House prices rose 7.3% this year, average now almost £250k

[Fubsy]

I don't know that BTL owners would be selling up. It might be regular buyers that can't get mortgages, or people that want to "wait it out" until prices bottom out/their job stability/situation improves.

There will be some BTL landlords that have no option but to sell up, all dependant on circumstances (rent income insecurity, mortgage term, employment status etc) and those properties will be snapped up by cash buyers that want to further grow their portfolios, these are often the worst type of landlord for fixing stuff and keeping places habitable in my experience as they are in it purely for profit.

No regular buyers would be able to get mortgages in that market so the only winners in a crash scenario is cash buyers, i.e. the rich, and they will then watch as the market recovers and their 20 new 2 up/2 downs increase 50% over the recovery period all the while they will be rinsing tenants for "market" rate rent even though they have no mortgage to pay. Honestly, a crash would be horrific for 'normal' people.

Also, I feel it worth mentioning that not all BTL landlords are the ultra rich multi-property unscrupulous types, my last one in particular was what I would say is a great example - he would buy plots or run down places, redevelop them with quality housing and charge what I would call a fair rent for the area (have to recoup costs somehow) and without someone like that I would have had to settle for some of the awful properties that were in the area I live in now - the ones that someone has bought for a cheap price and done nothing to bring up to standards or modernise, expensive to heat, mould problems, rough areas etc.

I'm out of the renting game now though, although it wasn't my choice nor my desire to own (mortgage) a home it was all my partners desire and I've come along for the ride as scary as it is - on my own I was too lazy to do the footwork/saving/sacrifice to get the mortgage although as a result we are now VERY lean with minimal direct debits or unnecessary purchases or services, the lockdowns have made saving even easier as there are more limited ways to waste money on - but then that links into the economy failing so everything has unintended consequences.

 

[silversurfer]

And Ive argued this till the cows come home . It’s people’s sense of entitlement in this country that makes me sick , I’d like a house on Park Lane Mayfair or St Mawes In Cornwall or even Sandbanks - guess what ? I can’t afford it .

Theres plenty of cheap property around the UK . Even if you don’t want to live there buy it and rent it out , rinse and repeat every 7-8 years when you can take some equity out - it’s really not that hard to do .

Its capital risk so it wont happen that easily. i do think the effects of distance in business the obvious inefficiency of commuting in comparison means value in housing will be more evenly distributed in the future over what's happened with the London housing boom for decades past.

Interest rates aren't set by the government.

I agree and change will be forced by rising costs most likely there will not be a choice as UK just imports too much. Capitalism isnt about central banking either but here we are, it will alter as its not a stable situ

 

[robgmun]

Do you live in Dormanstown as your profile suggests?
If so, then this is near you.
https://www.rightmove.co.uk/property-for-sale/property-73868385.html
There are hundreds of properties for <£100,000. Your username suggests you were born in 1991.
I don't understand how a 29 year old cannot afford this.

WTF? It's probably because I grew up and live in London but that place is an absolute steal!

 

[sneakysnail]

WTF? It's probably because I grew up and live in London but that place is an absolute steal!

For the price it's good but it's tiny, you'd tolerate it to get on the ladder but I couldn't imagine trying to raise a family in a house like that. better off smashing all the walls down and making it a nice 1-2 bedroom house with open plan living space downstairs.

 

[HACO]

And Ive argued this till the cows come home . It’s people’s sense of entitlement in this country that makes me sick , I’d like a house on Park Lane Mayfair or St Mawes In Cornwall or even Sandbanks - guess what ? I can’t afford it .

Theres plenty of cheap property around the UK . Even if you don’t want to live there buy it and rent it out , rinse and repeat every 7-8 years when you can take some equity out - it’s really not that hard to do .

What???? Are you seriously suggesting that people should go and buy properties in cheaper towns, drying up the supply for local people and drive up prices, and then cash in and buy something for themselves or else they're entitled???????? Or maybe you're the freaking entitled one who thinks you can just walk in and take advantage of poor locals in poorer areas of the country.

While it's not that hard to act like a psychopath if you're actually a psychopath, but it's very difficult to act that way if you're not a psychopath.

Both myself and the missus started with nothing and worked our careers up from nothing. We are about to buy a lovely 4 bed detached with a double garage, nice area, schools etc for 300,000. It's in the midlands but we have access to everything. Within an hour to East Midlands airport etc. Our salary is above the national average and whilst we might theoretically get another ten grand between us down south the quality of life will be far worse.

