Housing market

[matt j]

It does indeed depend upon when it was done. Regs changed in the 80s. Prior to that it could be like my house, ie floorboards up and plaster down with only fresh air between. That's fine in one dwelling but no good otherwise.
I always found flats to be expensive relative to terraced housing of the same size.

I've got some sort of semi autistic/OCD issue with noise hence I'm limiting my search to properties built in certain ways- like semis with the hall and stairway on the adjoining side and terraces where one side is the ginnel and the other side is a stair/hall way. Flats are OK if they're like my current one, but even this can be annoying, especially now 18 kids have moved into one of the other flats.

 

[stevec67]

I've got some sort of semi autistic/OCD issue with noise hence I'm limiting my search to properties built in certain ways- like semis with the hall and stairway on the adjoining side and terraces where one side is the ginnel and the other side is a stair/hall way. Flats are OK if they're like my current one, but even this can be annoying, especially now 18 kids have moved into one of the other flats.

I used to live in a small modern semi where the 2 sets of stairs can up the adjoining wall. That was quiet because the lounges and main bedrooms were separated.

 

[spxy]

I've got some sort of semi autistic/OCD issue with noise hence I'm limiting my search to properties built in certain ways- like semis with the hall and stairway on the adjoining side and terraces where one side is the ginnel and the other side is a stair/hall way. Flats are OK if they're like my current one, but even this can be annoying, especially now 18 kids have moved into one of the other flats.

Same here , I think we are just normal and everyone else is in denial. For what its worth in Scotland the building regs for sound proofing are considerably higher than in England and Wales. That mean a cheep Barrett type house in Scotland needs to meet a higher level of sound proofing than a luxury apartment in London...

 

[Mike Reed]

I used to live in a small modern semi where the 2 sets of stairs can up the adjoining wall.

I remember my friend in Thanet hunting for a semi where the lounges were separated (as above); he couldn't afford detached 25 years ago. I helped him and we discovered the rarity in this building form (halls/stairs back to back). This wasn't just more modern properties either, though older (thirties/Edwardian/Victorian) buildings were more likely to have this feature. His concern was hifi related, naturally.

My first house (my only semi) was back to back lounges but being a thirties prop'y prob. had thick party wall. Never any complaints but the lovely neighbours may have been too nice !

 

[Ponty]

This is probably an example of why people are so keen to kick private landlords.

What you’re saying is the income is ‘fine’ (means ‘good’) but you want more even though I suspect it’s still better than the bank. In summary, because it’s not making enough you would prefer to sell but you won’t because you don’t want to pay what’s due in tax on the increased value of the property.

Good that you understand all aspects and facets of the market. Blended return is between 2 and 3% (which I’m then taxed on) depending on costs for the year. Oh, and that’s unleveraged (having been taxed at 40/45%). The numbers would make little sense if money were borrowed (particularly now). They also come with a load of hassle and risk of bad tenants etc. Yet I’m quite happy because that’s only one piece of the puzzle. Sure, they could drop 30% in capital value but that’s not going to cause a big issue, the rental demand and income will still be there (a bit like holding dividend paying shares long term which rise and fall in value). I can also undercut others in a sticky market to secure a good tenant. I might live in one of them one day, so in my case it’s simply not worth crystallising CGT and incurring transaction costs of repurchasing something else at a later date. However, for many, the additional CGT over other business assets absolutely puts them off disposal and they’ll just leave the income ticking in. Rarely are things as straightforward as they appear.

 

[matt j]

I helped him and we discovered the rarity in this building form (halls/stairs back to back). This wasn't just more modern properties either, though older (thirties/Edwardian/Victorian) buildings were more likely to have this feature.

I grew up in such a Victorian semi, all the living sides were separated, the only shared wall was the small bathroom, all the bedrooms and downstairs rooms were on opposite sides. Great house, cellar and proper 2nd floor attic etc. Cost my mum and dad 7k...

