that they probably can't help fund all their kids this way (assuming they've got 2-3). Can you imagine the family arguments?

Link to comment
Share on other sites

Can you imagine the family arguments?

 

Ohhhhh yes :lol: Like when little Johnny phones daddy up to tell him:

 

1) I've just lost my job

2) I'm facing reposession with negative equity

3) Yes I really am sorry I've lost your £30k deposit, but can I pleeeeease come back home and sponge off you now I'm homeless?

 

:blink:

 

I borrowed money off my parents for my deposit and mewed to pay them back last year, so in a way I can't criticise. However, I had guaranteed chunky pay rises over that time and the LTV's never been over 80%, so lets say it was a calculated risk that paid off :angry: !!

Link to comment
Share on other sites

speculative manias claim victims,

and since whole families got caught up in this one, they will get dragged down together.

 

who is to blame? the unblinking and thinking have only themselves to blame

Link to comment
Share on other sites

  • 3 weeks later...

Bubble logic?

 

The Bank of England's decision to raise interest rates to 4.75 per cent in August is not helping homebuyers by easing prices on the UK's booming property market, according to Yorkshire Bank.

 

Publishing its latest housebuyer's report today, the northern bank reveals that only nine per cent of housebuyers would consider delaying a purchase because of higher borrowing rates.

 

This decision, which goes against the logic that higher interest rates dampens the property market, reflects the higher-than-normal prices currently being experienced because of restricted supply, according to Yorkshire Bank's head of retail, Gary Lumby.

 

"Normally you would expect that with higher interest rates, buyers' budgets would be tighter. This in turn might result in more buyers thinking to offer under the asking price," Mr Lumby suggested.

 

http://news.viewlondon.co.uk/Rate_hike_not...s_17754361.html

Link to comment
Share on other sites

Lenders are relaxing their criteria to stop people being priced out of the market — raising concerns that it could all end in tears. By David Budworth

Homebuyers and property investors are being driven to desperate measures to get into the market, as some analysts predict a return to double-digit growth next year.

 

Michael Taylor of Lombard Street Research, an economic consultancy, said last week he thinks prices will jump 15 per cent in 2007, double the rate of growth expected by the end of this year.

 

He said: “We think interest rates will rise to 5 per cent in November, but don’t believe that will take much momentum out of the housing market. Even if there is another rate rise early next year prices should remain buoyant.”

 

Lenders have been quietly relaxing their criteria to make sure borrowers can still afford to trade up the housing ladder as prices move further out of reach. This has raised fears that some buyers will overstretch themselves and struggle with their repayments if the Bank of England is forced to hike interest rates further than expected to halt the mini-boom.

 

Alliance & Leicester (A&L) recently changed its rules so borrowers, except first-time buyers, do not need to provide proof of their income if they can put down a 25 per cent deposit, giving them leeway to inflate their earnings to secure their dream home.

 

Such “no proof” mortgages caused a storm during the last housing boom, when it emerged some brokers were encouraging clients to lie about their earnings so they could bag a bigger property. The scandal prompted an investigation by the Financial Services Authority (FSA), the City watchdog, although A&L insists all the necessary safeguards are in place.

 

Lenders are also relaxing the rules for buy-to-let borrowers, who can now take out a mortgage even if their rent barely covers their interest repayments. Landlords could be quickly plunged into losses if interest rates rise, as expected.

 

http://business.timesonline.co.uk/article/...2403982,00.html

Link to comment
Share on other sites

Property going up 15 percent in 2007 huh?

 

Where, in Fochrhiw, Bedwas, Glyncorrwg? Quick i'd better get on the ladder.

 

How about Walworth SE17, barring a few shootings?

 

Houses are already falling here in many parts of Wales, a lot of the rest is stagnant, areas that I am watching that are still going up are Penylan in Cardiff (think Wandsworth-on-Taff) but we probably don't count.

Link to comment
Share on other sites

  • 2 weeks later...

(from GHPC):

Local estate agent Andrew Grant confides to friend.., Malvern in bad way:

 

"Offer 15% under asking price and prices already down...nothing's moving" "Don't tell anyone OK..?"

Verbatim!

 

Malvern is in Worcestershire and is an over-priced retirement home with some public schools.

One estate agents in town has already shut and has a sign saying 'Gone fishing' in window! How drole!

 

= =

 

(my response?):

it's not only Malvern...

the key part of his statement is: "Don't tell anyone OK..?"

 

THE TRUTH can hurt EA business, eh?

 

@: http://forum.globalhousepricecrash.com/ind...showtopic=10811

 

= = =

 

NOTHING earth-shattering about any of this.

Clearly, the market is not as strong in the uk as a whole,

as the stat-spinners would have us believe

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.


×
×
  • Create New...