Is the UK property market set for a downturn

  TopCat® 00:42 01 Oct 2007
Locked

anytime soon? I think it is and there's going to be many more worried people facing increased repayments than at present. Not a happy subject to start the week with, but it is something that's got to be faced up to eventually, in my opinion.

To those most concerned or interested I recommend listening to this radio programme while it is still available. It runs for twenty-eight minutes but really focuses the mind. TC. click here

  robgf 01:17 01 Oct 2007

I suspect the market has already slowed. Houses were changing hands very quickly in our area, but I notice that over the last few months, houses are taking a lot longer to sell and there seems to be a surplus.
These are mainly homes in the lower end, around the 150 200 thousand mark.

Interestingly, there are a lot of cars being put up for sale around the village, with for sale notices stuck to the windows. This happened at the start of the last big recession, as people were struggling to meet repayements.

  GANDALF <|:-)> 08:26 01 Oct 2007

At the beginning of the year a friend of mine bought 6 flats in Birmingham, off plan, for £175k each. They are now selling for £140k (offers) and he cannot get anyone to rent them although he has dropped the rent by 25%. According to her there is a similar tale in Liverpool, Manchester etc. with over supply of BTL flats. Houses around me in the Cotswolds can be bought for 10% less than asking and if you own one in one of the recently flooded areas you can forget selling it. Although houses have not gone down in advertised price you can get a hefty discount especially if you are ready to move.

Flats in large cities are going to be a real problem in 2008 and if I had bought loads of BTL flats I would be a very worried person indeed.

G

  DrScott 09:02 01 Oct 2007

I was looking for a new house with my wife we were astonished by the number of houses that had been on the market for nearly year, and by how much vendors had dropped their asking price. One had dropped theirs by £100,000 - and was still overvalued in my opinion!

The market is settling. London houses still go for stupid money, but at last people and estate agents are starting to get a little more realistic about the value of homes.

  newman35 09:18 01 Oct 2007

Anyone ready to buy - do it now.
As sure as night follows day, prices will start to rise again in a few weeks when this latest 'scare' in the finance markets recedes. There is still a shortage of houses in the UK and until this is rectified (as if!!) then houses will always be needed and thus priced accordingly.

  GANDALF <|:-)> 09:59 01 Oct 2007

'There is still a shortage of houses in the UK'..rubbish, there is a shortage of AFFORDABLE houses but no shortage of houses as such.

'when this latest 'scare' in the finance markets recedes'..prices of flats in large cities have been falling steadily throughout the year. It had nothing to do with recent financial events. Houses around me have been slow to sell for a year or more and 12 months to sell is not unusual. You have been able to knock off 10% for over a year now.

G

  newman35 11:05 01 Oct 2007

"It had nothing to do with recent financial events."
To paraphrase someone (I seem to forget who!!) - 'eyes raise'.

  TopCat® 11:19 01 Oct 2007

Should have checked it after posting. click here and scroll down to "File on Four"

Gandalf and others will hear about the rental and selling difficulties of flats, etc. TC.

  spuds 11:26 01 Oct 2007

Like Gandalf, I have a friend in property development, with a number of BTL's in his portfolio. Costs of repairs have increased, but he as had need to reduce rent's to new tenants, and keep full occupancy of his properties.

Most of his properties are/were obtained via auctions and 'reduced price' instant sales. He at the moment is holding fast, before making further commitments.

Most of his tenant's were once home owners, but the burden of home ownership became to much for them, so it was a situation of sell and rent back in some cases.

  natdoor 11:51 01 Oct 2007

It is highly probable that there will a correction in the housing market. Hopefully it will not be too severe. However, the expectations of some buy to let investors are totally unrealistic. To expect to take possession of an appreciating asset which someone else pays for in the form of rent at a level to cover all outgoings or even to provide a profit is clearly unsustainable. Many who invested some time ago may have secured huge gains and can afford to sell out if prices fall. Those who entered the market more recently may suffer severely.


Clearly some form of regulation is required, perhaps limiting the mortgage permitted on a BTL at, say, 50% of the price paid for the property. Or maybe some enhanced tenants rights, as used to exist with sitting tenants, would curb the gambling instinct of those who see BTL as an easy way of getting something for nothing.

  natdoor 11:51 01 Oct 2007

It is highly probable that there will a correction in the housing market. Hopefully it will not be too severe. However, the expectations of some buy to let investors are totally unrealistic. To expect to take possession of an appreciating asset which someone else pays for in the form of rent at a level to cover all outgoings or even to provide a profit is clearly unsustainable. Many who invested some time ago may have secured huge gains and can afford to sell out if prices fall. Those who entered the market more recently may suffer severely.


Clearly some form of regulation is required, perhaps limiting the mortgage permitted on a BTL at, say, 50% of the price paid for the property. Or maybe some enhanced tenants rights, as used to exist with sitting tenants, would curb the gambling instinct of those who see BTL as an easy way of getting something for nothing.

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