Property crash, just maybe it really is different this time

[spygirl]

Let's cross some threads.

To buy the UK average house- according to Halifix - 275k.

The household would need a deposit of 27k and a house holdhold income 60k.

You are touching on households needing to be in top 20% earners.

 

[Joncrete Cungle]

29 minutes ago, spygirl said:

Let's cross some threads.

To buy the UK average house- according to Halifix - 275k.

The household would need a deposit of 27k and a house holdhold income 60k.

You are touching on households needing to be in top 20% earners.

 

If your numbers are correct it puts us in the top 20% Doesn't feel like we are anywhere close to top 20%

[Boon]

You can mess about with shit here:

https://ifs.org.uk/tools_and_resources/where_do_you_fit_in

I would guess there are some illusions at play, in that some people are richer than they appear to be due to credit or parents. But disproportionately the poorer people in society are less visible.

[spygirl]

34 minutes ago, Joncrete Cungle said:

If your numbers are correct it puts us in the top 20% Doesn't feel like we are anywhere close to top 20%

And it assumes that, on your journey to 60k, you've not took on other debt - credit cards, car debt, store cards etc.

The number of people with free cash to take on a large mortgage is tiny.

[spygirl]

Put it thus way - a typical UK has 30%-50% of working age pop drawing benefits, one way or another, excluding them from mortgages.

Then you've got tye two old.

Too spendthrift.

Etc etc.

The number of prime, high earning potential mortgage customers is tiny.

[Joncrete Cungle]

24 minutes ago, spygirl said:

And it assumes that, on your journey to 60k, you've not took on other debt - credit cards, car debt, store cards etc.

The number of people with free cash to take on a large mortgage is tiny.

No debt apart from £120 on credit card for fuel that will be paid in full when due. When we bought in 2016 there was pressure to borrow more, spend more etc. No one thought about interest rates or mortgage rates going up in the future, well apart from me.

[Joncrete Cungle]

27 minutes ago, spygirl said:

Put it thus way - a typical UK has 30%-50% of working age pop drawing benefits, one way or another, excluding them from mortgages.

Then you've got tye two old.

Too spendthrift.

Etc etc.

The number of prime, high earning potential mortgage customers is tiny.

They used to include bennies as income for mortgage lending pre 2008 I am sure. 

[spygirl]

1 hour ago, Joncrete Cungle said:

They used to include bennies as income for mortgage lending pre 2008 I am sure. 

They did.

They dont now.

[spygirl]

3 hours ago, Joncrete Cungle said:

If your numbers are correct it puts us in the top 20% Doesn't feel like we are anywhere close to top 20%

Its genuinely hard to determine someones finances/wealth.

I know people who are living large, far beyond their earnings.

Absent some large inheritance or secret lottery win, I'd guess tte only they keep it going is a lot if debt.

Every now and then I hear of someones whove sold up, after 20 years of home ownership and are penniless.

Everybut of equity extracted, every penny earnt spent.

[spygirl]

15 hours ago, spygirl said:

https://www.thetimes.co.uk/article/want-a-big-mortgage-youll-need-a-bigger-salary-r8kq3kmwt

Borrowers who want larger mortgages now need higher salaries to get them.

Anyone who wants a loan of 4.75 times their income from HSBC now needs to earn £50,000 a year, up from £40,000 before. Those who earn less than this will be limited to 4.49 times their income, as will borrowers who do not have at least a 10 per cent deposit. The change means that someone with an income of £40,000 who until Monday would have been able to borrow a maximum of £190,000 would now be limited to £170,600.

HSBC said it was nothing to do with rises in the cost of living and was part of a regular review of its risk appetite.

Last month Nationwide Building Society increased the minimum salary that first-time buyers needed to borrow 5.5 times their income under its Helping Hand mortgage scheme. Single borrowers now need £37,000, up from £31,000, and couples need £55,000, up from £50,000. It said this was to keep it within Bank of England rules that say a lender can only lend 15 per cent of its mortgages a year at more than 4.5 times salaries.

Halifax, Britain’s largest mortgage lender, is handing out more though. On Wednesday it said “resilient customers” with incomes of £75,000 or more would be able to borrow 4.75 times their salary, up from 4.49 times.

Id add that these 4.?x figures are ther absolute maximum.

Once the bank has taken into account utility costs, regullar spend etc etc,  theyll knock 5k-10k off household income, taken anther 25k-50k off the mortgage amount.

Dont listen to EA and Halifax - 

https://www.fca.org.uk/data/mortgage-lending-statistics

• The outstanding value of all residential mortgage loans was £1,613.4 billion at the end of 2021 Q4, 4.7% higher than a year earlier.
• The value of gross mortgage advances in 2021 Q4 was £70.2 billion, 8.4% lower than in 2020 Q4, and the lowest level since 2020 Q3.
• The value of new mortgage commitments (lending agreed to be advanced in the coming months) in 2021 Q4 was 2.0% less than the previous quarter at £77.3 billion, and 11.9% less than the recent peak of £87.7 billion a year earlier.

 

Typical LTV is 3.3x.

 

 

 

 

[Inque]

Same vein

https://news.sky.com/story/banks-to-tighten-lending-to-homebuyers-as-cost-of-living-crisis-bites-12588075

Banks to tighten lending to homebuyers as cost of living crisis bites

Any hit to the size of mortgages homebuyers can get will slow the property market down this year, experts say.

[Plan-b]

I've just had a visit from the EPC (Energy Performance Certificate) assessor.

