Property crash, just maybe it really is different this time (Part 2)

[spunko]

Carrying on from Part 1:
 

 

[Chewing Grass]

That's Starmers Dad's house

[HousePriceMania]

Good time to re-ask the question...Is it really different this time ?

 

The squealing from the debt junkies/rising IRs/End of QE  is different...but in a back to normal sort of way

[Shits McGee]

3 minutes ago, HousePriceMania said:

Good time to re-ask the question...Is it really different this time ?

 

The squealing from the debt junkies/rising IRs/End of QE  is different...but in a back to normal sort of way

I reckon we can get to part 4 before it is ultimately decided if it really is or not, different this time (For now)

[JoeDavola]

No budge in asking prices in NI, just a contiunual deterioration of what's on the market.

I do suspect it might be different this time in the south of England where prices are a whole other level of ridiculous,

[azzuri82]

My missus is from Co. Down, and we've considered moving near Belfast (from Scotland) due to the huge savings available on property, but not quite ready to make the jump until we've established an income that doesn't depend on location (a couple of years away yet, I think).

All the macro stuff seems to suggest Irish economy flying whilst NI benefitting from still being part of de-facto Single Market - so why do you think that NI property market appears to be struggling generally?

From my experience of NI, services/wages appear to be cheaper, but products/stuff appears more expensive than over here, in particular food (which I would argue is generally of a slightly higher quality than mainland UK also).

[MightyTharg]

I don’t get this “should there be help for borrowers?” business.

There already is help. They pay interest rates that are far below inflation.

The average mortgage holder gets more in handouts than the average unemployed person. People like Martin Lewis receive millions.

It’s an absolute bonanza for the BTL crowd at the moment - rents are rising faster than inflation and their real interest rates are negative,

They are making so much money they can afford the PR to beg for even more handouts.

Even the people are here are so deluded that they imagine BTL are in trouble!

[JoeDavola]

3 minutes ago, azzuri82 said:

My missus is from Co. Down, and we've considered moving near Belfast (from Scotland) due to the huge savings available on property, but not quite ready to make the jump until we've established an income that doesn't depend on location (a couple of years away yet, I think).

All the macro stuff seems to suggest Irish economy flying whilst NI benefitting from still being part of de-facto Single Market - so why do you think that NI property market appears to be struggling generally?

From my experience of NI, services/wages appear to be cheaper, but products/stuff appears more expensive than over here, in particular food (which I would argue is generally of a slightly higher quality than mainland UK also).

I think there's plenty still selling, but if you remove the recent tech jobs from America, NI is quite a low wage economy.

Now these tech jobs might be here to stay and might push prices in the desirable areas up, but people outside of the tech wage bubble and and without BOMAD will find it very hard to play even at these prices.

I guess it depends on how the NI 'economy' flying actually filters down to the wages and spending power of the average citizen of NI.

[Virgil Caine]

15 minutes ago, MightyTharg said:

I don’t get this “should there be help for borrowers?” business.

There already is help. They pay interest rates that are far below inflation.

The average mortgage holder gets more in handouts than the average unemployed person. People like Martin Lewis receive millions.

It’s an absolute bonanza for the BTL crowd at the moment - rents are rising faster than inflation and their real interest rates are negative,

They are making so much money they can afford the PR to beg for even more handouts.

Even the people are here are so deluded that they imagine BTL are in trouble!

I have yet to hear a single media outlet mention the fact  that mortgage holders are borrowing money at interest rates lower than inflation or average wage growth. 

Edited June 21, 2023 by Virgil Caine

[Chewing Grass]

6 minutes ago, Virgil Caine said:

I have yet to hear a single media outlet mention that mortgage holders are borrowing money at interest rates lower than inflation or average wage growth.  

That requires next level thinking and is the real of right wing conspiracy theorists and pushers of misinformation.

[Chewing Grass]

Can't also believe that not a single media outlet has highlighted how fucked the normies are in private sector pension land.

Negative returns since 2020 compounded by inflation induced currency devaluation of purchasing power.

[Dave Bloke]

1 hour ago, HousePriceMania said:

Good time to re-ask the question...Is it really different this time ?

Net immigration of 1 million / year is one big difference

plus a marxist government

[HousePriceMania]

12 minutes ago, Dave Bloke said:

Net immigration of 1 million / year is one big difference

plus a marxist government

Thankfully prices aren't linked to supply and demand

[Virgil Caine]

17 minutes ago, Chewing Grass said:

Can't also believe that not a single media outlet has highlighted how fucked the normies are in private sector pension land.

