Property crash, just maybe it really is different this time

[sancho panza]

4 minutes ago, dnb24 said:

Yep, the huge amount of new builds in east London- all of them blocks of flats have institutional names all over them- pension funds, banks etc,

We haven't seen that in my neck of the woods.Any particualr postcodes you can think of that are swamped with this stuff.?

[Bobthebuilder]

2 minutes ago, sancho panza said:

For sure.

If you think of all the underperfoming IO BTL loans that are out there( @spygirl has covered this many many times).The bank has two choices repo and sell at a loss,or repo,roll it into anotehr loan to antoehr company at a much cheaper price with better LTV/Loan to income ratio and Bob's your uncle.

As I've said before,msot of the BTLers I know aren't aware that their home(well it's equity anyway) is in the default chain if their BTL empire goes pop.Good news for Llloyds.They make the BTLer tkae a loss,smack a second charge on the BTLers main home and rinse and repaet the loan to their own vehicle at better rates and everyone's a winner except the BTLer.

Time for Lloyds shares? I have a load I bought 13 years ago, be nice if they did anything.

[dnb24]

1 minute ago, sancho panza said:

We haven't seen that in my neck of the woods.Any particualr postcodes you can think of that are swamped with this stuff.?

Canning Town, Silver town, Pontoon dock, East India-  e14, e16. They won’t be on the market just yet, but there are literally 1000s being built. 

[sancho panza]

3 minutes ago, dnb24 said:

Canning Town, Silver town, Pontoon dock, East India-  e14, e16. They won’t be on the market just yet, but there are literally 1000s being built. 

I'm intriuged.Be interesting to see the inventory figure when they start getting added.

e14 circa 22 months inventory

E16 10 months inventory.

[sancho panza]

11 minutes ago, Bobthebuilder said:

Time for Lloyds shares? I have a load I bought 13 years ago, be nice if they did anything.

Their Dowd Buckner ratio is circa 3% ie market cap over total assets.Not much protection for the equity holder imho.

I could be wrong.

Still a way better option than barclays.

[Hancock]

2 hours ago, sancho panza said:

I'd welcome some institutions replacing a lot of the tight wad/cheap toilet seat type 55 year olds currently providing homes in disrepair.

But they will be in addition to them.

When other banks and corporations follow them down this route, then pretty much all new builds will be snapped up by the banks which kills the market dead.

You won't own anything but you'll be happy.
https://www.telegraph.co.uk/business/2021/08/19/lloyds-plans-become-one-britains-biggest-landlords/

[Hancock]

14 minutes ago, Bobthebuilder said:

Time for Lloyds shares? I have a load I bought 13 years ago, be nice if they did anything.

I'd sooner buy shares in the Taliban, at least they're up front about being terrorists.

[sancho panza]

1 minute ago, Hancock said:

But they will be in addition to them.

When other banks and corporations follow them down this route, then pretty much all new builds will be snapped up by the banks which kills the market dead.

You won't own anything but you'll be happy.
https://www.telegraph.co.uk/business/2021/08/19/lloyds-plans-become-one-britains-biggest-landlords/

I rent and I'd rather rent from Lloyds than the cheap toilet seat brigade.Period.

House prices will deflate because ban balance sheets will deflate imho.

[Hancock]

21 minutes ago, sancho panza said:

For sure.

If you think of all the underperfoming IO BTL loans that are out there( @spygirl has covered this many many times).The bank has two choices repo and sell at a loss,or repo,roll it into anotehr loan to antoehr company at a much cheaper price with better LTV/Loan to income ratio and Bob's your uncle.

 

I believe that by law they have to attempt get maximum market value for repossessions.

 

[spygirl]

21 minutes ago, sancho panza said:

For sure.

If you think of all the underperfoming IO BTL loans that are out there( @spygirl has covered this many many times).The bank has two choices repo and sell at a loss,or repo,roll it into anotehr loan to antoehr company at a much cheaper price with better LTV/Loan to income ratio and Bob's your uncle.

As I've said before,msot of the BTLers I know aren't aware that their home(well it's equity anyway) is in the default chain if their BTL empire goes pop.Good news for Llloyds.They make the BTLer tkae a loss,smack a second charge on the BTLers main home and rinse and repaet the loan to their own vehicle at better rates and everyone's a winner except the BTLer.

The home they live in, their pension fund - banks can take a charge or force a draw down.

Banks will take everything before they take a hit to their capital.

And its commercial lending, so very big boy rules.

 

[spygirl]

Just now, Hancock said:

I believe that by law they have to attempt get maximum market value for repossessions.

 

They have to demonstrate they sought to achieve the best price.

Tgey wont hang on, listed for months, aimlessly waiting to achieve 120% of previous highest price.

List it for months, then off to auction.

[Hancock]

2 minutes ago, sancho panza said:

I rent and I'd rather rent from Lloyds than the cheap toilet seat brigade.Period.

House prices will deflate because ban balance sheets will deflate imho.

But the only reason you rent is because Lloyds and such like were bailed out in 2008 with taxpayers money, and then they've been handed god knows how many billions via QE/ZIRP/FFL/TFS etc... ever since.

I'm of the opinion we need to go back to the way things were with people renting off the council, i trust British corporations far less than Fungus and his wife.

[Hancock]

4 minutes ago, spygirl said:

They have to demonstrate they sought to achieve the best price.

Tgey wont hang on, listed for months, aimlessly waiting to achieve 120% of previous highest price.

List it for months, then off to auction.

