TrentVilla Posted February 22, 2008 Moderator Share Posted February 22, 2008 Guy on the local radio up here yesterday "This is a great time for those that can afford to buy property. House prices not going up as much as they were which means some good bargains. The fact that the mortgage lenders are making it harder for first timers means that there will be more people wanting to rent. Plus those that don't want to rent but live in it as a home will get more done on their own house which means more work for local tradesmen" - It's maybe something in the Sheffield water! I agree. Its a great time to invest in property and thats exactly what I'm doing. It certainly is not a great time to invest in property! Just because you put your opinion in bold doesn't make it any more factual its still your opinion. While most people worry about a possible crash others are making a killing. Link to comment Share on other sites More sharing options...
TrentVilla Posted February 22, 2008 Moderator Share Posted February 22, 2008 the housing market needs to come down. there is now a lack of first time buyers and this is causing at the bottom end a severe problem. Take my example brought my house for 50k at a time when I was 18k a year with a 44k mortgage, just around 2.5 times my salary, the preferred level. Of course I brought in 1999, just on the upcurve of Gringo's graph, so at the right time. Now my house is worth £130k but the same job would only pay 22-25k a year, so I woudl still be living with parents until i was on 30k or living with someone else on same salary. so as you can see there is a massive problem there, because of this I can not upgrade as the next step is simply unaffordable, so it makes you wonder how stretched some people are. Once the first time buyers go a lot of demand goes and then the market whilst not crashing, hopefully willl go to a more realisitic level. I agree with that. But the market at the bottom end is continuing to be supported by those in the higher salary brackets who can afford to buy to let. Which has seen a rise in the number of rented properties in each of the last 3 years which is in tern supported by those who cannot afford to buy. Link to comment Share on other sites More sharing options...
Gringo Posted February 22, 2008 Author Share Posted February 22, 2008 If you are going to invest, stay away from the new build "bargains" and stick with the solid 30+ year old homes, near main streets. But I think you might see better prices in 18 months time. It's true the rental market should remain strong, but there is a possibility of an april shock, if many large portfolio holders sell out to take advantage of the new CGT regime - though that too may lead to some bargains to be had, with some properties already kitted out for renting and maybe with long term sitting tennants. Link to comment Share on other sites More sharing options...
ianrobo1 Posted February 22, 2008 Share Posted February 22, 2008 but thats fine if the aspiration of this country is to own houses then there is a probnlem. We are not like the majority of the world where renting is a decent alternative, through Thatcher the whole society has been indoctirnated into thinking buying your house is the only way and that is not always going to be the case. the fact is if you have kids you wants a solid base and most housing now is unaffordable to those on the national average wage of around 25k I just wonder how those on less than 20k a year survive. Link to comment Share on other sites More sharing options...
TrentVilla Posted February 22, 2008 Moderator Share Posted February 22, 2008 If you are going to invest, stay away from the new build "bargains" and stick with the solid 30+ year old homes, near main streets. But I think you might see better prices in 18 months time. It's true the rental market should remain strong, but there is a possibility of an april shock, if many large portfolio holders sell out to take advantage of the new CGT regime - though that too may lead to some bargains to be had, with some properties already kitted out for renting and maybe with long term sitting tennants. Agreed Gringo. The new builds should be avoided at all costs especially city center ones. These properties are being thrown up as cheaply as possible by companies who have been committed to the build for a number of years even though they now know supply out strips demand thus they are building as cheap as possible. In a few years time these properties will be worth a fraction of there current market value. The smart money is in those properties 20/30 years old which tend to have larger floor plans and gardens and thus more attractive lets for families. There are certainly some bargins to be had out there at the moment. Although fee large portfolio holders are dropping properties its more small investors scared of a possible crash most larger investors are holding tight or buying. Link to comment Share on other sites More sharing options...
bob Posted February 22, 2008 Share Posted February 22, 2008 I agree. Its a great time to invest in property and thats exactly what I'm doing. It certainly is not a great time to invest in property! IMO Just because you put your opinion in bold doesn't make it any more factual its still your opinion. While most people worry about a possible crash others are making a killing. Sorry, is that better? Link to comment Share on other sites More sharing options...
