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AIBU?

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Original poster

To worry about falling house prices

297 replies

Ll81 · 11/02/2018 11:53

They say prices in central London have been falling for a while and this is rippling out to the rest of the country. Also lots of talk about raising interest rates and they could also be another downward pressure on prices along with lots of EU nationals leaving.

Anyone else worried that falling prices may mean many that have bought in the last few years maybe stuck in ne?

OP posts:
Cherrycokewinning · 13/02/2018 20:11

Buy to let sales have been falling for years

Cherrycokewinning · 13/02/2018 20:12

I know many people who have made millions on selling London property and moving out so not surprising it’s of interest for some raspberry

Snowonsnow · 13/02/2018 20:27

There are issues with staying in one house, families grow and shrink, jobs move, people change locations for schools. We have moved three times, each time we bought a new house it was because of a new life phase and had nothing to do with making money.

Blankscreen · 13/02/2018 20:38

I act for developers. One particular site in London selling at the moment of approx 30 flats.

However the first tranche were offered to overseas investors first who snapped them up. The second tranche has sold to uk buyers for approx.£100k more per flat. It really pisses me off.

I'd say of the 30 flats only 2 are being bought by owner occupiers. The rest will be let out with some poor sod paying someone elses mortgage.

Prices need to soften not crash and the market needs to be allowed to dictate this. Get rid of help to buy as that just inflates new build prices which are unaffordable.

mrsreynolds · 13/02/2018 20:51

My cousin was caught up in the 1990 crash
Got into financial trouble that lasted many many years
My sister went into NE after the 2008 crash and is now stuck where she is on an IO mortgage
I live in the east Midlands and prices are still going up here
Apparently my house is worth £250k
Ridiculous!

mrsreynolds · 13/02/2018 20:52

Yes i agree there needs to be a softening

Haffiana · 13/02/2018 20:52

However the first tranche were offered to overseas investors first who snapped them up. The second tranche has sold to uk buyers for approx.£100k more per flat. It really pisses me off.

I'd say of the 30 flats only 2 are being bought by owner occupiers. The rest will be let out with some poor sod paying someone elses mortgage.

I just don't understand this. Are you saying the developers were happy to sell to overseas investors for £100K less than the market rate? Why ever would they do this?? Are they not after all money-grabbing scum?

Re the owner occupiers - do you think that developers should be able to tell buyers what they can do with a property that they have bought and paid for? Maybe only 2 people actually wanted to live in their properties? Or are you saying that owner occupiers were somehow not allowed to buy these properties?

mrsreynolds · 13/02/2018 20:53

Post brexit forecasts are reduction of a third....

Whiterabbitears · 13/02/2018 21:06

If this is true then I'm glad they are coming down, the more house prices lower the better as far as I'm concerned. Myself and future generations might have a chance of buying a house if that's the case.

RaspberryCheese · 13/02/2018 21:11

I say again,why oh why are HM Government allowing us to become enslaved to overseas investors? This is totally wrong.

I think the whole apartment thing will go badly wrong. They will become ghettos in the sky.

Here in Manchester many are having their fingers burned because of the Grenfell cladding thing. At least one block of so called luxury apts plans to pass on the total costs to all the owners and in the mean time, has jacked up monthly service charge by over 100% to closer to £350 pm !! Those flats are now unsaleable. A court backed up the freeholders on appeal.
www.theguardian.com/uk-news/2018/jan/28/salford-block-residents-must-pay-fire-wardens-grenfell

People who buy flats own nothing..

goose1964 · 13/02/2018 21:15

Bristol also has The City . We've just been speaking to our bank re our mortgage due to DWP loan thingy. We bought 14 years ago for 215k it's LTV is now based on £320k. It's a 4 bed link detached with a small garden. It's at the bottom of the price range for a 4 be

PoppyCherry · 13/02/2018 21:16

Really, mrsreynolds???

confusednotcom2 · 13/02/2018 21:53

I know many people who have made millions on selling London property and moving out so not surprising it’s of interest for some raspberry

Really? I know lots of people who have done well but the only ones who have made millions are the people I know over 60.

I agree with a lot of points made by RaspberryCheese. The amount of re-development in Vauxhall is crazy!

scaryteacher · 13/02/2018 22:13

aRespectable dh;s UK income plus the rent still keeps him under the higher rate limit; take off allowances, the transfer of some of my allowances, the work done and the other costs one can write off, and the losses from previous years, and we wouldn't be in profit for years (which is fine, as we move back to the house next year).

