Property crash, just maybe it really is different this time

[spygirl]

Its easy to an IO mortgage when IRs are 1% ffs. Sub 2k/year.

 

[Phil]

9 minutes ago, satch said:

I have a relative moaning about the state of the bloody housing market, prices of rentals and prices to buy are rising at a ridiculous rate. The relative (and new partner) were renting and signed a new multi-year contact, the landlord has after a few months given them notice … the landlord can probably get a much higher rent now than that specified in the multi-year contact. When the pandemic was ongoing the landlord was quite happy to have a good paying tenant and was clearly worried about getting a new tenant who might decide not to pay the rent and could, because of the pandemic, not be evicted. But now rents are rising and needs must as they say … bloody housing market.

 

The relative and new partner are also now looking to buy and are annoyed that the property they want to buy has had an open-house viewing (the property was sold (sold!) recently and is now back on the market!)  and is open to multiple bids with the good old fashioned bidding war … ‘offers over the asking price’ says the estate agent with some glee and relish … ‘so, how much to secure the property?’ … ‘well clearly you are in a bidding war so there will be you and a couple of others, maybe more after all the viewings’ … and the ‘mystery’ bidder, the no-existent one, who has just come in and trumped every bid by another 20 grand … you will need to offer 30 grand extra … well it does say offers over … the relative is worried that even if their bid is accepted then someone will come in and outbid them … and then the mortgage company may not lend what it is worth! … bloody housing market …

 

Still not to worry the new partner still has their property which is in a different part of the country, that’s right they want to keep that one to rent it out as they will get a better return than putting the money in the bank and property prices are rising at 11 percent every year. Also the good news is that if they wish to move back to the other area then they already have the property and can simply get rid of the tenant and move in themselves … bloody economy is a mess but at least the housing market is working.

 

There are all kinds of silly games going on. Mainly by TPTB. It’s amazing how screwed everyone is, some more than others, but the main thing is for me, when is it gonna blow up? Probably never. Once again TPTB will come up with some brilliant idea. I’m currently going through the, I fuckin hate this cuntry. I can’t see that changing.

I needed to see a quack at the local drop in center on Saturday. I never use the nhs so was unawares I had to call 111 for an appointment . So I’m at the centre in front of the reception desk. Nurse said make the appointment on 111 to see the quack who was sat in an office, doing fa waiting for the next appointee. That would have been me. So I called 111, explained my need ( toothache which felt like it had gone all infected) waited for the appointment for 20mins for her to come back and say they couldn’t make the appointment. Wtf. 
So. Housing- fucked. NHS - fucked. Dentist- have to go private- fucked. Me - fucked over. Yes, this is a cuntry and I’m paying taxes for these privileges. Imo.

[Boon]

Don't get where the problem is.

£180k interest only would be only a couple of hundred a month, maybe even less as that mortgage could have simply reverted to base rate + 0.x% for the remainder.

£280k 3 bed house in Guildford might be worth double or more today, just sell it.

Of course if she wants to maintain her current lifestyle that may not be possible but the issue seems to be that she has gone down to one income.

 

[spygirl]

Telewags recycing 2006 articles -

The housing market has got so out of hand that first-time buyers are taking a new approach: if you can’t beat ’em, join ’em. Thousands of first-time buyers are now opting to invest in properties they will never live in and stay renting in the more expensive areas they favour.

Nearly one in 10 buy-to-let mortgages are taken out by first-time buyers as young people priced out of London and the South East turn landlord instead.

The number of first-time purchasers applying for buy-to-let mortgages has jumped by 5pc in the past year, according to Norton Finance, a broker. They accounted for one in 12 of all buy-to-let mortgages the firm has processed. This suggests that, nationally, at least 9,000 first-time buyers have become landlords in a year.

Rod Lockhart of LendInvest, a lender, said: “These first-time buyers tend to be living and working in London and buying regional property. Naturally, they want to own their own home, but their affordability in London is much more stretched. They are investing to build up deposits.”

Katie Wilson, 37, editor of The Boutique Handbook, an online magazine, said she could not afford to buy in the capital, where she lives and works. “In London, unless you get a lot of help or you’re super rich, or you’re in a relationship and have a joint income, it’s not possible. I even looked at buying in Margate in Kent, but house prices there have gone up so much too,” she said.

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She pays £1,000 a month as a lodger in a house in Hackney. But in 2020 she also became a landlord herself. She could afford to buy in Nottingham, her home town, where she bought a two-­bedroom flat for £150,000 from her sister.

