How far will house prices fall [volume 4]

[kingston12]

Sa Calobra said:

Looking at that house prices chart ^ crazy that even since the 2008 'crash' prices simply didn't crash.

Wonder what Brexit will do? They can't keep increasing surely? Unless it's driven by a nation of multiple property landlords

A lot must depend on the attitude of foreign investors. Demand for UK property from them seemed to be down prior to the Brexit vote, but the resulting crash in the value of the pound must have revived interest somewhat.

UK landlords will be the next biggest factor. No one has minded tiny rental returns when capital values are increasing by 10% each year. That has stopped in certain areas of the country and shorter term investors may be put off adding to their portfolio if that spreads. It will take a long time because the bull-run has been so protracted this time around that it will take people longer to accept that housing is not a one-way bet.

[Sheepshanks]

Rovinghawk said:

Thank you. It's near Birmingham. The return is bloody good because I bought something where others weren't willing to put the effort & risk in.

To be fair, it sounds like you took a hefty gamble. Fine if you can afford the risk.

In our village a near-derelict (the roof had partly fallen in) house sold at auction for about £10K less than one in good condition would go for.

[fishseller]

mike74 said:

You're quite right, the 2008 ''crash'' was no such thing, it was strangled at birth and wasn't allowed to happen.


Governments/central banks have been using every trick in the book and throwing everything on to the bonfire since then to prop up and further inflate property prices at the expense of just about every other aspect of the economy.

They know full well that the wider economy is fked beyond repair and the only thing they've got any semblance of control and manipulation over is property prices... and it's the only way they can give the masses any kind of illusory economic ''feel good factor''


.... and yet some simpletons will still insist it's down to nothing more than ''supply and demand innit''

Spot On the plates will stop spinning eventually

[ClaphamGT3]

mike74 said:

You're quite right, the 2008 ''crash'' was no such thing, it was strangled at birth and wasn't allowed to happen.


Governments/central banks have been using every trick in the book and throwing everything on to the bonfire since then to prop up and further inflate property prices at the expense of just about every other aspect of the economy.

They know full well that the wider economy is fked beyond repair and the only thing they've got any semblance of control and manipulation over is property prices... and it's the only way they can give the masses any kind of illusory economic ''feel good factor''


.... and yet some simpletons will still insist it's down to nothing more than ''supply and demand innit''

Your second post shows your own analysis to be no less simplistic.

Having been at the sharp end of the property market for nearly thirty years I have seen enough to be wary of intervention from politicians of any hue. In this cycle however, intervention specifically targetted at stimulating the housing market has been limited and more than slightly offset in some sectors by measures specifically aimed at cooling it.

Outside the more swivel-eyed sections of HPC, no one credible believes that the interest rate policy of the (questionably) independent BoE was primarily focused on stimulating the property market and the same is true of QE.

So that leaves the only acts to intervene to support housing prices as HTB and related schemes and, less directly, a refusal to further deregulate investment in new homes building by LAs and RPs.

All Governments since the 2008 recession have known that, except in pockets too small to be electorally material, property prices have created anything but a feel-good factor until very recently.

George Osborne, in his latter years as Chancellor, probably did as much to cool the housing market as to stoke it up.

[tannhauser]

mike74 said:

You're quite right, the 2008 ''crash'' was no such thing, it was strangled at birth and wasn't allowed to happen.


Governments/central banks have been using every trick in the book and throwing everything on to the bonfire since then to prop up and further inflate property prices at the expense of just about every other aspect of the economy.

They know full well that the wider economy is fked beyond repair and the only thing they've got any semblance of control and manipulation over is property prices... and it's the only way they can give the masses any kind of illusory economic ''feel good factor''


.... and yet some simpletons will still insist it's down to nothing more than ''supply and demand innit''

Indeed. fking cretins.

Completely agree with all of your post.

[Rovinghawk]

mike74 said:

Governments/central banks have been using every trick in the book and throwing everything on to the bonfire since then to prop up and further inflate property prices at the expense of just about every other aspect of the economy.