For us, as long as we insure it, we can keep it empty as the mortgage is not dependent on any rental income, but I prefer that it is lived in as it is a period house.

aRespectableBureaudeChange · 14/02/2018 08:58

Scary : you misunderstand this isn't about you or another particular poster....(you sound rather like you are trying to convince yourself you are hunky dory, weirdly).

I posted to someone who said 'accidental landlords' will prop up any decline in prices because they will just hang on to their property rather than accept market value.

My link explained how at the very first stage of tax change 1 in 5 Btl will sell. That will impact on others as there will be forded sellers amongst those over the next few years. Link : 20% increase in landlord arrears.
www.bbc.co.uk/news/business-42989391

The market conditions will affect everyone as landlords

sothatdidntwork · 14/02/2018 09:20

It's also significant I think that the stamp duty surcharge is an upfront cost to accidental landlordism - the other taxes (income tax and cgt) are paid in arrears so in some ways are less 'obvious'.

I think an upfront tax may make people focus on it much more - particularly if as in many cases the cgt surcharge is a very substantial sum.

And I think (though not an expert!) that you may be able to recoup it if you sell off the original property within a certain period, so there is a strong incentive to do so by the deadline.

grannytomine · 14/02/2018 10:43

The market conditions will affect everyone as landlords You think, do you have a crystal ball?

FluffyWuffy100 · 14/02/2018 10:51

@RaspberryCheese that is so bad re the leasholders having to cover the fire wardens, and potentially the cladding charges.That 100% should be the freeholder cost and not able to pass on. Terrible.

scaryteacher · 14/02/2018 10:56

aRespectable I know dh won't be hit with higher rate, as I've done the maths, and I can't be, as the rent from the house is my only UK income!!! Hard to hit higher rate on half of £12k per annum.

We are accidental landlords as dh was posted abroad, and we don't want to sell the house. I need it again to live in next year.

Blankscreen · 14/02/2018 12:52

Thing is with the cladding someone somewhere signed off in the cladding as being safe.

If it is now proven to not be then they were negligent and should be liable for any losses that flow.

However is suspect in reality that a number of the properties will end up repossessed and the mortgage companies will then look to sue the surveyor or solicitor that acted on the purchase.

The other big thing about to hit the housing market is the expiration of the first swathe of interest only mortgages where people don't have the money to pay of their mortgage and will have to sell to clear the debt.

The housing market really has been artificially inflated for years.

aRespectableBureaudeChange · 14/02/2018 13:33

Scary: I'm really, really not talking about YOUR situation. The reasons it works for you and people in similar situation to you really is irrelevant. The bigger picture is happening all around you whether you feel it snapping at your heels yet or not.

My two links above: 1 in 5 btl leaving market and 20% in serious arrears will impact on all btl revaluations whether they sell or not (as the options to remortgage at favourable rates begin to dwindle).

Maybe you misunderstand btl for a landlord owning a property outright?

Buy to let borrowing is a gamble with lots of borrowed money on lots of market conditions staying in your favour. (ie tax reliefs etc).

aRespectableBureaudeChange · 14/02/2018 13:49

My point that you keep missing Scary is: accidental landlords will not be supporting this present/current market THIS time as it stutters. You supporting it in the past and why it worked for you is irrelevant - the climate has changed.

The risky behaviour of borrowing huge amounts of money against the family home on the assumption that tax and market conditions stay in one's favour has thankfully had the rug well and truly pulled. (I used "one" as I really don't want Scary to yet gain confuse market reaction to an individual's personal position).

I think the tax changes are fairly gentle to start with and will only increase to further discourage risky btl borrowing - I think it would be a fool that still expects the withdrawal of relief to stop at its current level and not to disappear completely.

The government said they want a level playing field for first time buyers against the btl borrowers - so I expect it to disappear completely in due course.

A lot of btl won't feel that further taxation is coming there way though, as they seem to be firmly head in the sand brigade and "who could 'a seen it comin, guv".

aRespectableBureaudeChange · 14/02/2018 13:51

their way (shudders)

grannytomine · 14/02/2018 14:05

Actually I think it is the other way round, it is the accidental landlords who will keep going, people who see it as a business and want to make big money are the ones who will drop out.

I have 2 houses I let, one is a house we inherited and the price we were offered was very low so the return we get on it is much higher than we would get anywhere else. I have a friend in a similar position.

I bought a second house when one of my children got divorced and couldn't get a mortgage. I had a 60% deposit. Child moved on and again much better return than anything else and youngest child wants it when they move back home after uni. Made sense for us to keep it.

Lots of people like me and my friend, as I said it is the people who see it as a business who will be put off by the changes.