TrentVilla Posted February 22, 2008 Moderator Share Posted February 22, 2008 but thats fine if the aspiration of this country is to own houses then there is a probnlem. We are not like the majority of the world where renting is a decent alternative, through Thatcher the whole society has been indoctirnated into thinking buying your house is the only way and that is not always going to be the case. the fact is if you have kids you wants a solid base and most housing now is unaffordable to those on the national average wage of around 25k I just wonder how those on less than 20k a year survive. I think though that aspiration remains largelly thanks to Thatcher there is a growing reality amongst people that renting is often the only viable option. I agree on the average salary its very very hard but while the gap to those at the top continues to grow then there will continue to be people willing and able to invest in property and as a direct result of their investment, customers. Link to comment Share on other sites More sharing options...
Gringo Posted February 22, 2008 Author Share Posted February 22, 2008 Recession? 13 signs it’s here Whether or not a full-scale recession is on the way is the question on everybody's lips in 2008. Saxo Bank's Head of Strategy, David Karsbøl, believes it is already upon us. Taking 13 key indicators, David Karsbøl, one of MoneyWeek's top 10 tipsters of 2007, explains why 2008 looks certain to bring a recession to the economy. A US-centric article, but when the US sneezes, yadda, yadda, yadda. Link to comment Share on other sites More sharing options...
gr10 Posted February 22, 2008 Share Posted February 22, 2008 Houses prices may slow but they will not crash. The doom and gloom merchants have been telling us they would crash for the last 5 years via the front page of The Daily Mail and yet they continue to rise. My point exactly. Link to comment Share on other sites More sharing options...
gr10 Posted February 22, 2008 Share Posted February 22, 2008 I have also just invested in property.. A gamble maybe.. I could die tomorrow, lifes too short! He who dares an all that. Link to comment Share on other sites More sharing options...
snowychap Posted February 22, 2008 Share Posted February 22, 2008 Houses prices may slow but they will not crash. The doom and gloom merchants have been telling us they would crash for the last 5 years via the front page of The Daily Mail and yet they continue to rise. My point exactly. I think that the doom and gloom merchants have been saying that the market is over inflated and that prices should be x% lower than they are and that sooner or later the market will find this equilibrium though how quickly and for how long is anyone's guess. I agree on the average salary its very very hard but while the gap to those at the top continues to grow then there will continue to be people willing and able to invest in property and as a direct result of their investment, customers. I don't think that the supply of houses drives the market. I'd like to make a point on the rental aspect. Because of the large number of buy to let mortgages, the nature of landlords has changed. No longer is the arena dominated by either large landlords who have invested their capital in land ownership or by social housing but, rather, by individuals who have borrowed for the sake of making an easy few bucks by renting the property out and having their tenant effectively pay off the mortgage. I can see the numbers of people in the last group reducing and that some of those in that group might well start to struggle having themselves been too overly aggressive in adding to their portfolio of properties (notice any similarity to anything?). In the local area, rental prices are falling due to a lack of demand (whether that is area specific or has more to do with younger people staying in the family home for longer for economic reasons, I don't know). When you marry that up to potentially large increases in mortgage repayments (especially if someone is coming to the end of a fixed term) then those who might have a couple of properties empty for a couple of months could look at cutting losses. I also know of a few people in business locally who have looked at getting rid of their 'investment' in order to raise money for their business in an unfavourable economic clime. Link to comment Share on other sites More sharing options...
ahamaad Posted February 22, 2008 Share Posted February 22, 2008 The crash will only affect you if you sell. If you can wait long enough, you'll eventually be able to sell at a profit. The only people negatively affected (ignoring the generally felt economic side effects in the broader market) will be those who figured either a) I'll buy now and flip it for a profit or I'll wait on selling it for another year and make even more... I take it you are from the States? I hear its pretty grim over there right now. Was watching a programme on it a week or so ago, and they used (interestingly) Cleveland, Ohio as an example, as it is allegedly the poorest state in the US. Apparantly reposessions there are at an all time high, and the blame is soley on mortgage lenders who sold mortgages to people who were clearly in no position to be able to afford repayments once the fixed term expired. Link to comment Share on other sites More sharing options...
ianrobo1 Posted February 22, 2008 Share Posted February 22, 2008 andOhio is pivotial in the democratic race ... Link to comment Share on other sites More sharing options...
