How far will house prices fall [volume 4]

[JagLover]

98elise said:

troika said:

98elise said:

Don't forget the Land Value Tax Labour are also planning to introduce. It's expected to be 3% of the Land value, which for a home owner would be about 50% of the entire property value.

For me that's going to be a an extra 6k bill each year, and I was hoping to retire in the next couple of years.

Is this really on the cards if these clowns get in?

Yes, it was in their manifesto.

To be fair this was the sentence in their manifesto

"We will initiate a review into reforming council tax and business rates and consider new options such as a land value tax, to ensure local government has sustainable funding for the long term"

People are arriving at the 3% as this was proposed by a think tank linked with labour (I believe)

Given their backgrounds I am sure Corbyn and McDonnell will be more radical in office than in their manifesto, but a 3% LVT is not a given.

Edited to add the more interesting factor is they were proposing what would surely be a national tax (LVT) to replace a local one.

LVT remains a strong possibility under a Labour government but it wont necessarily be at 3%. Looking at it logically a 3% LVT would raise far more revenue nationally than the current council tax system.

Edited by JagLover on Thursday 3rd May 07:35

[alfaman]

Shnozz said:

Not too far away from what I am in the process of doing. Although for camper van read sell UK property and purchase in europe. UK equities reduced in SIPP aside from some of the FTSE 100 ones operating predominantly outside of the UK but domiciled here. Gold trust purchases and O&G purchases.

For a number of reasons I see a severe storm in 6 - 18 months and just little methods available for government (or BoE) to keep the plates spinning. Even when they came up with QE magic tricks last time its meant UK (and US) real-world inflation grew. The only positive trend I have witnessed between 2008 - 2018 is the reduction in borrowing leverage against property. It seems to have led to bulging pocketed spend spend spenders to other arenas and mainly car finance which has ballooned but that is another matter.

I certainly cannot see much growth ahead and given the reduction to 0% in mortgage relief on BTLs, the second stamp duty and a seemingly electorate-popular crusade against anyone who dares provide BTL homes, I can't see the climate improving in any way. With no capital growth and yields reduced I can see better options.

Like a house somewhere sunnier and fook all rent but a nice tan.

Yeah - interesting dilemma given the economic and political climate.

I’ve been living in SE Asia and recently Gulf for past 7+ years ... and close to retirement.

Don’t have a massive appetite to return to SE UK where any reasonable house in Bucks / green belt is ~1m GBP ... with high taxes and congested roads... and with an uncertain outlook.

Am thinking of summer months in UK or Europe with winter somewhere in SE Asia ( Penang / Thailand / Vietnam etc )

Difficulty is where and what to invest in to drive enough yield from a stable asset base... UK property used to be reliable ... but now?

[kingston12]

hyphen said:

kingston12 said:

..

Mail is saying that Kingston is one to watch with a likely swing to Lib Dems.

That would get rid of that questionable council leader, but will it stop the developments? It may not and just end up with higher amounts of affordable housing in them so hope those voters realise that.

My view is that the leader is happy to go. A clever guy, he has set new precedents for height and density of developments in the borough whilst slashing the requirements for design/build quality and affordable housing. All of that whilst officially not being able to benefit from it directly.

I'm sure he wants to be able to further his own interests more directly now and it is easier to do that from the outside. The only miscalculation he may have made is that Kingston now looks to have the most over-saturated supply for new-build flats anywhere outside of Nine Elms.

hyphen said:

Probably also a double edged swords for the Kingston Tory councils to be so pro-university accommodation and having built all those new blocks, as the growth of the university will also have more Lib/Labour students, especially considering Kingston is so far down the University rankings so many will be thick

I'm not sure the student population will make that much difference. A lot of those blocks remain empty, the suspicion being that they were only built in the first place as it is easier to get permission and then convert to residential later on.

The student population seems to be made up of a lot of commuting students from London/SE and non-UK students and both sets won't be registered to vote.

Of the ones that are registered, the thick ones are more likely to follow their parents voting habits rather than think for themselves, and that would be predominantly Tory or Labour rather than Lib. Voting Labour in Kingston is a waste of time, so the Tories might actually do better with the students rather than without.