Negative returns since 2020 compounded by inflation induced currency devaluation of purchasing power.

Agreed.

All classes of savers but particularly DC pension holders are being massively screwed by inflation but all the media wants to go on about is over borrowed mortgage holders.

[HousePriceMania]

I mean, what the fuck...how is this even legal

 

Property investor with £18m investments and £12.9 in company debt demands help for property investors with debt

 

The country is dead to me.

 

[With a crooked smile]

1 hour ago, MightyTharg said:

It’s an absolute bonanza for the BTL crowd at the moment - rents are rising faster than inflation and their real interest rates are negative,

They are making so much money they can afford the PR to beg for even more handouts.

Even the people are here are so deluded that they imagine BTL are in trouble!

Pretty much been saying this forever on hear. People like spy and @HousePriceMania know it as well. That's why they are so pissed off.

That said @HousePriceMania will never buy whatever the price imo.

[HousePriceMania]

[Guest]

1 hour ago, Chewing Grass said:

Can't also believe that not a single media outlet has highlighted how fucked the normies are in private sector pension land.

Negative returns since 2020 compounded by inflation induced currency devaluation of purchasing power.

Bad time for pensions in payment, lots of them have annual increase caps that are way below the current rate of inflation.

[MightyTharg]

34 minutes ago, Wight Flight said:

How does a BTL at 75% LTV and a 3% yield make money?

Unless it is capital appreciation?

Genuine question.

Look it’s fairly  simple. Imagine you buy a house in year zero by borrowing 100,000 interest only.

inflation is 10% and you pay 5% interest, 5,000 

At the beginning of the year you owe 100,000 year zero pounds

At the end of the year year you owe  90,000 year zero pounds and you’ve only paid £5000.

You are 5000 pounds better off.  

That’s without counting any rent or capital appreciation or anything.

 

[reformed nice guy]

9 minutes ago, MightyTharg said:

Look it’s fairly  simple. Imagine you buy a house in year zero by borrowing 100,000 interest only.

inflation is 10% and you pay 5% interest, 5,000 

At the beginning of the year you owe 100,000 year zero pounds

At the end of the year year you owe  90,000 year zero pounds and you’ve only paid £5000.

You are 5000 pounds better off.  

That’s without counting any rent or capital appreciation or anything.

 

Assuming the property value increases at the rate of inflation, circa 10% just now.

If it declines 3.4%, the most recent Nationwide figure for average price change, then its worth 96,600. Adjust down for inflation and its real value is 86,940

[With a crooked smile]

2 hours ago, Wight Flight said:

How does a BTL at 75% LTV and a 3% yield make money?

Unless it is capital appreciation?

Genuine question.

I totally agree with you on that but based on my experience that's not normal. In the sector I'm just about to leave (senior ish IT) a significant number of people aged 40+ own a relatively small number of properties- it's considered normal. I'm not under the impression that anyone has been MEW bigstyle or massively leavaging to expand.

I know you all want to hear the opposite and I'm sue they'll be some big fuckups that hit the media in the next couple of years but most will plod along with rents far above mortgage levels.

[MightyTharg]

1 hour ago, Wight Flight said:

That is relying on capital appreciation in real terms.

I am not sure that is going to happen over the next 12 months.

No it isn’t. Ignore the house.

Put your money in a savings account you get less interest than inflation, you lose money.

Borrow money as a mortgage, you pay less interest than inflation, you make money.

 

(Bizarrely, the government will also tax the saver who has lost money and give a tax rebate to the borrower who has made money.)

[Ash4781b]

3 hours ago, HousePriceMania said:

I mean, what the fuck...how is this even legal

 

Property investor with £18m investments and £12.9 in company debt demands help for property investors with debt

 

The country is dead to me.

 

No coasters on tables?  (Under glasses)

Edited June 21, 2023 by Ash4781b

[HousePriceMania]

31 minutes ago, MightyTharg said:

Borrow money as a mortgage, you pay less interest than inflation, you make money.

 

2 issues with that

1) You mean wage inflation.  20% general inflation and 10% wage inflation = 10% harder to service you debts

2) Borrow money as a mortgage, buy into a bubble, loose your deposit, go bankrupt bad be fucked for 20 years.

I'll take the 6% savings rates for now

If you buy government bonds at the peak interest rates, you can sit make for 30 years a very happy man.

People in the UK can't see past buying a crappy house to make money.

It's bizarre.

[HousePriceMania]

25 minutes ago, Ash4781b said:

No coasters on tables?  (Under glasses)

He doesn't look happy does he.

I wonder if he just found out the iMF/FED are in charge