They know full well that the wider economy is fked beyond repair and the only thing they've got any semblance of control and manipulation over is property prices... and it's the only way they can give the masses any kind of illusory economic ''feel good factor''

How do you square that with the attacks on BTL and effectively forcing some LLs to sell, thereby pushing prices downwards?

[Pork]

Sheepshanks said:

To be fair, it sounds like you took a hefty gamble. Fine if you can afford the risk.

In our village a near-derelict (the roof had partly fallen in) house sold at auction for about £10K less than one in good condition would go for.

That's been happening for ages but I reckon it's about to change. Builders are rediculously expensive nowadays so unless you're handy yourself, buying a 'doer upper' inst financially attractive, imo.

I'd like to do it for satisfaction purposes but I don't think buying somewhere and paying someone to do all the works for you financially stacks up at present.

[Sa Calobra]

Rovinghawk said:

How do you square that with the attacks on BTL and effectively forcing some LLs to sell, thereby pushing prices downwards?

Fear of over exposure due to some overstretching themselves to borrow (even more)?

[mike74]

Rovinghawk said:

How do you square that with the attacks on BTL and effectively forcing some LLs to sell, thereby pushing prices downwards?

The ''attacks'' on BTL have been anaemic at best and have gone no way at all to pushing prices down or countering the various govt/BoE policies that have driven HPI since 2008.

[untakenname]

I know two people with multiple properties and both if them are now selling due to Section 24, imo they have left it too late as everywhere I look now (in S/E at least) landlords are trying to offload hmo converted houses yet there's no people now willing to buy (at current prices anyway).
Anecdotal but near me S/E London rents are now down 20% compared to two years ago and lots of landlords just want out due to voids caused by reduced demand from European renters and horror stories from Croydon about UC which imo will be the driver for lowering prices.

[jonah35]

I think some people are still missing a trick

You can still buy perfectly acceptable 2 bed terraced homes or apartments in the north for £60k and rent them out for £450 per month

Buy 2 or 3 of those and ok you won’t be a millionaire but it always gives you a regular income

I don’t know why more people don’t do it

[gibbon]

jonah35 said:

I think some people are still missing a trick

You can still buy perfectly acceptable 2 bed terraced homes or apartments in the north for £60k and rent them out for £450 per month

Buy 2 or 3 of those and ok you won’t be a millionaire but it always gives you a regular income

I don’t know why more people don’t do it

Because i dont want to be a professional part time handy man part time debt collector.

[jonah35]

gibbon said:

jonah35 said:

I think some people are still missing a trick

You can still buy perfectly acceptable 2 bed terraced homes or apartments in the north for £60k and rent them out for £450 per month

Buy 2 or 3 of those and ok you won’t be a millionaire but it always gives you a regular income

I don’t know why more people don’t do it

Because i dont want to be a professional part time handy man part time debt collector.

Why would you be a part time handyman? What would go wrong if you buy a sound house? The boiler maybe but you’d send a plumber for that and other than that in a small mid terrace what goes wrong if bought correctly? Plus if you have to send a handyman along for half a days worth it would cost you £45.

Secondly why would you be a part time debt collector? Wouldn’t you ask the tenants to pay via standing order and get a property owner to be their guarantor and just email the guarantor if the rent is late?

I appreciate I’ve been doing this years and some haven’t but don’t see why it has to be tough.

So many people earn £20-35k per year which is say roughly £1200-2100 pm net and they could put their savings to far better use than have £200k sat in cash isas, kids savings, a £30k car and so on.

Anyway, each to their own and some may find it too grim up north but it sure beats a commute and having a boss and targets and stress. I’m sat posting this from a (Northern) coffee shop before heading to the gym

[kingston12]

Rovinghawk said:

mike74 said:

Governments/central banks have been using every trick in the book and throwing everything on to the bonfire since then to prop up and further inflate property prices at the expense of just about every other aspect of the economy.

They know full well that the wider economy is fked beyond repair and the only thing they've got any semblance of control and manipulation over is property prices... and it's the only way they can give the masses any kind of illusory economic ''feel good factor''

How do you square that with the attacks on BTL and effectively forcing some LLs to sell, thereby pushing prices downwards?