“I would never have bought it for myself to live in,” she said. “It’s a total investment.”

She has taken out an interest-only mortgage on which her monthly payments, which she has just fixed for five years, are £200. She receives £700 in rent, on which she must pay income tax, and is able to save £430 a month.

The property is now valued at £180,000, a jump of 20pc. Ms Wilson said she hoped eventually to be able to sell and buy a property for herself.

James Barnett (left) and his brother Nicholas clubbed together to use their joint income to purchase a buy-to-let in north London in March CREDIT: Clara Molden for The Telegraph

Other first-time buyers are teaming up to take out mortgages based on their joint income. James Barnett, 25, has been saving by living at home in north London, but could not get a mortgage for a property that he wanted to live in on his salary. “Right now I can get to work easily and all of my friends are here. If I moved further afield, I would be taking a step back,” he said.

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He and his brother Nicholas, 23, decided to buy together and completed on a £450,000 two-bedroom flat near Woodside Park, north London, in March. They have split everything equally and are on a standard variable rate mortgage because it gives them greater flexibility if one of them wants to sell.

Their monthly payments on the property are £900 and the rental income is £1,500. “We haven’t made a profit from the rent yet, but that’s not really why we’re doing it. For us it is much more about the potential for capital growth,” said Mr Barnett. They hope to be able to sell the property in future for £500,000, which would give them £25,000 each.

It is a tactic favoured by those who use the so-called “bank of mum and dad”. In 2016 Mark Scott, 35, used a gift from his parents to buy a three-bedroom property in Harlow, Essex, which he let out. He saved the rental profits while he lived at home.

Mr Scott and his partner, Alicia Osbourne-Carey, 34, sold up in 2021. Ms Osbourne-Carey said: “It sold within 24 hours.” They put the cash towards their first home, a £588,995 three-­bedroom detached house in David Wilson Homes’ Sawbridge Park development in Hertfordshire.

Mark Scott and his partner Alicia Osbourne-Carey have just bought their first home after selling a buy-to-let property

Andrew Weir of London Central Portfolio, a buying agent, said he was helping a brother and sister in their early 20s who were looking for a buy-to-let in the capital. “They are fresh out of university. They have a variety of job options, not all of which are in Britain. They don’t want to delay getting on the property ladder but they don’t know where they want to live,” said Mr Weir.

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“They want a tangible asset as a hedge against inflation. It’s a trend that we’re seeing among a younger age group who are not confident of being in one place long term and have a much more mobile approach.

 

[Boon]

Those examples are pretty funny.

The woman is gonna be in trouble if interest rates are not 0.5% when the fixed rate ends. If she is paying £1,000 a month rent then almost certainly the rental income is at higher tax rate.

The £430 saving appears to budget for management fee (10%) but nothing for voids, repairs, or anything else. Being prudent true pre-tax profit might be £3k. 

I would say even if she kept that for 5 years the profits made would be wiped out by the loss of FTB/additional stamp duty if she buys in London.

Those two brothers are idiots, the type of mugs the house of cards need to keep going. Probably watched a few episodes of Homes under the Hammer.

Their mortgage rate seems to assume a hefty deposit, no doubt from BOMAD. If they can't be in profit with £900 mortgage and £1,500 rent that kinda implies large service charges and large management fees. If the mortgage is truly variable then it would have gone up 2 or 3 times already since it was agreed. Selling for £500k doesn't give £25k each as there are fees and voids. Assuming that interest rates are still going up it might be hard to find anyone that wants a 3.6% gross yield.

More over, fuck the media. They must know these people are the very opposite of shrewd property investors, but they have chosen to say nothing. Reflects most of the country, who would rather people like these lose their money as long as their own house price is protected.

[XswampyX]

Quote

First Homes scheme: discounts for first-time buyers
If you’re a first-time buyer, you may be able buy a home for 30% to 50% less than its market value. This offer is called the First Homes scheme.

The home can be:

a new home built by a developer
a home you buy from someone else who originally bought it as part of the scheme
The First Homes scheme is only available in England.

Eligibility
You must be:

18 or older
a first-time buyer
able to get a mortgage for at least half the price of the home
buying the home as part of a household where total income is no more than £80,000 (or £90,000 if you live in London)
The local council may also set some eligibility conditions.