[matrignano]

Looking for some opinions please. First time buyer with a £8-900k budget, aiming for a 2 bed flat (because London).

My search has so far been focused on the South Ken/Earl's Court Area (SW5, SW10). Social life and friends all in that area, transport connections are ok for central and canary wharf.
More and more stock is coming on market and price reductions are quite frequent now. Some flats are dipping below £1k sqft, but the decent (loosely speaking) stuff starts at £1.2k ish.

HOWEVER

I've so far completely dismissed Nine Elms as an overdeveloped, overpriced, undersold, greedy real estate developer's mess.
BUT, some of the flats actually look quite nice spec wise, and prices have come down a lot. For my price I could now get a much larger, newer, better specced flat than in Earl's court.
Transport is actually not too bad as I could use the river boat service to work, and then Vauxhals or Nine Elms tube when it opens next year.

Would I be mad to consider Nine Elms?
Am I right in my gut feel that it's an undersold no mans land, or could now be a decent entry point?

Edited by matrignano on Thursday 3rd May 14:46

[kingston12]

matrignano said:

Would I be mad to consider Nine Elms?
Am I right in my gut feel that it's an undersold no mans land, or could now be a decent entry point?

You are right that Nine Elms is an undersold no mans land at the moment, but it doesn't mean that will always be the case. Apart from the Tube, new facilities must surely be springing up there all the time now? It could look and feel very different in a few years time.

Personally, I'd hate to live in Nine Elms and I'd love to live in a nice part of South Ken. I'd definitely take a worse flat in the latter for the same price.

I guess Nine Elms might be an equal or better financial investment in the long term if you tie them down to a good deal now. Be careful of the services charges on new developments, though, as some of the numbers talked about are eye-watering.

Edited by kingston12 on Thursday 3rd May 15:23

[gibbon]

matrignano said:

Looking for some opinions please. First time buyer with a £8-900k budget, aiming for a 2 bed flat (because London).

My search has so far been focused on the South Ken/Earl's Court Area (SW5, SW10). Social life and friends all in that area, transport connections are ok for central and canary wharf.
More and more stock is coming on market and price reductions are quite frequent now. Some flats are dipping below £1k sqft, but the decent (loosely speaking) stuff starts at £1.2k ish.

HOWEVER

I've so far completely dismissed Nine Elms as an overdeveloped, overpriced, undersold, greedy real estate developer's mess.
BUT, some of the flats actually look quite nice spec wise, and prices have come down a lot. For my price I could now get a much larger, newer, better specced flat than in Earl's court.
Transport is actually not too bad as I could use the river boat service to work, and then Vauxhals or Nine Elms tube when it opens next year.

Would I be mad to consider Nine Elms?
Am I right in my gut feel that it's an undersold no mans land, or could now be a decent entry point?

Edited by matrignano on Thursday 3rd May 14:46

What do you want it for? What time frame? Only home etc?

What do you actually like, area / architecture / life wise?

Take the finance out of it for a second.

[Harry Flashman]

Goo point Gibbon.

In terms of long term value, they couldn't give flats in Canary Wharf away during the 1990's. Now look at how much some of those flats are worth, and it's become a pretty decent place to live (not my cup of tea, but many like it). Only took 20 years to get there...

[matrignano]

As my first ever purchase, this is clearly not going to be my forever home.
I guess I would be in the market again in 5-7 years' time, looking to upgrade, if a family comes along.

So I'd look to balance the financial side - a safe place to store (or possibly grow!) my money, and the social life - not somewhere I'd hate living in for the next 5-7 years!

Think South Ken is probably the better bet, on reflection

Edited by matrignano on Thursday 3rd May 17:02

[p1stonhead]

matrignano said:

As my first ever purchase, this is clearly not going to be my forever home.
I guess I would be in the market again in 5-7 years' time, looking to upgrade, if a family comes along.

So I'd look to balance the financial side - a safe place to store (or possibly grow!) my money, and the social life - not somewhere I'd hate living in for the next 5-7 years!

Think South Ken is probably the better bit, on reflection

I’d be scared of losing my shirt at Nine Elms for anything under say 20 years.

[loafer123]

matrignano said:

Looking for some opinions please. First time buyer with a £8-900k budget, aiming for a 2 bed flat (because London).