There is plenty of housing available and accessibility for everything. People just need to realise the south is just uneconomical to the vast majority of people. We managed to save a 30k deposit in two years whilst both working around the national average wage ten years ago but we were very frugal. Everyone wants the latest I phone or car lease but then moan about renting.

My brother in law came to this country in 2005 with nothing and no skills. Even his English wasn't the best. He bought a decent sized detached house ten years ago and will be mortgage free within the next decade.

The good old avocado toast argument.

FYI, young people now spend a smaller % of their income on lifestyle items, holidays and leisure than young people did 30 years ago. Literally hundreds of studies across UK, Europe and the US confirm this.

 

[Loagi]

If wide-spread working from home continues after covid then it will certainly impact house prices as people move. Personally I think a lot of working from home will get clawed back in the 12 months 'after' covid, but if working from jobs are still readily available, then well see more people move from expensive areas into cheaper rural areas that have little in the way of jobs. I'll be one of them !

 

[n30_mkii]

I just hope the government stops propping everything up, it's important that people do loose jobs in times of recession, and that businesses do fail and house prices do crash. It makes no sense whatsoever that stocks are at all time highs and that the property market is growing exponentially. I earn good money and we are struggling to buy somewhere as prices have jumped in our area by £150k on most four bed detached houses. Our economy is being artificially pumped and balanced whilst everything begins to get out of kilter, these effects will be terrible when reality starts to kick in. I feel this is going to be a big contribution to my children struggling to afford any way of life that is comfortable moving forwards. I.e a house, pension, savings.

 

[dl8860]

We bought in 2010 and whilst the housing market didn't crash there were plenty of cheap repo's which was fantastic if you had money at the time. I guess that's what buyers will need to hope for now and I am sure there will plenty.

*posts about buying house by pulling up by bootstraps in thread about houses being overpriced
*bought house in 2010

 

[Uther]

What???? Are you seriously suggesting that people should go and buy properties in cheaper towns, drying up the supply for local people and drive up prices, and then cash in and buy something for themselves or else they're entitled???????? Or maybe you're the freaking entitled one who thinks you can just walk in and take advantage of poor locals in poorer areas of the country.

IIRC he's a BTL landlord, that's how they think and **** the locals.

 

[potatolord]

If wide-spread working from home continues after covid then it will certainly impact house prices as people move. Personally I think a lot of working from home will get clawed back in the 12 months 'after' covid, but if working from jobs are still readily available, then well see more people move from expensive areas into cheaper rural areas that have little in the way of jobs. I'll be one of them !

If working from home becomes viable longer-term, it has to impact on the housing market. I would expect reduced demand for starter homes and flats in cities.

 

[Fubsy]

Imagine working your ass off to get a mortgage for a flat in a major city as your first step on the ladder, COVID hits, work becomes remote, demand in that city drops along with the price - I'm hoping that doesn't happen because that would be soul destroying for the young people (I'm talking under 40 here) that have done just that. Trapped in a flat that no one will want to buy. Oh and I forgot about all the cladding and leasehold crap going on as well.

 

[jaybee]

If house prices "crash" and you are among the majority of home owners in that you own one single home as your actual home rather than an investment, then the price doesn't matter that much. Most properties rise and fall with those around them so everyone's would be worth less.

The losers are people that took out huge mortgages when houses were at super high prices and will be paying them off at a very high rate until they retire, aka me. But then what can you do. If you wait for the crash, you might be waiting years. In that time you rent for a further few years and pay off another landlord's mortgage by another 50k, which could have gone into your own house. I don't regret buying a house last year as I was in a position where I was able to do so and stop my 20 year long renting stint. I would do anything to get away from that regardless of the risks of going into negative equity if house prices crash.

You only really win in this game if you own more than one property and can cash out/sell, or, if you downsize having bought years previously.

 

[Fubsy]

Problem I was talking about was if you'd save 15k for a deposit on a flat priced at 300k (in London for example) - so 5%. The demand drops, the market value of the flat drops, problems with leases, cladding on buildings etc, flat is now only attracting interest at £250k and you need to move for work or something (with unemployment rising you need to be flexible to get the work), you no longer have any deposit and back to square one as there is no positive equity, it's now negative and eaten into your initial 15k.

That's not beyond the realms of possibility, and I reckon your only choice would be to rent it out and use the income to rent where you need to move until the market recovers.

 

[adam cool dude]

The good old avocado toast argument.

FYI, young people now spend a smaller % of their income on lifestyle items, holidays and leisure than young people did 30 years ago. Literally hundreds of studies across UK, Europe and the US confirm this.

I bought my house ten years ago and am only 34. Not 30 years ago.

