House Prices plunging

[Turion]

http://business.timesonline.co.uk/to...cle3642753.ece

£7k down since October and this is just the start.

[Sockpuppet]

Ah...but if you take a historical 12 month view they still rose 3.6% becuase of the gains at the start of the year!

BOOMED!

[Turion]

1.1% actually (in real terms 3% fall) and it's only going to get worse.

Also, for those with a mortgage on their depreciating pile there's more bad news

http://www.telegraph.co.uk/news/main.../nrates129.xml

Mortgage rates are up, despite interest rates set to come down.

The credit famine has reduced mortgage appovals by 40% due to high stricter criteria. Sanity has returnd and a decent deposit is required (40% to get the best deals!) The BTL bubble has burst, and FTB's will be force to hold off for a couple of years while they save their deposits.

[Diver]

1.1% actually (in real terms 3% fall) and it's only going to get worse.

Also, for those with a mortgage on their depreciating pile there's more bad news

http://www.telegraph.co.uk/news/main.../nrates129.xml

Mortgage rates are up, despite interest rates set to come down.

The credit famine has reduced mortgage appovals by 40% due to high stricter criteria. Sanity has returnd and a decent deposit is required (40% to get the best deals!) The BTL bubble has burst, and FTB's will be force to hold off for a couple of years while they save their deposits.

Yet the demand for rental property has increased dramatically, I have a waiting list of desperate potential tenants. one tenant has moved in with no carpets down as yet and no window sills in the bedrooms, I have to have them fitted while they are in there.
With mortgages getting harder and harder to get, the BTL market should boom with people desperate for accomodation.

[BlasterBates]

...ah yes but when you bought your BTL, when was that?

Presumably a few years ago. Then I would agree because you can charge a reasonable rent to cover your costs, and a queue of tenants all pile in to get into your flat, because the "sums" work.

At current house prices you might not be able to let it to cover the huge mortgage, as rates have actually gone up. So they may have to come down to the levels at which you bought in.

That is the problem. I agree you personally probably have nothing to fear, but whoever potentially buys your BTL, I suspect wouldn´t be able to buy at the highest prices, and make the same money you are.

You can work out how much your BTL worth from the return. Add about 2% to the lending rate, available to BTL´s, say 7% and that should be 7% of how much someone should pay for your property.

[Diver]

Point taken, and when you add the cost of buildings and public liability insurance as well. a BTL buyer is going to be looking for ridiculously high rent to cover his costs.

[BlasterBates]

...perhaps you should raise your rents

[Diver]

...perhaps you should raise your rents

I feel guilty about the amount I'm charging now.

[PAH]

Noticed on the news last night they did a comparison of mortgages payments for those that'll be coming off fixed rates soon. For each £100k of a repayment mortgage they said it would cost around 500 quid a month if interest rates are just over 5%.

Makes me grateful the company who's BTLing my current rented accommodation is only charging me 600 quid a month for a 200 grand 4 bed detached house. Even the 2 bed terraced ones in the crap end of town are almost 400 quid a month. Will almost be a shame when I move on and relocate again, though my neighbours probably won't think that.

[VectraMan]

Ah...but if you take a historical 12 month view they still rose 3.6% becuase of the gains at the start of the year!

BOOMED!

That really annoys me. I caught the start of the 1pm BBC News yesterday, and one of the headlines was "house prices rising at their slowest rate for a decade".

No they're not. IIRC it was 1.5% down in 3 months, which means 6% per year (or nearly 10% in real terms). And that's with people still buying because they believe the BBC saying prices are still going up.