Property crash, just maybe it really is different this time

[Bear Hug]

22 minutes ago, JoeDavola said:

Well to be fair my folks aren't that wealthy - but we do have a relative like that. Her husband worked himself into an early grave (at her encouragement for more more more status/money), and for over a decade now she's been travelling the world on their civil service pensions and bragging about it on Facebook. Posing with boomer mates the world round, the holiday homes with private pools, the fancy restraunts etc. She's the sort of person would have loved social media when she was younger and now she's all over it in her 80's bragging.

Probably good for the global economy I imagine there's quite a few industries held up by this kind of boomer.

My mum did work hard, it's just the job didn't really pay that much. It's just hard for me to accept the bragging when it was mainly luck. But I guess it often is. Even if it was highly paid job, it could also be due to luck, in terms of getting the right education and advice to get there. 

And the travels are documented on the social media. I suppose she would want to show wealth to her friends as we were worse off compared to most of them in the past. 

[tlc]

We got an offer on my dads house!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

£70K under asking. 

Edited February 20, 2023 by tlc

[Spiney Norman]

4 minutes ago, tlc said:

We got an offer on my dads house!

What's the asking price?

[tlc]

£480K

[Spiney Norman]

6 minutes ago, tlc said:

£480K

So 15% under asking.

I don't think thats to bad all things considered. I would seriously consider that offer as any future offers could be even lower.

[Axeman123]

41 minutes ago, tlc said:

We got an offer on my dads house!

If the estate is going to be contested you need professional advice on accepting an offer and valuation. A grasping relative will be convinced that most of the £70k difference will have come to you in a brown envelope, likely just judging you by their own standards, so you will need to be prepared to defend your position.

Hopefully this offer brings you closer to resolving this difficult situation.

[spygirl]

9 hours ago, Axeman123 said:

@MrXxxx The wildcard is BTL and "accidental" landlords.

In previous crashes nearly all property was owner occupied, and hence liquidating meant losing both accomodation and face with the neighbours etc. These people innevitably had to be pried out of the property with a crowbar, and only then when it became impossible for them to service the loan.

This time around in contrast we have huge numbers of people that can liquidate without surface disruption to their life. This group are also very attached to paper valuations etc. They may well dump as soon as the tide turns against them, which is already happening. What the effect of this on timescales will be is unknowable of course. There is the possibility of a stock-market crash style liquidation panic IMO.

Its hot money.

People are v v  reluctant to give up the family home - cars, holidays, everything will go before the mortgage.

This is one thing that made property prices sticky- last thing to be sold.

However ... investment property has outnumbered ftbs since 2002. Btl basically replaced/outbid ftbs.

Round me theres loads - and I mean loads- of new fhls fkwits. Missed btl? Try fhl.....

Pressure on, probability of larger future loses come clear- investor are going to bail, whether they like it or not.

 

 

[One percent]

16 minutes ago, spygirl said:

Its hot money.

People are v v  reluctant to give up the family home - cars, holidays, everything will go before the mortgage.

This is one thing that made property prices sticky- last thing to be sold.

However ... investment property has outnumbered ftbs since 2002. Btl basically replaced/outbid ftbs.

Round me theres loads - and I mean loads- of new fhls fkwits. Missed btl? Try fhl.....

Pressure on, probability of larger future loses come clear- investor are going to bail, whether they like it or not.

 

 

Fhl in reading?   

[spygirl]

2 minutes ago, One percent said:

Fhl in reading?   

Furnished holiday let.

 

[One percent]

2 minutes ago, spygirl said:

Furnished holiday let.

 

Yeah I know what it stands for. But inreading?   

[MrXxxx]

8 hours ago, Axeman123 said:

My counterpoint would be that ~8% of property is owned outright BTL, from your figures. Perhaps those will also tend to have a lot of paper equity, just as a guess, and perhaps more likely to be driven by fear/greed to hold onto this. What % of housing stock normally turns over in a year, and what effect would a significant fraction of the 8% potentially have on supply/demand?

Fair points...and hopefully you are right; this is once incident where I am happy to be wrong and for 'the wheels to fall of the cart'...completely!

8 hours ago, HousePriceMania said:

Is that 1/5th the 1/5 propping up the bottom of the pyramid ?

What you mean like this?....

...let's hope so!

[Dave Bloke]

5 hours ago, HousePriceMania said:

 

Also met a pensioner skiing. 

Spending the KIds INheritance

[eek]

6 minutes ago, One percent said:

Yeah I know what it stands for. But inreading?   

Scarborough..

but it wouldn’t surprise me of people doing furnished short term “corporate” lets in Reading.

we have some in grotty parts of Darlo for gods sake.

Edited February 20, 2023 by eek

[spygirl]

27 minutes ago, One percent said:

Yeah I know what it stands for. But inreading?   

I dont live in Reading!

Left 25 y ago, barely to go back.

Reading is full - and I mean full - of tiny flats bedsits.

[JoeDavola]

There are wee terraced houses in shitty parts of Belfast that are holiday let’s now. Bung a Nespresso machine in the kitchen, shoe horn a hot tub into the back yard and boom you’re coining it in with stag and hen do’s.

Your neighbours hate you of course but that’s another matter.

Edited February 21, 2023 by JoeDavola

[HousePriceMania]

51 minutes ago, JoeDavola said:

There are wee terraced houses in shitty parts of Belfast that are holiday let’s now. Bung a Nespresso machine in the kitchen, shoe horn a hot tub into the back yard and boom you’re coining it in with stag and hen do’s.