Also leisure and lifestyle items are far cheaper now then what they were years ago so your point is mute. £70 for a N64 game, £1500 for a mid range Tiny computer, holidays abroad cost peanuts now as well.

 

[adam cool dude]

*posts about buying house by pulling up by bootstraps in thread about houses being overpriced
*bought house in 2010

Lol I did it during peak financial crash when you needed 25% deposit to get a mortgage and rates were terrible. By comparison it is a piece of cake to get a mortgage now. Never had help to buy and if you asked for 5% deposit you would get laughed out the building.

 

[silversurfer]

If wide-spread working from home continues after covid then it will certainly impact house prices as people move

It'll adjust but some of the change is permanent and people are ignoring or not taking into account that likely change. It was going to happen anyway, free markets always work to remove efficiency that's why they are the best system not giant government and fixed pricing etc. What best serves society is what's going to happen, some of the people who buy into London prices and lose have to trust its better overall not to feed and support an inefficient or unbalanced housing boom that stacks people in one area when we got empty parts of the country unused comparatively.

By comparison it is a piece of cake to get a mortgage now.

Still tons of paperwork depending which web of red tape you get caught in

 

[neocon]

There will be some BTL landlords that have no option but to sell up, all dependant on circumstances (rent income insecurity, mortgage term, employment status etc) and those properties will be snapped up by cash buyers that want to further grow their portfolios, these are often the worst type of landlord for fixing stuff and keeping places habitable in my experience as they are in it purely for profit.

No regular buyers would be able to get mortgages in that market so the only winners in a crash scenario is cash buyers, i.e. the rich, and they will then watch as the market recovers and their 20 new 2 up/2 downs increase 50% over the recovery period all the while they will be rinsing tenants for "market" rate rent even though they have no mortgage to pay. Honestly, a crash would be horrific for 'normal' people.

Also, I feel it worth mentioning that not all BTL landlords are the ultra rich multi-property unscrupulous types, my last one in particular was what I would say is a great example - he would buy plots or run down places, redevelop them with quality housing and charge what I would call a fair rent for the area (have to recoup costs somehow) and without someone like that I would have had to settle for some of the awful properties that were in the area I live in now - the ones that someone has bought for a cheap price and done nothing to bring up to standards or modernise, expensive to heat, mould problems, rough areas etc.

I'm out of the renting game now though, although it wasn't my choice nor my desire to own (mortgage) a home it was all my partners desire and I've come along for the ride as scary as it is - on my own I was too lazy to do the footwork/saving/sacrifice to get the mortgage although as a result we are now VERY lean with minimal direct debits or unnecessary purchases or services, the lockdowns have made saving even easier as there are more limited ways to waste money on - but then that links into the economy failing so everything has unintended consequences.

I agree, it would be horrific. It's also far too big to fail now, so would need proping up by the government.

 

[HACO]

I bought my house ten years ago and am only 34. Not 30 years ago.

Good for you. Do you want a cookie?

 

[AndrewNR]

I just hope the government stops propping everything up, it's important that people do loose jobs in times of recession, and that businesses do fail and house prices do crash. It makes no sense whatsoever that stocks are at all time highs and that the property market is growing exponentially. I earn good money and we are struggling to buy somewhere as prices have jumped in our area by £150k on most four bed detached houses. Our economy is being artificially pumped and balanced whilst everything begins to get out of kilter, these effects will be terrible when reality starts to kick in. I feel this is going to be a big contribution to my children struggling to afford any way of life that is comfortable moving forwards. I.e a house, pension, savings.

Too late for that. These days people moan and the Government cave in.

The free money is propping up assets big willy style.

 

[413x]

Hi

If house prices "crash" and you are among the majority of home owners in that you own one single home as your actual home rather than an investment, then the price doesn't matter that much. Most properties rise and fall with those around them so everyone's would be worth less.

The losers are people that took out huge mortgages when houses were at super high prices and will be paying them off at a very high rate until they retire, aka me. But then what can you do. If you wait for the crash, you might be waiting years. In that time you rent for a further few years and pay off another landlord's mortgage by another 50k, which could have gone into your own house. I don't regret buying a house last year as I was in a position where I was able to do so and stop my 20 year long renting stint. I would do anything to get away from that regardless of the risks of going into negative equity if house prices crash.

You only really win in this game if you own more than one property and can cash out/sell, or, if you downsize having bought years previously.

Also bought first home last year. Literally before pandemic. (jan/feb) and obviously could get caught in neg equity. Not as likely as those who've just bought.

It's kind of depressing that in a year the dentade in mortgage is so small. That even a small drop in prices could erase it.