I don't take the view that low interest rates and QE were aimed at house prices, but an asset bubble was an expected side effect and probably very positive for the government at the time.

The skill is to then raise taxes on landlords and stamp duty on high value properties above £930k, making it look to the rest of the public that they are punishing those responsible for the bubble.

Whilst existing LLs and OOs might have done very well out of the bubble, new entrants have actually lost out and none of them were responsible for the policies that caused it in the first place.

[p1stonhead]

jonah35 said:

gibbon said:

jonah35 said:

I think some people are still missing a trick

You can still buy perfectly acceptable 2 bed terraced homes or apartments in the north for £60k and rent them out for £450 per month

Buy 2 or 3 of those and ok you won’t be a millionaire but it always gives you a regular income

I don’t know why more people don’t do it

Because i dont want to be a professional part time handy man part time debt collector.

So many people earn £20-35k per year which is say roughly £1200-2100 pm net and they could put their savings to far better use than have £200k sat in cash isas, kids savings, a £30k car and so on.

How many people have any of this let alone people earning £20-35k?

[TheLordJohn]

p1stonhead said:

How many people have any of this let alone people earning £20-35k?

Everyone on PH.

[gibbon]

jonah35 said:

Why would you be a part time handyman? What would go wrong if you buy a sound house? The boiler maybe but you’d send a plumber for that and other than that in a small mid terrace what goes wrong if bought correctly? Plus if you have to send a handyman along for half a days worth it would cost you £45.

Secondly why would you be a part time debt collector? Wouldn’t you ask the tenants to pay via standing order and get a property owner to be their guarantor and just email the guarantor if the rent is late?

I appreciate I’ve been doing this years and some haven’t but don’t see why it has to be tough.

So many people earn £20-35k per year which is say roughly £1200-2100 pm net and they could put their savings to far better use than have £200k sat in cash isas, kids savings, a £30k car and so on.

Anyway, each to their own and some may find it too grim up north but it sure beats a commute and having a boss and targets and stress. I’m sat posting this from a (Northern) coffee shop before heading to the gym

Because problems do occur, and they take time, energy and money to resolve, and on £450 a month rent a new boiler is 3 months rent, a washing machine 1 months rent, new carpet, a months rent. It all adds up.

Multiple flats to make up the desired income will clearly involved multiple times the hassle of singular rentals/other passive investments.

Im just offering a counter argument to the 'everyone can make 10%+ yield a year on small northern terraces' argument.

I have a flat i rent out for more per week than your quoted monthly figure. I just replaced the washing machine. It cost me 5 days rent and that included paying the guy to come fit it and take the old one away.

Two years ago i had a new boiler fitted, cost me three weeks rent, again, that was paying up so i had essentially nothing to do with it.

I also have only one tenant to deal with and own an asset that if it all goes wrong i would enjoy living in / parents could live in / kids could live in one day or if i move out of the city I can use as a bolt hold in later life.

I have no use for multiple northern family homes in areas I wouldnt care to ever live.

I'm not anti northern, I am northern, i just dont think you are offering a balanced view.

[Rovinghawk]

gibbon said:

I have a flat i rent out .................
I also have only one tenant

Devil's advocate- all your eggs are in one basket.

[mike74]

jonah35 said:

I think some people are still missing a trick

You can still buy perfectly acceptable 2 bed terraced homes or apartments in the north for £60k and rent them out for £450 per month

Buy 2 or 3 of those and ok you won’t be a millionaire but it always gives you a regular income

I don’t know why more people don’t do it

Utter rubbish. There is NOWHERE in the UK where you could buy a decent property requiring little/no renovation or maintenance work in a reasonable area where you'll attract decent, respectful tenants, all for £60k

As others have already said at that kind of price point you'll be doing constant repairs and maintenance and only attracting the less reliable type of tenants

Edited by mike74 on Tuesday 21st November 09:58

[gibbon]

Rovinghawk said:

Devil's advocate- all your eggs are in one basket.

A valid point. I try to keep it in really good condition, and not your average rental. Its been let for over 4 years, my third set of tenants have recently moved in. I have had no vacancies at all, and have rent at a price im very happy with (touch wood!).