Singing Pig

well, I don't know about fred, but Savills June 2008 residential market report is  predicting house price falls of between 12% and 25% from now until 2009, depending on whether or not the lenders start lending again.

Worth checking their website and down loding the report.

Chas

I think that if its anything like what has happened in the US then any falls are likely to vary - depending on property type and location.

In some US locations such as Las Vegas and parts of Florida prices have already fallen by 40% with another 20% predicted, however in other areas they are pretty stable.

It seems that those areas which showed the most dramatic growth have dropped most.

Robert
 

the uk has always had a huge  variety of "mini-housing-markets"  and will continue to do so  -  regional variations in wages, housing stock, rental market, historical sales trends, central and local government policies  etc will all have an effect in varying degrees in different parts o the country

there never has been a "uk property market trend"   - so its no good trying to predict a national growth/decline figure .......

There is an article on this exact subjetct here

http://news.bbc.co.uk/1/hi/business/7437568.stm 

Robert 

Hi,

Im a property consultant and i can find amazing properties to add to your portfolio, i source properties from a number of places and are getting genuine 25% to 30% discounts with rent back offers......

It's taken ages but I've finally read all of this thread. Very very educational. I'm a newbie in my mid-20s who hasn't done any BMV deals yet but having been reading all about property, and more recently BMV, for approx 2 years now. It's clear to me that BMV deals are the only sustainable way of investing in property in a sophisticated manner. One of the most important things I've learnt about on this thread is the risk of not being able to remortgage at the same LTV, thereby necessitating a cash-injection. I pity those who are highly geared and need to remortgage at the current time.

I've been running some spreadsheet calculations on typical rents and house prices in my home area of Bristol (for my own education/practice etc) and I find that I'd need to buy at approaching 40% BMV (!) to meet 130% of the repayment at 7% SVR. From what I read, it's better to calculate it on the SVR as it's better to be safe than sorry if I wasn't able to remortgage in the future. Shucks, even the fixed rate is approx 6.6% plus fees at the moment! Do people agree that it is only really practical to buy approx 40%BMV at the moment? It would seem to be prudent to do current calculations based on 80% LTV, as I gather BTL mortgages are going that way.

I was going to get my marketing set up then go full guns blazing into the BMV market but this thread has probably put the stoppers on my plans for the moment. Am I correct to say that there are no more one day BTL remortgage deals available anymore. I could tie my capital up in a deal for 6 months before remortgaging, but it would have to be a great deal to justify it, right?!

Perhaps I'm better off waiting until interest rates/fees on these mortgages drop and one day remortgages are available?

Your expert thoughts, please.

Dont be too scared with what you have read here

On the face oif it..to an amateur 9 - 5er type, now is the worst possible time to get into property. They look at things in a very much one dimensional way. They'll pile back  around 18 months after the next surge......they follow the crowd...that makes them feel safe

The time to get in is anytime..But regarding now?

Yes.... so long as you are buying low,low, low each and every single time !!!

The professionals in any commodity business clean up in the downturns. The beautyof this busines is that to act like a pro you dont have to go to uni for 3years, then train on the job for another 5 years or so...the barriers to entry arent as time consuming.

The main barrier to entry into this business is inside peoples' heads! 

The 'fly by nights' and chickens are leaving in droves...which is great for those who know better..the phones are ringing harder and offers are going to be extremely, embarrassingly mean ones! Remember - WE don't have to buy....motivated sellers HAVE to sell! Once they leave (the fly by nights)- psychologically they will find it hard to get back in 'on track' they are acting in an amateurish way. by all means, change tack to suit conditions...but don't run away totally.

A great friend of mine who has been in this business almost 40 years - and seen it all ..at least three times..is chomping at the bit now...... as he says..'it's time to fill your boots' He says if your offer doesn't make you squirm with embarrassment - then you've offered too much! Wise words. He's just paid 41k fro a property marketed at 90k!!!. Its costing him 2k a year in interest (paid cash) if he, as he says he might do, just locks the door and walks away for 10 years!

Cherry picking a few jackpot deals from lots of leads is the order of the day!

I just had an offer accepted on a property marketed at 130k for 75k....its a vacant possession opportunity and  Its immaculate, needs no work at all, and will rent all day long at £575 pcm. They wanted 90k at worst...but I held out for 3 weeks and just forgot about it..told them my offer stood for 28 days...they phoned me back this week.

That was from a 1p leaflet. For me..now is the time to 'up' my marketing significantly..i will not necessarily buy more houses than if things hadn't changed...but I will get more enquiries...and will cherry pick, play the numbers game, make embarrassingly low offers..and ge tthe order very juicy deal the 80% BMV opportunities I land..i will pass on to those who aren't as demanding..but they wont be for me

Now that beats going to work everyday!

Thank you for your reply Rialto. I get the impression that people look to you as the "big expert" on this topic. I can see that your latest £75000 42%BMV deal stacks well. I had figured that 40%BMV should be what constitutes a solid investment in the current climate. I take it that you do not take out the full equity when you remortgage. Assuming the interest rates stay quite similar around 6.7%, I guestimate that you could remortgage at 85% of approx £94000 to make it a NMD deal with good cashflow. Correct?

It's good to see an example of some current figures that stack, from an authority on the topic. Much of the examples I have read about NMD work on the 18-20% model, which is out of date, as discussed. The example re-affirms my understanding of the sums.

Your words of encouragement are welcome. Perhaps I was getting too negative a perspective. After all, I could afford to tie up some capital in the deposit and purchase fees for 6 months, then remortgage. I guess we've got little choice in the current mortgage market?