 

[Brian]

Good that you understand all aspects and facets of the market. Blended return is between 2 and 3% (which I’m then taxed on) depending on costs for the year. Oh, and that’s unleveraged (having been taxed at 40/45%). The numbers would make little sense if money were borrowed (particularly now). They also come with a load of hassle and risk of bad tenants etc. Yet I’m quite happy because that’s only one piece of the puzzle. Sure, they could drop 30% in capital value but that’s not going to cause a big issue, the rental demand and income will still be there (a bit like holding dividend paying shares long term which rise and fall in value). I can also undercut others in a sticky market to secure a good tenant. I might live in one of them one day, so in my case it’s simply not worth crystallising CGT and incurring transaction costs of repurchasing something else at a later date. However, for many, the additional CGT over other business assets absolutely puts them off disposal and they’ll just leave the income ticking in. Rarely are things as straightforward as they appear.

Your assumption I don’t understand all aspects of this is incorrect.

 

[hifinutt]

Not £££ obviously, but what % are you calling a ‘dismal return’? Current offerings from the bank (robbers) is dismal, if you beat that then what’s the complaint? I see info from Rightmove suggesting many parts of the country see 6-7% return on BTL. In current times that isn’t at all dismal.

managed 3.50 a day profit last year ... what sort of yield is that ?

 

[hifinutt]

Same here , I think we are just normal and everyone else is in denial. For what its worth in Scotland the building regs for sound proofing are considerably higher than in England and Wales. That mean a cheep Barrett type house in Scotland needs to meet a higher level of sound proofing than a luxury apartment in London...

bought a Barretts house 4 years ago , i recall the kitchen wall moved and i had to take the plasterboard off the wall to screw the floor plates to the floor !!! also the floor was made from plywood which flexed badly where the central heating had been installed

 

[hifinutt]

things looking very bad for mortgages and FTB etc now

If mortgage rates rise to 6%—as implied by markets’ current expectations for Bank Rate—the average household refinancing a 2yr fixed rate mortgage in the first half of 2023 will see *monthly* repayments jump to £1,490, from £863. Many simply won’t be able to afford this (1/2)

Experts said a rise in the cost of long-term borrowing meant the current cost to mortgage lenders of offering new deals was now more expensive. There are also concerns that would-be borrowers will rush to secure mortgages at favourable rates before interest rates rise and if they do jump, homeowners will not be able to afford higher repayments.

https://www.bbc.co.uk/news/business-63041679

 

[clivem2]

Our daughter and her partner are trying to buy currently they have a 40% deposti, this should help in this mad market. We're seeing ex-rentals come on the market locally but they have been tatty and too highly-priced given the work needed to fix them up. I wonder whether a couple of houses they very recently bid on will complete....either mortgage issues or lowered valuations may bite the people who won the bidding war.

It should become a good time to buy but who will be selling? The market will be moribund.

 

[AnilS]

Our daughter and her partner are trying to buy currently they have a 40% deposti, this should help in this mad market. We're seeing ex-rentals come on the market locally but they have been tatty and too highly-priced given the work needed to fix them up. I wonder whether a couple of houses they very recently bid on will complete....either mortgage issues or lowered valuations may bite the people who won the bidding war.

It should become a good time to buy but who will be selling? The market will be moribund.

40% is a very healthy deposit indeed!

 

[andyoz]

things looking very bad for mortgages and FTB etc now

If mortgage rates rise to 6%—as implied by markets’ current expectations for Bank Rate—the average household refinancing a 2yr fixed rate mortgage in the first half of 2023 will see *monthly* repayments jump to £1,490, from £863. Many simply won’t be able to afford this (1/2)

Experts said a rise in the cost of long-term borrowing meant the current cost to mortgage lenders of offering new deals was now more expensive. There are also concerns that would-be borrowers will rush to secure mortgages at favourable rates before interest rates rise and if they do jump, homeowners will not be able to afford higher repayments.

https://www.bbc.co.uk/news/business-63041679

The mantra that anyone buying a house should allow for 6% interest rates (historical average) was pretty much derided the last few year and guess what...here we are...and alot of people are surprised.

