If you had rented it out when you moved in with the relative, you would have had your mortgage paid for you for for over a decade and you would own half the house outright.
Property prices - what’s happening and predictions?
- Thread starter Proto
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If you had rented it out when you moved in with the relative, you would have had your mortgage paid for you for for over a decade and you would own half the house outright.
Chris S
Legendary Member
- Location
- Birmingham
It was a leasehold flat and the lease prohibited sub-letting.
nickyboy
Norven Mankey
- Location
- You want hills? We got hills
The really interesting question is when will interest rates move back to their historical norms and what will happen to house prices when they do. We have been living in a period of unprecedently low interest rates for 10 years. It will come to an end, but who knows when. We have got used to cheap mortgages and are living lives which allow us to pay our 2% mortgages. The issue is what happens when the mortgage rates increase to 8%.
The answer is that a lot of people will not be able to meet their mortgage obligations and lenders will be stuck with a load of properties they took as collateral. And these will have to be sold. That's when you will see the big correction
So to answer the OP's question: no major fluctuations in the near term (as there will not be a no deal Brexit), but the big one will come when interest rates move back to historical norms
The answer is that a lot of people will not be able to meet their mortgage obligations and lenders will be stuck with a load of properties they took as collateral. And these will have to be sold. That's when you will see the big correction
So to answer the OP's question: no major fluctuations in the near term (as there will not be a no deal Brexit), but the big one will come when interest rates move back to historical norms
lane
Veteran
Good point about interest rates. The other possibility is if Government policy turns significant against buy to let - for instance if Labor were elected on their current policy of making landlords sell at a discount to tenants. The elimination of buy to let demand in the market could reduce prices. Admittedly quite unlikely because most MPs are landlords.
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Chris S
Legendary Member
- Location
- Birmingham
I'm beginning to think that predicting the property market is a bit like predicting the weather. It's fairly accurate for the next five days but that's all.
As a BTL Landlord, this is a scenario we are all aware could happen.
However the small BTL landlords moving out of the sector will not create one single extra house nationally.
It will be the same number of houses, it may just give first time buyers a greater selection of houses to buy.
If it does force down prices, any drop would only be local and temporary, as the bottom line is there are simply more people than properties.
However if Brexit causes the UK economy growth to be noticeably lower than our neighbours on the mainland, then there will be a slow move towards the exit.
Many who have been here for decades will leave, those who would have come here will go to the neighbours instead, and most importantly the UK youth currently in education will leave for proper well paying jobs in Germany and France and many will never return.
That will then cause a fall in house prices as the number of people vs the number of properties required will reach equilibrium, and then a surplus in certain areas of the UK as the youth leave.
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lane
Veteran
If demand for property falls because of reduced buy to let, and at the same time supply increases due to sales by landlords, prices will fall. they will fall to the point where FTB can afford to purchase all the properties for sale. There will be the same number of houses and people living in houses but there will be more owner occupiers and fewer tenants. A desirable outcome in my opinion.
swee'pea99
Legendary Member
Reminds me of El Portillo reflecting ruefully that Thatcher's great property-owning revolution had rather gone tits up, with the great council sell-off briefly enriching one generation before the whole lot were gobbled up by BTL landlords (many, in passing, Tory MPs); the net result being an owner-occupier rate significantly lower than before she came to power.
The mistake Thatcher made with the great council house sell off was that for every one house sold, 1.2 houses should have been built within a fixed period of time (say 4 yrs, and no more can be sold until the building of the first phase is occupied)
Had she done that, then prices would have been stable and there would not now be a massive shortfall of homes.
The owner/occupier ratio would have increased rather than decreased. She would have left a legacy that many would have admired.
I think she was aware what would happen, but knew it would be largely Conservative voters who would be the BTL landlords, it would be Labour supporters who would be scrabbling for the shrinking pool of council owned property.
(Dame Shirley Porter, the Conservative leader of Westminster was certainly aware of what would happen and did her own mini version of ethnic cleansing, for which she would have been jailed if she had not been a personal friend of Thatchers and then skipped the country)
https://en.wikipedia.org/wiki/Homes_for_votes_scandal
johnblack
Über Member
- Location
- South Northamptonshire
I read an interesting article that suggests that in the shorter term there's a possibility we could be looking at negative rates from the Central Banks, not so much passed on to small investors (it's already happening for large investors). It said that significant increases aren't going to happen anytime soon.
Surprisingly in the UK there has been a significant rise in the amount of cash in circulation (56% rise in £50 notes in 5 years), whilst also a large increase in the amount of cashless transactions. It sort of suggests that there's cash hoarding going on, and people who still deposit are willing to live with the low yields for the convenience. Larger investors just but more assets instead.
Can i tell you a little story.Back in 1986 i was going through a divorce.We sold the house with the intentions of buying another,even though we had not seen one.The other half went to live with her parents and i with my mum.Once the cheque came through,she took it opened a new account and told me she wanted a divorce.£39,950 was sat waiting.In nine years we had made £9,000 profit.It then worked out i was not going to be given any of the money and her Solicitor wanted £108 per week in maintenance out of a wage of £148.We argued for fourteen months till a court decided who got what i got £9,000 but my fees were £3000 .In the meantime the old lady who had bought our house died.Her family sold the house and got £88,000 nice eh.fourteen months £39,950 jumping to £88,000.It is now worth over £ 295,000.
Milzy
Guru
We paid 185 only 2 years ago & it’s now valued at 202.
Our first house was through the labour recession which made only 2 grand in 10 years but that’s with about 4 grands worth of improvements in that time. Our interest rate is now low.
People moaning about Brexit, since we got away from Northern rock & a labour government we’ve never had so much money.
Our first house was through the labour recession which made only 2 grand in 10 years but that’s with about 4 grands worth of improvements in that time. Our interest rate is now low.
People moaning about Brexit, since we got away from Northern rock & a labour government we’ve never had so much money.
Accepted offer today on "best and final basis" £462,500
23 days from Internet live.
Clearly market in SW17 is active, but prices lower that peak of a couple of years ago.
NorthernDave
Never used Über Member
- Location
- The real Northern Powerhouse
Watching a bit of daytime TV, and it's interesting to compare the London of just a generation ago - as the backdrop featured in The Sweeney, Minder, etc - with now in property terms. Huge swathes of what is now prime real estate laid derelict, or at best looking decidedly run down and uncared for, with seemingly vast areas of open ground laid to waste.
How things change.
How things change.
It brings to mind the film A Long Good Friday, when Bob Hoskin's character Harold say's to his visiting Mafia chums about the derelict Isle Of Dogs. "See That.. It's a land of opportunity".
He wasn't wrong.
When we moved into offices in Deptford 16 years ago we were the new development. The offices are now the oldest development due to the sheer amount of demolition and rebuilding that has gone on. It's no exaggeration to say that 1000's of home units have been been built within less then a mile radius. It took less then 2 years to build and occupy 2 tower blocks next door. One of 24 stories, 1 of 10. There's another 2 going up the other side. 1 of 30 stories, 1 of 20.
The rate of building is very quick.