For example, some councils may prioritise giving First Homes discounts to:

essential workers
people who already live in the area
those on lower incomes
Exemptions for armed forces and their families
You’re exempt from council conditions about being an essential worker or living in the area if you’re:

a member of the armed forces
the divorced or separated spouse or civil partner of a member of the armed forces
a widow or widower of a deceased member of the armed forces (if their death was caused wholly or partly by their service)
a veteran who left the armed forces in the last 5 years
You still need to meet other eligibility conditions.

How it works
You can look for new homes in your area that are advertised by developers as part of the First Homes scheme.

Developers offer these homes to first-time buyers with 30% to 50% of the market value taken off the price.

Every home that’s sold is valued by an independent surveyor to make sure the discount is based on actual market value.

The homes cannot cost more than £420,000 in London, or £250,000 anywhere else in England, after the discount has been applied.

You can only sell the home to someone who is eligible to buy a First Home. You must give them the same percentage discount that you got, based on the home’s market value at the time of sale.

How to apply
Contact the developer (or estate agent if you’re buying from a previous First Homes buyer) and tell them you want to buy a First Home.

They’ll help you to complete the application, then send it to the local council.

You’ll have to pay a fee if the First Home you want to buy is a new build. The amount is set by the developer.

You’ll get the fee back if your application is unsuccessful.

WTF! :- https://www.gov.uk/first-homes-scheme

[spygirl]

8 hours ago, Boon said:

Those examples are pretty funny.

The woman is gonna be in trouble if interest rates are not 0.5% when the fixed rate ends. If she is paying £1,000 a month rent then almost certainly the rental income is at higher tax rate.

The £430 saving appears to budget for management fee (10%) but nothing for voids, repairs, or anything else. Being prudent true pre-tax profit might be £3k. 

I would say even if she kept that for 5 years the profits made would be wiped out by the loss of FTB/additional stamp duty if she buys in London.

Those two brothers are idiots, the type of mugs the house of cards need to keep going. Probably watched a few episodes of Homes under the Hammer.

Their mortgage rate seems to assume a hefty deposit, no doubt from BOMAD. If they can't be in profit with £900 mortgage and £1,500 rent that kinda implies large service charges and large management fees. If the mortgage is truly variable then it would have gone up 2 or 3 times already since it was agreed. Selling for £500k doesn't give £25k each as there are fees and voids. Assuming that interest rates are still going up it might be hard to find anyone that wants a 3.6% gross yield.

More over, fuck the media. They must know these people are the very opposite of shrewd property investors, but they have chosen to say nothing. Reflects most of the country, who would rather people like these lose their money as long as their own house price is protected.

Rate rise dont normally kill LLs - voids do, all the time.

1k/m for Nottingham seems very high. I doubt rents will stay high for long after the covid shit all clears up.

In ye olde days, LL used to look for at least a 10% margin - and that was on a repayment mortgage.

The leverage of IO BTL is truly fucking insane.

I can accept that lending money to retired couple, with the OO on the line. Good business for the bank; insane for the OAPs.

But lending IO BTL to potless, with no margins. Jesus.

I wish theyd put the banks theyd borrowed from.

 

 

 

[spygirl]

8 hours ago, Boon said:

Those examples are pretty funny.

The woman is gonna be in trouble if interest rates are not 0.5% when the fixed rate ends. If she is paying £1,000 a month rent then almost certainly the rental income is at higher tax rate.

The £430 saving appears to budget for management fee (10%) but nothing for voids, repairs, or anything else. Being prudent true pre-tax profit might be £3k. 

I would say even if she kept that for 5 years the profits made would be wiped out by the loss of FTB/additional stamp duty if she buys in London.

Those two brothers are idiots, the type of mugs the house of cards need to keep going. Probably watched a few episodes of Homes under the Hammer.

Their mortgage rate seems to assume a hefty deposit, no doubt from BOMAD. If they can't be in profit with £900 mortgage and £1,500 rent that kinda implies large service charges and large management fees. If the mortgage is truly variable then it would have gone up 2 or 3 times already since it was agreed. Selling for £500k doesn't give £25k each as there are fees and voids. Assuming that interest rates are still going up it might be hard to find anyone that wants a 3.6% gross yield.

More over, fuck the media. They must know these people are the very opposite of shrewd property investors, but they have chosen to say nothing. Reflects most of the country, who would rather people like these lose their money as long as their own house price is protected.