House buyers these last few years took their eyes off the ball, that being the Principal mortgage amount they were signing up too....that's the number that matters and the 'monthly' at the time of signing is secondary.
A £500k bank charge over you head is still £500k no matter whether the interest rate is 1% or 10%. The banks have you by the short and curlys with that one single signature.

One day people will learn not to trust a word that comes out of Government Central Bankers mouths and to do their own research...

You can't buy a house based on blue skies forever thinking which is what's been happening. It was easy for the banks to look like they were your mates with ZIRP but the rubber hits the road now and Banks will be the winners here yet again...rinse and repeat.

 

[mandryka]

I wonder whether a couple of houses they very recently bid on will complete....either mortgage issues or lowered valuations may bite the people who won the bidding war.

Send a letter directly to the owners, not the agent, saying that you were disappointed that you didn't submit a winning bid, and if their deal falls through, you are ready and able to respond quickly. Include your own contact details.

 

[mandryka]

It should become a good time to buy but who will be selling?

Landlords and owner occupiers who can't afford their mortgage deals. But the landlords won't sell for a while because most of them will try to get vacant possession before going to market, which takes time. And the owner occupiers will also try to hang on, and anyway they need to find a new place to live. Expect to see a gradual increase in the number of properties for sale in 2023.

At the same time, expect to see an increased demand and reduced supply of private rentals, with a resulting augmentation in rents. That's something to factor in when thinking about how much to pay for a purchase.

 

[andyoz]

Landlords and owner occupiers who can't afford their mortgage deals. But the landlords won't sell for a while because most of them will try to get vacant possession before going to market, which takes time. And the owner occupiers will also try to hang on, and anyway they need to find a new place to live. Expect to see a gradual increase in the number of properties for sale in 2023.

Exactly this...things don't unravel overnight with property unlike stocks etc..

 

[Ponty]

Our daughter and her partner are trying to buy currently they have a 40% deposti, this should help in this mad market. We're seeing ex-rentals come on the market locally but they have been tatty and too highly-priced given the work needed to fix them up. I wonder whether a couple of houses they very recently bid on will complete....either mortgage issues or lowered valuations may bite the people who won the bidding war.

If they can, let the ‘mad market’ cool off IMHO. There will be landlords remortgaging next year who’ll be in deep trouble. Their 40% deposit could become 60%, or they may be able to buy a better property than now. Of course they may have challenges obtaining a (more expensive) mortgage but long term I’d prefer to owe £1000 at a 5% IR than £1500 at 2%.

 

[clivem2]

If they can, let the ‘mad market’ cool off IMHO. There will be landlords remortgaging next year who’ll be in deep trouble. Their 40% deposit could become 60%, or they may be able to buy a better property than now. Of course they may have challenges obtaining a (more expensive) mortgage but long term I’d prefer to owe £1000 at a 5% IR than £1500 at 2%.

Agreed, we're telling them not to rush into buying, the picture will develop a lot over the coming cold and dark months meanwhile, they are living rent-free with us. If something good comes up now then great but it needs to be a decent deal. Some of the crazy prices being asked for around here (and achieved) should revert but forecasting the market is a difficult game.

 

[andyoz]

Agreed, we're telling them not to rush into buying, the picture will develop a lot over the coming cold and dark months meanwhile, they are living rent-free with us. If something good comes up now then great but it needs to be a decent deal. Some of the crazy prices being asked for around here (and achieved) should revert but forecasting the market is a difficult game.

I think forecasting the market got a lot easier this last week...

 

[Ponty]

Agreed, we're telling them not to rush into buying, the picture will develop a lot over the coming cold and dark months meanwhile, they are living rent-free with us. If something good comes up now then great but it needs to be a decent deal. Some of the crazy prices being asked for around here (and achieved) should revert but forecasting the market is a difficult game.

Yes, it is difficult, especially as I’m sure they just want to get on with their lives. Buying a home is such an emotional thing but often too random.