chem1st Posted January 10, 2016 Share Posted January 10, 2016 UK house price to crash as global asset prices unravel From the Torygraph; http://www.telegraph.co.uk/finance/property/house-prices/12087971/UK-house-price-crash-looms-as-global-asset-prices-unravel.html UK households are simply drowning in about £40bn of debt according to the latest figures from the Office of Budget Responsibiliity. When budgeting is this finely balanced, it doesn’t take much to tip it over the edge. The UK economy is weighted towards financial services and a collapse in markets could cause a painful correction. Britain's housing market has defied gravity and logic for far too long. Government intervention by way of cheap help-to-buy loans allowed it one last hurrah, but the limits of state intervention are being brutally exposed in China, the UK is no different. BoE recently released report looking into most recent stress tests anticipating falls of 35% in UK house prices. General assumption being that leveraged buy to letters are screwed, but most homeowners should weather the storm. When it comes to landlords, there won't be much sympathy and it is quite possibly politically beneficial for them to be bankrupted - they can always rent from a non leveraged landlord. Lots of talk on various fora of them selling now before it is too late, but perhaps it already is... Link to comment Share on other sites More sharing options...
El Cid Posted January 10, 2016 Share Posted January 10, 2016 BoE recently released report looking into most recent stress tests anticipating falls of 35% in UK house prices. General assumption being that leveraged buy to letters are screwed, but most homeowners should weather the storm. When it comes to landlords, there won't be much sympathy and it is quite possibly politically beneficial for them to be bankrupted - they can always rent from a non leveraged landlord. Lots of talk on various fora of them selling now before it is too late, but perhaps it already is... Cameron was asked a similar question on the Andrew Marr show this morning. I was surprised how he answered it, he said Osborne had done his best to deflate the housing sector, and it was all down to the powers that the Bank of England have, not our fault gov; but not quite in those words Link to comment Share on other sites More sharing options...
Cyclone Posted January 10, 2016 Share Posted January 10, 2016 It's an interesting article, but there's a bit of hyperbole in it. It will certainly be interesting to watch though, will btl unravel as quickly as predicted, I'm not sure. The stamp duty increase will strangle future purchases, but not actually force anyone to sell. And will demand collapse as that article seems to suggest, I doubt it, we have a large unsatisfied demand for property, I think that's likely to buffer the market against too rapid a correction. ---------- Post added 10-01-2016 at 18:22 ---------- Cameron was asked a similar question on the Andrew Marr show this morning. I was surprised how he answered it, he said Osborne had done his best to deflate the housing sector, and it was all down to the powers that the Bank of England have, not our fault gov; but not quite in those words That sounds like a total lie tbh... How can they keep introducing new schemes to help ftb's and then say that they're trying to deflate the market... All they've done is take the opportunity to attack small landlords, whilst protecting their mates who own many houses. Link to comment Share on other sites More sharing options...
WiseOwl182 Posted January 10, 2016 Share Posted January 10, 2016 (edited) Yeah, yeah. People have been banging on about a house price crash since at least 2006. See housepricecrash.co.uk. Full of people putting their lives on hold for years and years, hoping for a crash to cash in on the misery of others, rallied along by Jonathan Davis' "predictions". It hasn't happened and it won't. Meanwhile, everyone else has got on with their lives and enjoyed increasing equity as a bonus. Don't forget that although BTL will soon pay double stamp duty, the government cut stamp duty significantly around many price points for all but the most expensive properties back in the 2014 budget. Stamp duty on a 300k property (typical London flat BTL fare) was previously 3%, so £9k. After that budget it is now 2% over 125k to 250k plus 5% on the remaining 50k, so £5k in total. Double that and you're near enough back to where we were, for btl. Edited January 10, 2016 by WiseOwl182 Link to comment Share on other sites More sharing options...
Anna B Posted January 10, 2016 Share Posted January 10, 2016 If buy to let collapses it's the tenants I feel sorry for. A lot of them are going to find themselves homeless through no fault of their own. Link to comment Share on other sites More sharing options...
mafya Posted January 10, 2016 Share Posted January 10, 2016 If buy to let collapses it's the tenants I feel sorry for. A lot of them are going to find themselves homeless through no fault of their own. Clause 24 is being challenged via judicial review regarding the mortgage interest relief= https://www.crowdjustice.co.uk/case/clause24/ I have one buy to let, you are right that it's the tenants you will feel sorry for as I can sell up and pay off the btl mortgage and still have a healthy sum left whereas the poor tenant will have to go to the council homeless section... Link to comment Share on other sites More sharing options...
Penistone999 Posted January 11, 2016 Share Posted January 11, 2016 UK house price to crash as global asset prices unravel From the Torygraph; http://www.telegraph.co.uk/finance/property/house-prices/12087971/UK-house-price-crash-looms-as-global-asset-prices-unravel.html BoE recently released report looking into most recent stress tests anticipating falls of 35% in UK house prices. General assumption being that leveraged buy to letters are screwed, but most homeowners should weather the storm. When it comes to landlords, there won't be much sympathy and it is quite possibly politically beneficial for them to be bankrupted - they can always rent from a non leveraged landlord. Lots of talk on various fora of them selling now before it is too late, but perhaps it already is... Quite the opposite Chem . Im currently in the process of buying two more properties . One three bed semi in Crookes that will be turned into a sutdent HMO , and a three bed detatched that will be split into two flats . There will always be people who want private rentals ,and there will always be students , so i have no worries what so ever. Link to comment Share on other sites More sharing options...
Vague_Boy Posted January 11, 2016 Share Posted January 11, 2016 hoping for a crash to cash in on the misery of others Most people just want a chance to be able to buy a house at a reasonable price. Not "cheap" but one where they don't have to sigh up for decades of penury. Average house price rises to 8.8 times local salary in England and Wales [The Guardian, 6 August 2015] The average between 1983 and 1999 was 3.64 x income [LINK] Link to comment Share on other sites More sharing options...
Cyclone Posted January 11, 2016 Share Posted January 11, 2016 Meanwhile, everyone else has got on with their lives and enjoyed increasing equity as a bonus. Very, very few people actually gain any benefit from increasing house prices. Anyone who might move up the housing ladder gains nothing (and in fact is constantly losing ground). Link to comment Share on other sites More sharing options...
Orzel Posted January 11, 2016 Share Posted January 11, 2016 Very, very few people actually gain any benefit from increasing house prices. Anyone who might move up the housing ladder gains nothing (and in fact is constantly losing ground). That is 100% correct. No home owner gains anything on increase of their house price. Those cause rent prices to rise so poorest are screwed. You need more money to upgrade so property ladder becomes steeper. And first time buyers see first step of that ladder become higher and higher. Major crash would ruin some peoples lives but would be beneficial for most in long run. Link to comment Share on other sites More sharing options...
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