Its tax - that 1500 rent will be tax at 30% to 50%

[sarahbell]

https://inews.co.uk/opinion/bank-of-mum-and-dad-helped-kids-buy-home-face-financial-ruin-1660573

[Axeman123]

7 hours ago, XswampyX said:

WTF! :- https://www.gov.uk/first-homes-scheme

Surely, people will que around the block for the 30-50% discount properties and full price ones will be tumbleweed. The scheme seems designed to recalibrate expectations of value down to the discounted price. In practice I would expect almost no availability under this scheme, unless the government is paying developers for the 30-50% discount. The big question is whether this will be a real discount, or if the old price will become the new discounted price.

The elephant in the room is the timing of the announcement, and BJ's looming VoNC. This seems like another shopping trolley announcement to me.

[spygirl]

46 minutes ago, spygirl said:

Rate rise dont normally kill LLs - voids do, all the time.

1k/m for Nottingham seems very high. I doubt rents will stay high for long after the covid shit all clears up.

In ye olde days, LL used to look for at least a 10% margin - and that was on a repayment mortgage.

The leverage of IO BTL is truly fucking insane.

I can accept that lending money to retired couple, with the OO on the line. Good business for the bank; insane for the OAPs.

But lending IO BTL to potless, with no margins. Jesus.

I wish theyd put the banks theyd borrowed from.

 

 

 

And on the BBC -

https://www.bbc.co.uk/news/business-61650382

Lou Valdini for example, had a flat in London and two more in South Yorkshire which he rented out. He's now letting them all go.

"I feel disillusioned by the sector, it was something I enjoyed and wanted to keep doing," he says.

But during the pandemic one tenant stopped paying rent for sixteen months at the same time as behaving poorly towards fellow residents in the block.

"All that time I was paying the costs and mortgage, as well as getting complaints," Mr Valdini explains. It cost him around £20,000, he says.

"The stress was huge. And I'm not a professional big company with people working for me to sort these things. It all fell on my shoulders."

[spygirl]

31 minutes ago, Axeman123 said:

Surely, people will que around the block for the 30-50% discount properties and full price ones will be tumbleweed. The scheme seems designed to recalibrate expectations of value down to the discounted price. In practice I would expect almost no availability under this scheme, unless the government is paying developers for the 30-50% discount. The big question is whether this will be a real discount, or if the old price will become the new discounted price.

The elephant in the room is the timing of the announcement, and BJ's looming VoNC. This seems like another shopping trolley announcement to me.

The UK Housing market depends entirely on how high and how fast the Fed tighten.

 

[spygirl]

52 minutes ago, sarahbell said:

https://inews.co.uk/opinion/bank-of-mum-and-dad-helped-kids-buy-home-face-financial-ruin-1660573

The the loon Marxist a the I again - 

 

Many things affect access to home ownership, not least house prices. But, since 2008, the cost and availability of mortgage finance to first time buyers has been a huge factor. Unless the system is democratised, Britain’s housing market will continue to be divided along class lines into those who have access to family wealth, and those who do not. As interest rates rise, that could be costly and cause problems further down the line for older people who leveraged themselves to help by borrowing against their future security.

 

[Axeman123]

5 minutes ago, spygirl said:

Unless the system is democratised,

What could be more democratic than a free market, both for property and money?

[spygirl]

34 minutes ago, spygirl said:

And on the BBC -

https://www.bbc.co.uk/news/business-61650382

Lou Valdini for example, had a flat in London and two more in South Yorkshire which he rented out. He's now letting them all go.

"I feel disillusioned by the sector, it was something I enjoyed and wanted to keep doing," he says.

But during the pandemic one tenant stopped paying rent for sixteen months at the same time as behaving poorly towards fellow residents in the block.

"All that time I was paying the costs and mortgage, as well as getting complaints," Mr Valdini explains. It cost him around £20,000, he says.

"The stress was huge. And I'm not a professional big company with people working for me to sort these things. It all fell on my shoulders."

At the ~200/m profit most IO BTL seem to scrape, thats a good ~10 years of 'profits' gone.

 

[Democorruptcy]

The workers getting 100% pay for 80% of the hours.

If this catches on people will be able to get a 2nd job for their day off and leverage it up on a larger mortgage?

 

[Yadda yadda yadda]

I haven't seen EA flyers like this before.

[HousePriceMania]

     

[reformed nice guy]

3 hours ago, sarahbell said:

https://inews.co.uk/opinion/bank-of-mum-and-dad-helped-kids-buy-home-face-financial-ruin-1660573

This is all part of the generation funnel that is almost at its limit.