leviramsey Posted February 23, 2008 VT Supporter Share Posted February 23, 2008 I take it you are from the States? I hear its pretty grim over there right now. Was watching a programme on it a week or so ago, and they used (interestingly) Cleveland, Ohio as an example, as it is allegedly the poorest state in the US. Apparantly reposessions there are at an all time high, and the blame is soley on mortgage lenders who sold mortgages to people who were clearly in no position to be able to afford repayments once the fixed term expired. Ohio isn't the poorest state in the US, it ranks 31st in median household income (I live in the 7th state, and just a couple of miles from #4, for the record). However, the city of Cleveland, thanks to decades of white flight, has held the title of highest poverty rate among major US cities for a number of years. I live in a rather subprime-heavy area... until a few months ago there were probably four or five storefront mortgage brokers in a three or four block radius of my house... Link to comment Share on other sites More sharing options...
shambles Posted February 23, 2008 Share Posted February 23, 2008 Very interesting that table Levi. I'd always wondered why Toyota opened its US production plant in Kentucky, and now I know! Link to comment Share on other sites More sharing options...
snowychap Posted February 25, 2008 Share Posted February 25, 2008 Looking at the property section in the local rag this week, I would say that about 20 per cent of properties were being advertised as 'NEW PRICE'. I can only infer from this that they have been reduced in price and a large number of these properties I recognize from being in the paper for the last two or three months, at least (one has been on the market for well over six months). There also appears to be a flood of properties coming on to the market as 'NEW INSTRUCTION'. Now this is not representative of anything in itself but, along with the fact that existing properties on the market in the area are not selling, it would not suggest the most bouyant and healthy of market places, surely? Round the corner from me an old victorian building was rennovated and made in to flats and at the same time a new building was built next to it (same plot) containing 'apartments'. There have been 'only three remaining' since well before Christmas. I can only deduce that i might not be the ideal time to purchase a property in the Malvern/South Worcestershire area at the moment - especially as a short term investment and when you factor in the expected Qinetiq redundancies and work force trimming (at least half of which are thought to be happening at the Malvern site). Link to comment Share on other sites More sharing options...
snowychap Posted February 25, 2008 Share Posted February 25, 2008 Bank mortgage lending 'subdued' Well, I'd be a bit confused and concerned if the lending was bullish. :winkold: Mortgage lending in January by the UK's biggest banks continued to be subdued. Figures from the British Bankers Association (BBA) show that its members approved 44,000 new mortgages for house purchase in January. Although that was up slightly from December's figures, it was still 31% lower than a year ago. However remortgaging, where people change lenders but do not move home, amounted to 49% of all new lending by the banks last month. Fixed rate deals, lasting two or three years, have been very popular in the past few years. Now that many of such deals are coming to an end, borrowers have to make a decision to stay with their current lender or find a better loan elsewhere. "Higher gross mortgage lending in January largely reflected very strong remortgaging activity, as borrowers sought out the best deals available," said the BBA's statistics director, David Dooks. .................... Link to comment Share on other sites More sharing options...
Gringo Posted February 26, 2008 Author Share Posted February 26, 2008 Putting a brave face on bigger discounts Persimmon sees higher incentives slashing margins LONDON (Reuters) - British house builder Persimmon Plc expects its plan to use incentives to lure prospective home buyers will slash margins by half to three-quarters of a percentage point, its chief executive said. Persimmon, Britain's biggest housebuilder by market value and number three in terms of homes built, also expects headline margins to come under pressure as it builds more affordable homes. The market remains difficult, although there have been some signs of improvement, Chief Executive Mike Farley told Reuters in an interview on Tuesday. "It's been a very cautious start to the year. All indicators we use have improved week on week. Before Christmas, (the number of) visitors to our site were down 20 percent but they are down only 13 percent now," he said. "Cancellations are also down from 30 percent last quarter to around 19 percent, which is more normal level...So we see certainty and confidence come back to the market but it'll take some time for us to catch up because we came into a new year with such a low forward order book." Earlier on Tuesday, Persimmon said that its order book for 2008 fell to 1.05 billion pounds from 1.3 billion a year ago and the timing of sales and completions would be more weighted to the second half. Link to comment Share on other sites More sharing options...
drat01 Posted February 26, 2008 Share Posted February 26, 2008 Hmmm interesting Gringo - they have a new housing development going up near here and have something I would be interested in - time for a bit of wheeling and dealing Link to comment Share on other sites More sharing options...
snowychap Posted February 26, 2008 Share Posted February 26, 2008 .... All indicators we use have improved week on week. Before Christmas, (the number of) visitors to our site were down 20 percent but they are down only 13 percent now .... I think that's very much taking the glass is half full notion to the extreme. :winkold: Link to comment Share on other sites More sharing options...
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