He said that 90% of the BTL properties he's seen (many thousand's) wont make the proposed band 'C' for new tenancies by 2025.

Out of those a large percentage would need significant improvements and a lot were unlikely to ever make it.

He also said more than half of private landlords are unaware that these rules could affect them

Could be hard times ahead for the rent seekers.

(also posted on the credit deflation thread)

[Bobthebuilder]

23 minutes ago, Plan-b said:

I've just had a visit from the EPC (Energy Performance Certificate) assessor.

He said that 90% of the BTL properties he's seen (many thousand's) wont make the proposed band 'C' for new tenancies by 2025.

Out of those a large percentage would need significant improvements and a lot were unlikely to ever make it.

He also said more than half of private landlords are unaware that these rules could affect them

Could be hard times ahead for the rent seekers.

(also posted on the credit deflation thread)

I have already noticed a couple of let houses near me getting improvement works. One has just had new windows and doors fitted, the other is having the full works, windows, doors, re wire, old cylinder and heating out, new A rated combi in. Also noticed an external gas meter upgraded to smart monitor.

Looks like some are ahead of the game.

[With a crooked smile]

51 minutes ago, Plan-b said:

I've just had a visit from the EPC (Energy Performance Certificate) assessor.

He said that 90% of the BTL properties he's seen (many thousand's) wont make the proposed band 'C' for new tenancies by 2025.

Out of those a large percentage would need significant improvements and a lot were unlikely to ever make it.

He also said more than half of private landlords are unaware that these rules could affect them

Could be hard times ahead for the rent seekers.

(also posted on the credit deflation thread)

It's capped at 3.5k's worth of changes as usual on here this a smoke and mirrors quote. Plus it's tax deductible. 

Edited April 11, 2022 by With a crooked smile

[Plan-b]

18 minutes ago, With a crooked smile said:

It's capped at 3.5k's worth of changes as usual on here this a smoke and mirrors quote. Plus it's tax deductible. 

Been recommended to be revised to a cap of £10k, 2.5 years away a lot can change

https://www.landlordtoday.co.uk/guides-tips/breaking-news/2021/10/epc-upgrades--raise-cap-for-landlord-spending-government-told

[With a crooked smile]

2 minutes ago, Plan-b said:

Been recommended to be revised to a cap of £10k, 2.5 years away a lot can change

https://www.landlordtoday.co.uk/guides-tips/breaking-news/2021/10/epc-upgrades--raise-cap-for-landlord-spending-government-told

Recommended by a green councilor who's not part of the government...

[Bobthebuilder]

26 minutes ago, With a crooked smile said:

It's capped at 3.5k's worth of changes as usual on here this a smoke and mirrors quote. Plus it's tax deductible. 

It is currently 3.5k to meet current minimum EPC band E.

By the time we get to 2025 the fine for not having a current EPC on a new sale or let will be £30,000.

[With a crooked smile]

8 minutes ago, Bobthebuilder said:

It is currently 3.5k to meet current minimum EPC band E.

By the time we get to 2025 the fine for not having a current EPC on a new sale or let will be £30,000.

The key bits of thr bill are "where practical, cost-effective and affordable as defined under section 1(4)."

Also it's 2028 for sitting tenants.

And don't get me started on "easy to get EPCs " valid for 20 years where the company issuing them just disappears. More common than you might think.

[Bobthebuilder]

To add to my post above about how some landlords are doing improvements now. I notice in the regs that their new EPC will be "locked in" for ten years, before they have to do anything else.

Looks like the early birds are on the money already.

[With a crooked smile]

Year 20 years was a typo

[Option5]

5 minutes ago, With a crooked smile said:

Also it's 2028 for sitting tenants.

So better security of tenure for some?

[Bobthebuilder]

Just now, With a crooked smile said:

Year 20 years was a typo

Its ten years.

90% of my self employed business is gas certificates for landlords.

The good ones are getting on with this stuff already, lots of new A rated gas combis going into rentals at the moment.

[With a crooked smile]

2 minutes ago, Bobthebuilder said:

Its ten years.

90% of my self employed business is gas certificates for landlords.

The good ones are getting on with this stuff already, lots of new A rated gas combis going into rentals at the moment.

I know a chartered surveyor has around 100 properties mostly flats has about 20 houses from when he first started). 

He has a warehouse which he's got a load of Baxi boilers and their spare parts. Likes all the places on the same boiler.  As soon as the existing properties boiler has an issue he gets it swapped out for.one from stores.

Any subsequent issue and he just gets the plumber to pick up the parts from his own warehouse.

Personally I use Valliant. Had a flat swapped over in the last 18 months largely because the boiler was playing up once every 12 months and I didn't want the hassle of being contacted about it.

[Chewing Grass]

8 minutes ago, Bobthebuilder said:

The good ones are getting on with this stuff already, lots of new A rated gas combis going into rentals at the moment.

Bet they are a reliability headache in the medium term.

[Bobthebuilder]

2 minutes ago, With a crooked smile said:

I know a chartered surveyor has around 100 properties mostly flats has about 20 houses from when he first started). 

He has a warehouse which he's got a load of Baxi boilers and their spare parts. Likes all the places on the same boiler.  As soon as the existing properties boiler has an issue he gets it swapped out for.one from stores.

Any subsequent issue and he just gets the plumber to pick up the parts from his own warehouse.

Personally I use Valliant. Had a flat swapped over in the last 18 months largely because the boiler was playing up once every 12 months and I didn't want the hassle of being contacted about it.

I look after one of the best landlords in South London, all Valliant and Baxi.