Impending house price crash

[Paralytic]

Most BTL's out there (airbnb's included) are on borrowed money and in some situations now loss making.

Source please.

[scooterscot]

The data is available on government website, such as ONS. Here is another source:

Buy-to-let statistics - Finder UK

From the website:

Quick overview

• In the last 12 months, 234,000 buy-to-let mortgage loans were taken out (June 2019)
• Of these loans, 169,000 were remortgages and 65,000 were used for house purchases
• Over £36 billion was borrowed on buy-to-let mortgages in the last 12 months
• Of this £36 billion, £8.7 billion was used for house purchases and £27.3 billion for remortgages
• Up to 4.5 million Brits could be living in buy-to-let properties in the UK

In England BTL stock is around 4.85 million. Therefore from above, about 5% of stock in the last 12 months was remortgaged.

So the other 95% is bought on cash? Nope. In fact the above are the well off landlords (older folks usually retired) with equity to remortgage with. A significant number of private landlords are on their old SVR home loan, the moved and rented out!! I think around 35-45%.


Have a scan of this government report - some highlights from below:

https://assets.publishing.service.go...ain_report.pdf


"Landlords who had been letting for longer were more likely to have used amortgage to fund their first rental property and more likely to currently use aBuy to Let mortgage compared to more recent landlords

Almost two thirds (63%) of those who had been a landlord for three years or lesshad used a mortgage to fund their first rental property compared to three quartersof those who had been a landlord for longer (73% of those who had been alandlord for between four and 10 years, and 75% of those a landlord for 11 ormore years).


About half (49%) of those who had been a landlord for three years or less had aBuy to Let mortgage to fund their current property/ies. This increased to 58% ofthose who had been letting for between four and 10 years, and 54% for thoseletting for 11 or more years."




In summary BTL is not what most think it is, i.e. a pension with huge expenses. Really if you follow the money, it is a credit vehicle for banks allowing them to increase their balance sheets without any real money entering the economy and the landlord taking all the risk.

[northernladuk]

Yawn......

[vetran]

1. House prices are based on two incomes. Some people will have 0 or 1 incomes

2. Banks lend people up to 6 times double earnings. They will be more cautious with higher unemployment, and falling collateral prices. This leads to a credit crunch, as people cannot borrow 6 times earnings. Deposit sizes will increase. Banks have less money to lend too, as people stop saving.

3. Why would immigrants keep coming here, the economy is broken. Plus More death yet to come. Reducing demand

4. People think buy to let is a much riskier income, and that house prices will fall soon. The anticipation of falling prices and perceived risk of being a landlord leads to deflation.

5. As homes are repossessed, they are dumped on the market, leading to increased supply and falling prices. Falling prices of collateral leads to a credit crunch(cause of point 2)

6. Higher unemployment leads to falling wages, which feeds into point 2

7. Foreign economic problems lead to less foreigners buying UK property


Sent from my iPhone using Contractor UK Forum

All sensible but there are plenty of people who have money who will invest. Plenty of Chinese/Russian billionaires who already buy property for the returns. Until we have a surplus house values won't fall to 2* salary etc.

Keep your powder dry!

[scooterscot]

All sensible but there are plenty of people who have money who will invest.

But I'm not touching the market with a 2000' barge pole. There are too many people harping for a return to the way things were last year at times of plenty whilst ignoring the reality of tomorrow. Once there's soup kitchens lining Whitehall and the chaos of Brexit is understood, I may dip my toes. But not before then. You'd make the mad hatter look sensible otherwise.

[Paralytic]

But I'm not touching the market with a 2000' barge pole. There are too many people harping for a return to the way things were last year at times of plenty whilst ignoring the reality of tomorrow. Once there's soup kitchens lining Whitehall and the chaos of Brexit is understood, I may dip my toes. But not before then. You'd make the mad hatter look sensible otherwise.

You said exactly the same about stocks and then bought Centrica.

[scooterscot]

I said that about stocks 2 years ago, and aced it. Now there's blood on the streets, I'm shopping - but only technical opportunities.