My search has so far been focused on the South Ken/Earl's Court Area (SW5, SW10). Social life and friends all in that area, transport connections are ok for central and canary wharf.
More and more stock is coming on market and price reductions are quite frequent now. Some flats are dipping below £1k sqft, but the decent (loosely speaking) stuff starts at £1.2k ish.

HOWEVER

I've so far completely dismissed Nine Elms as an overdeveloped, overpriced, undersold, greedy real estate developer's mess.
BUT, some of the flats actually look quite nice spec wise, and prices have come down a lot. For my price I could now get a much larger, newer, better specced flat than in Earl's court.
Transport is actually not too bad as I could use the river boat service to work, and then Vauxhals or Nine Elms tube when it opens next year.

Would I be mad to consider Nine Elms?
Am I right in my gut feel that it's an undersold no mans land, or could now be a decent entry point?

Edited by matrignano on Thursday 3rd May 14:46

Huge volumes available, foreign buyers have stopped buying, prices dropping hard, probably will stabilise eventually at around £750 psf which is ~£550-600k for a standard 2 bed flat.

[alfaman]

matrignano said:

As my first ever purchase, this is clearly not going to be my forever home.
I guess I would be in the market again in 5-7 years' time, looking to upgrade, if a family comes along.

So I'd look to balance the financial side - a safe place to store (or possibly grow!) my money, and the social life - not somewhere I'd hate living in for the next 5-7 years!

Think South Ken is probably the better bet, on reflection

Edited by matrignano on Thursday 3rd May 17:02

For consideration - ask yourself where do you actually want to live given social life/ amenities / work/ friends etc... then figure out what you can get there within your budget.

... rather than focusing on a development which may not be the best place for you to live.

[skwdenyer]

p1stonhead said:

It won’t be instant or 100% but landlords are there to make money. Unexpected losses especially if it applies to the whole market will definitely be passed on as much as reasonably possible to the end user of the property.

Perhaps they are there to make money, but the question is whether they should be able to make money by buying at market price with VP and then earning a margin from renters.

In the days of sanity and security of tenure, tenanted properties traded at a discount to market value, and were not purchasable with 95/100/whatever % mortgages. That kept the market from overheating.

BTL offers such ridiculous lender security that it absolutely *must* be regulated to stop it getting silly... oh, wait, too late...

[Rovinghawk]

skwdenyer said:

In the days of sanity and security of tenure, tenanted properties ...........were not purchasable with 95/100/whatever % mortgages.

Please show me anywhere that a BTL mortgage is available with less than a 25% deposit. They don't really exist.

skwdenyer said:

BTL offers such ridiculous lender security that it absolutely *must* be regulated to stop it getting silly... oh, wait, too late...

There are about 100 laws and 400 regulations- please don't regurgitate corbyn's crap that it's unregulated.

[skwdenyer]

Rovinghawk said:

skwdenyer said:

In the days of sanity and security of tenure, tenanted properties ...........were not purchasable with 95/100/whatever % mortgages.

Please show me anywhere that a BTL mortgage is available with less than a 25% deposit. They don't really exist.

In fairness, they don't exist any longer. The damage was done by off-plan deals for no money down. I personally know someone who took on a large number of those...

Rovinghawk said:

skwdenyer said:

BTL offers such ridiculous lender security that it absolutely *must* be regulated to stop it getting silly... oh, wait, too late...

There are about 100 laws and 400 regulations- please don't regurgitate corbyn's crap that it's unregulated.

My concerns over BTL long predate Corbyn's ascendency, and I'm quite capable of formulating my own opinions

An AST offers no more security than the term, in extremis is not binding upon the lender (unlike a an actual lease), and BTL mortgages are not subject to the same degree of compulsory attempts to help borrowers.

Yes it is all better than it was. It had to be; it was a free for all previously. But unless we reintroduce security of tenure then we will never get the market sorted out IMHO.

That a number of BTL landlords would take a bath if we did is not of my primary concern

[Rovinghawk]

skwdenyer said:

But unless we reintroduce security of tenure then we will never get the market sorted out IMHO.

So the tenant can stay as long as they want? What about the ones who don't pay the rent? It's hard enough getting the sods out now without additional difficulties being introduced.

Or do LLs not matter, only tenants?