Yes so it means they cant flog it to a Lloyds Landlord Incorporated at friends prices.

 

[spygirl]

24 minutes ago, sancho panza said:

I'm not so sure,there are an increasing number of BTL loans that no longer wash the banks face.They currently have them on their books covering the interest but know tighter regs or rising IR's are around the corner.

This is a ponteially neat and tidy way of clearing the mess up.Also easier for teh govt to bail it out.

I think they are exploring options, both to get a better margin than mortgages and looking for a better means of matching life annuities - the clever idea of retail / shopping centres hitting the shitter, hard.

Again, the low returns, low IR spreads and the new, expensive regulation, points to mortgages becoming a more n more specialist area, suitable for larger lenders only. No longer shooting fish in a barrel.

 

[Chewing Grass]

2 minutes ago, Hancock said:

But they will be in addition to them.

When other banks and corporations follow them down this route, then pretty much all new builds will be snapped up by the banks which kills the market dead.

You won't own anything but you'll be happy.
https://www.telegraph.co.uk/business/2021/08/19/lloyds-plans-become-one-britains-biggest-landlords/

Three huge blocks of flats have gone up near me on the old railway sidings, steel framed with the shoddiest brickwork facing I have ever seen and six stories in height. All rental via the same company, the one that built them. All 2 bedroom and all £920pm, about 50% more than a shonky terrace with 2 bathrooms and 2 parking spaces.

They are carving out a whole chunk of the market.

[spygirl]

1 minute ago, Hancock said:

Yes so it means they cant flog it to a Lloyds Landlord Incorporated at friends prices.

 

They are not interested. Seriously.

Btl  is commercial lending. Unregulated. The banks can shove the house up the LLs arse if they want.

[spygirl]

Just now, Chewing Grass said:

Three huge blocks of flats have gone up near me on the old railway sidings, steel framed with the shoddiest brickwork facing I have ever seen and six stories in height. All rental via the same company, the one that built them. All 2 bedroom and all £920pm, about 50% more than a shonky terrace with 2 bathrooms and 2 parking spaces.

They are carving out a whole chunk of the market.

Optimistic pricing.

As the market grows the smarter operator will grasp that it's best to have a low rent flat occupied rather than an expensive one empty.

[dnb24]

35 minutes ago, sancho panza said:

I'm intriuged.Be interesting to see the inventory figure when they start getting added.

e14 circa 22 months inventory

E16 10 months inventory.

Tbh mate I doubt they’ll even come to market- when everything got shut down last year- these sites were full steam ahead - they weren’t worried about liquidity- at the time I remember thinking there’s some big players behind these- not for the BTL market

[Hancock]

10 minutes ago, Chewing Grass said:

Three huge blocks of flats have gone up near me on the old railway sidings, steel framed with the shoddiest brickwork facing I have ever seen and six stories in height. All rental via the same company, the one that built them. All 2 bedroom and all £920pm, about 50% more than a shonky terrace with 2 bathrooms and 2 parking spaces.

They are carving out a whole chunk of the market.

Best part of a grand a month, so you can get to the office faster than everyone else, what a life!

[sancho panza]

1 hour ago, Hancock said:

I believe that by law they have to attempt get maximum market value for repossessions.

 

Which means they'll flood the market and then put them through auctions at a rate of knots with no bids off the walls.....lots of ways to skin a cat

They don't even need to sell them off cheap.New build premium is circa 16%,antoehr 15% and theyre at 30% off which turns a 5% yield into a 7% yield.jsut saying.

 

[sancho panza]

1 hour ago, spygirl said:

The home they live in, their pension fund - banks can take a charge or force a draw down.

Banks will take everything before they take a hit to their capital.

And its commercial lending, so very big boy rules.

 

It's truly terrifying what these BTLers are playing with.ALso I suspect that BTLers won't be protected from the margin call clauses the way resi mrotgages will be.

I know BTLers who were losing moeny every motnh even before S24 kicked in.But HPI bailed them out.

I look at the months inventory on flats in LE2 as an example -18- compared to 2 for semis,and there's your car crash waiting to happen.I suspect when one of them starts selling to secure their equity,they'll all try and fit through the exit at the same time.

[sancho panza]

1 hour ago, spygirl said:

They have to demonstrate they sought to achieve the best price.

Tgey wont hang on, listed for months, aimlessly waiting to achieve 120% of previous highest price.

List it for months, then off to auction.

sorry I see you already answered this one spy.

The boards of landlordzone will be full of psots about ruthless banks explotiing the cheap toilet seat brigade.

[sancho panza]

1 hour ago, Hancock said:

Yes so it means they cant flog it to a Lloyds Landlord Incorporated at friends prices.

 

Auctions are full of sharks and marks,if you're not a shark,you're a mark.

If you're an IO BTLer are marks.They'll wish the axe had fallen back in 08

[sancho panza]

1 hour ago, dnb24 said:

Tbh mate I doubt they’ll even come to market- when everything got shut down last year- these sites were full steam ahead - they weren’t worried about liquidity- at the time I remember thinking there’s some big players behind these- not for the BTL market

INteresting.It's like the student rooms that got routed through various conduits to Far Eastern investors.Makes a lot of sense from their perspective.

[sancho panza]

1 hour ago, spygirl said:

They are not interested. Seriously.

Btl  is commercial lending. Unregulated. The banks can shove the house up the LLs arse if they want.

I had a mate who repoed for one of the bigger BS's back in the early noguhties.He said when they decided to push for possession,there was little the mortgagor could do legally if they were in arrears.