Your neighbours hate you of course but that’s another matter.

The local terrorist groups should bring in knee cappings for Airbnb-ers.

 

[reformed nice guy]

1 hour ago, HousePriceMania said:

The local terrorist groups should bring in knee cappings for Airbnb-ers.

 

They are more likely to enforce the £59 cleaning fee and make sure you enjoy the bins when you check out

[No One]

Homeowners turn to rental market to help pay the mortgage

Biggest rise in 'accidental landlords' since 2008

ByAlexa Phillips21 February 2023 • 6:00am

Estate agents have reported the biggest surge in accidental landlords since 2008, as properties become harder to sell.

Swathes of homeowners who are unable to sell their properties are being forced to become landlords, as the property market slows down, according to Marsh & Parsons.

The real estate firm said it has seen the biggest surge in “accidental landlords” since the last housing market downturn during the financial crisis.

The agency's Graeme Young said some homeowners had been struggling to sell their homes since mortgage rates surged last autumn, following the mini-Budget in September.

He said those who are unwilling to drop the prices of their properties to ensure a sale had been turning to the rental market to help pay for their mortgage costs.

 

“They are the classic bona fide accidental landlord that had no interest in letting, couldn't sell, felt a bit disappointed about what was going on and needed to make a decision,” he said.

These accidental landlords are now reaping the benefits of soaring rental demand as longer standing landlords exit the market, causing a shortage of homes and a corresponding uptick in rental prices. Rents have gone up by 8.3pc in the year to January, according to Hamptons, another estate agency.

Gary Hall, of Knight Frank estate agents, said a rise in accidental landlords contributed to an uplift in the number of rental properties coming on to the market at the beginning of this year.

“There was a reassessment over Christmas, with people looking at their plans and thinking: ‘Actually, it's not the right time to sell, let's hold for a year or two years, and let's rent the property out.’ That came across and that definitely started. It was across the board in all parts of London,” he said.

He added landlords were moving into the “best rental market we’ve seen for years in terms of price and demand”.

Consultant Charlotte Burt, who asked for her second name to be changed for privacy reasons, discovered this at the end of last year. She was hoping to sell her one-bedroom flat in Esher, Surrey, last autumn so she could buy a bigger home with her partner.

 

The flat was put up for sale in September with an asking price of £415,000. There were no enquiries for the first two weeks so she lowered the price to £395,000. Three months later, there was still no interest.

Rather than leave the flat empty, she put it up for rent just before Christmas to cover her mortgage.

The 30-year-old found far greater demand among renters, managing to find a tenant in less than a month. The tenant signed a one-year contract with a six-month break clause that would allow Ms Burt to retake possession of the home at that point if needed.

She is charging about £1,500 a month. Her tracker mortgage costs £500 and she has additional costs like a service charge and the 8pc cost of having the property managed by a letting agent.

“It's really just covering costs, which is fine. I'm not in it to make loads of money. It's doing a service for me at the moment,” she said.

She hopes to put the flat back on the market in six months and achieve a sale. 

 

[No One]

we entered the denial stage

 

This benefits a FTB in the long run as property floods the rental market they will push rents down, allowing a FTB to rent whilst deluded accidental LL hold the falling knife for 2x years. 

[Boon]

Story doesn't really present the reality.

30 year old, I presume bought in the last few years. 

We can be generous and assume purchase price is roughty same as today (£400k), although it very much sounds like a new build (service charge) so it is likely this is off the peak cost.

Assuming tracker rates of 4.25% then that's only a mortgage of £100k on a £400k property.

Good luck kicking someone out after 6 months if they don't want to go.

Given relatively little interest deducted off the rent due to small mortgage, a lot is exposed to taxation, maybe already higher rate earner.

What's gonna change in 6 months? At the very best we're looking at the same interest rates as they are today (1 raise, 1 cut). The unwritten bit is hoping for some government prop.

Esher seems to be a very illiquid market. There are only 8 1-bed flats for sale and it lies just outside the travelcard zones. 

Who knows what might happen but surely it would be better to just keep it on and hope a person buys for non-financial reasons (which might happen in Esher).

Articles never seem to mention that selling with tenant in-situ puts FTBs out of the picture, and the numbers won't add up for a landlord to buy it.

[Wight Flight]

52 minutes ago, No One said:

The tenant signed a one-year contract with a six-month break clause that would allow Ms Burt to retake possession of the home at that point if needed

That is what is known as a six month contract.

Unusual for a tenant to accept anything other than a one way break clause. I wouldn't.

[Axeman123]

2 hours ago, No One said:

The tenant signed a one-year contract with a six-month break clause that would allow Ms Burt to retake possession of the home at that point if needed.

...start a 12 month plus arseache of a court process at a cost of several thousand pounds in fees, and the tennant likely stopping paying rent or smashing the place up, if needed.

 

[Axeman123]

Headline: House sales have worst start to the year since 2015

"House sales are off to their weakest start for the year since 2015, as properties go months without being snapped up..."

First line covers it really, interesting that they still slipped the "snapped up" phrase into an article about houses not selling!

https://uk.finance.yahoo.com/news/house-sales-worst-start-since-125323289.html

[HousePriceMania]

[spygirl]

4 hours ago, Wight Flight said:

That is what is known as a six month contract.

Unusual for a tenant to accept anything other than a one way break clause. I wouldn't.

Thats also - to attempt to take possesion.

Tenant could just sit tight and let her go thru the eviction process.

Or take a 10k payoff to fuck off.