[skwdenyer]

Rovinghawk said:

skwdenyer said:

But unless we reintroduce security of tenure then we will never get the market sorted out IMHO.

So the tenant can stay as long as they want? What about the ones who don't pay the rent? It's hard enough getting the sods out now without additional difficulties being introduced.

Or do LLs not matter, only tenants?

With respect, I mean but did not feel it necessary to explicitly say that security of tenure should be available to those who pay the rent. I've not suggested making any change there.

I happen to believe that the interests of society outweigh the interests of any particular group. I'm happy for others to hold different views; I think the debate is valuable.

Society in my view needs homes, not houses, in communities, not dormitories.

[Rovinghawk]

skwdenyer said:

With respect, I mean but did not feel it necessary to explicitly say that security of tenure should be available to those who pay the rent. I've not suggested making any change there.

Fair enough but consider this: a 3-year AST.

The LL will be bound by it. Will the tenant? Will they hell as like. When they choose to move out they'll just stop paying the rent & the LL won't have a cat in Hell's chance of getting what was contracted for.

skwdenyer said:

I happen to believe that the interests of society outweigh the interests of any particular group. I'm happy for others to hold different views; I think the debate is valuable.

The interests of society are all very well but I don't see why a specific group has to pay for what another group thinks important.

skwdenyer said:

Society in my view needs homes, not houses, in communities, not dormitories.

Then society can pay for it rather than squeezing me for it. I actually have very happy tenants plus a waiting list of their friends for when I have properties vacant. I don't see any advantage to interference.

[grantone]

skwdenyer said:

...
Yes it is all better than it was. It had to be; it was a free for all previously. But unless we reintroduce security of tenure then we will never get the market sorted out IMHO.
...

I get the impression that the George Osborne changes of stamp duty surcharge and capping interest relief at 20% have sort of killed the BTL market already.

My sister is selling a 2 bed flat in London and all the agents said the buyers would almost certainly be 'professional sharers' rather than landlords.

My mother in law is currently buying a 2 bed flat in Manchester off a landlord, she's paying £157.5k they paid £170k for it in 2006, it had a new build premium, but inflation adjusted that's a big difference.

As long as the housing supply doesn't slow down too much I can't see it being too bad a thing, I am in favour of home ownership as a route to building personal wealth, giving people a stake in their community and turning them into Conservative voters.

The current 6 month AST system doesn't seem to suit either side, rogue tenants and rogue landlords both seem to get away with too much.

[skwdenyer]

All valuable points. But regulation isn't usually needed for the good cases, only the bad.

3 year ASTs are something I have never seen offered in London, and very seldom elsewhere. The usual routine of 6/12 month ASTs is not IMHO conducive to community building. And cannot be sold, bequeathed, etc. ASTs are not any sort of asset, unlike real leases.

If there's a waiting list then a tenant leaving won't matter...

We all pay when society deems we should - higher taxes, restrictions of one sort or another. Energy performance is the latest - landlords must pay to upgrade properties.

I'm in the interesting situation of right now being both a landlord and a tenant FWIW.

[Rovinghawk]

skwdenyer said:

ASTs ...........cannot be sold, bequeathed, etc. ASTs are not any sort of asset, unlike real leases.

You have to pay for a lease, not for ASTs.

An AST is a contract between individuals. Why the hell should I make a deal to accommodate somewhen & them then be able to sell the place on to someone I haven't vetted & don't want? I want the deal kept to, not changed unilaterally.

skwdenyer said:

If there's a waiting list then a tenant leaving won't matter...

Do you genuinely think there's no exra work or extra cost? In give you inventory/inspection in & out, brief void period, reference check and deposit registration just for a start.

skwdenyer said:

We all pay when society deems we should - higher taxes, restrictions of one sort or another.

I'm pretty sure that's government not society. They often get it horribly wrong, too.

skwdenyer said:

Energy performance is the latest - landlords must pay to upgrade properties.

And tenants then pay higher rents to cover additional costs & obligations. LLs leave the market causing shortages & consequent hardship.

There's a shortage of rental housing in my neck of the woods and others ;it's predominantly diven by government interference far in excess of what is necessary and which seems to do little but provide employment for multitudes of inspectors & other parasites.