The grandparents would have had anywhere from 4 to 7 siblings.

That combined wealth got passed down to the parents generation. They were maybe one of 3 to 5.

The previous generation was normally 2 or 3 kids. Only one or two of those have kids.

The current generation is a single child but gets the full financial input from their parents, 4 grandparents and other family members.

They usually cant afford to have children of their own....

[spygirl]

https://www.mumsnet.com/talk/legal_money_matters/4486795-help-to-buy

dogmumma · 20/02/2022 17:53

Hello!

Me and my husband brought a new build property 5 years ago this October, and were due to start repaying the interest from this October, which we were fully aware of and understood. What I didn't realise is all the complexities of wanting to repay the loan/remortgage etc. involving conveyancers, solicitors etc. seems mental that something that was meant to help young first time buyers had so many hidden terms and conditions. I had no idea it would be this complex. Or that they'd get a proportional share of the value of your house at the time of repayment. It's basically a helping hand with lots of ties attached. Feeling a little stupid... which I'd held out longer and saved the additional myself..

[HousePriceMania]

1 hour ago, spygirl said:

https://www.mumsnet.com/talk/legal_money_matters/4486795-help-to-buy

dogmumma · 20/02/2022 17:53

Hello!

Me and my husband brought a new build property 5 years ago this October, and were due to start repaying the interest from this October, which we were fully aware of and understood. What I didn't realise is all the complexities of wanting to repay the loan/remortgage etc. involving conveyancers, solicitors etc. seems mental that something that was meant to help young first time buyers had so many hidden terms and conditions. I had no idea it would be this complex. Or that they'd get a proportional share of the value of your house at the time of repayment. It's basically a helping hand with lots of ties attached. Feeling a little stupid... which I'd held out longer and saved the additional myself..

The penny has dropped.

[CVG]

4 hours ago, spygirl said:

https://www.mumsnet.com/talk/legal_money_matters/4486795-help-to-buy

dogmumma · 20/02/2022 17:53

Hello!

Me and my husband brought a new build property 5 years ago this October, and were due to start repaying the interest from this October, which we were fully aware of and understood. What I didn't realise is all the complexities of wanting to repay the loan/remortgage etc. involving conveyancers, solicitors etc. seems mental that something that was meant to help young first time buyers had so many hidden terms and conditions. I had no idea it would be this complex. Or that they'd get a proportional share of the value of your house at the time of repayment. It's basically a helping hand with lots of ties attached. Feeling a little stupid... which I'd held out longer and saved the additional myself..

My husband and I, FFS

[Wight Flight]

2 hours ago, CVG said:

My husband and I, FFS

Bought, not brought. Wished not which.

Is there no test for this kind of thing?

[HousePriceMania]

It's relentless....

 

Asking prices up 2.2% They're now at 517K up from 400K when Boris took over !!!

Listing volumes up 5% in a month but still down on a year ago, but trend is very much up#

Region wise....

East mids up 12% in a year.

London up 10% in a year

York up 12% in a year

Scotland up nearly 7% in 1 month

Depressing stuff.

Tomorrow Boris will "help" us all again.

[A_P]

On 06/06/2022 at 13:29, spygirl said:

https://www.mumsnet.com/talk/legal_money_matters/4486795-help-to-buy

dogmumma · 20/02/2022 17:53

Hello!

Me and my husband brought a new build property 5 years ago this October, and were due to start repaying the interest from this October, which we were fully aware of and understood. What I didn't realise is all the complexities of wanting to repay the loan/remortgage etc. involving conveyancers, solicitors etc. seems mental that something that was meant to help young first time buyers had so many hidden terms and conditions. I had no idea it would be this complex. Or that they'd get a proportional share of the value of your house at the time of repayment. It's basically a helping hand with lots of ties attached. Feeling a little stupid... which I'd held out longer and saved the additional myself..

HTB terms & conditions were what started me on me my property awakening journey (not a particularly good thing imo). It was clear as day, though many aren't really going to fully comprehend it.

I went into the office the next day explained this to a colleague. The next week they were at another HTB site and went and bought right away. six or seven years later is has actually worked out for them (for now at least).

It is possible to sort out the equity loan portion without too much hassle....many on personalfinanceUK (I haven;t read for a long time) where doing this.

I wouldn't be too hard on couples who are just trying to get on with things.