K
Kathy
Guest
It's not only the obsession with prices, Venusian, it's the British obsession of house ownership.
The most stable economies may be those that are not obsessed by everyone owning their own home.
The most stable economies may be those that are not obsessed by everyone owning their own home.
I'm not sure that has anything to do with it.
There are plenty of European countries with higher house ownership than Britain.
For example, Greece, Italy, Spain and Norway have a significantly higher proportion of homeowners than we do. We're about on a par with Belgium at about 70%.
There are plenty of European countries with higher house ownership than Britain.
For example, Greece, Italy, Spain and Norway have a significantly higher proportion of homeowners than we do. We're about on a par with Belgium at about 70%.
K
Kathy
Guest
Germany does not have the obsession with house ownership as we do in the UK and it may not be a coincidence that their economy is more stable than ours.
Harbinger
At the Start
- Joined
- Mar 22, 2004
- Messages
- 11,282
The German economy was in a pretty bad state a few years back and has only really picked up in the last couple of years.
As for using Germany as an example of economic stability, I can only imagine what you'd think if Gordon Brown raised VAT by 3% as the German government did earlier this year.
As for using Germany as an example of economic stability, I can only imagine what you'd think if Gordon Brown raised VAT by 3% as the German government did earlier this year.
K
Kathy
Guest
The Gernan economy just doesn't seem to rely so much on everyone owning their own house, Gareth. Friends of mine in Germany have never understood the obsession that there appears to be in the UK borrowing thousands of pounds to own a house. There seems to be much more renting - especially where she lives Nr. Frankfurt.
Bar the Bull
At the Start
Britain has one of the best economies in the world. Using Germany as an example of something to aim for is perverse.
You lads do not realise how lucky you are.
You lads do not realise how lucky you are.
K
Kathy
Guest
UK agent hit by cancelled home sales
By Jim Pickard
Courtesy of the Financial Times
Published: November 16 2007 22:02 | Last updated: November 16 2007 22:02
Britain’s biggest chain of estate agents, Countrywide, is to close down branches after being hit by a spate of cancelled sales amid the gloomiest outlook for the housing market since the early 1990s.
Harry Hill, chairman, told the Financial Times on Friday that completed sales in the first half of November were running at about half the rate seen in the summer.
“Mr Average is just seeing this maelstrom of news going around his head, most of which isn’t very good,” he said. “Even if he goes to buy a house, he goes to the pub and half his mates say he must be mental. So he rings up and changes his mind.”
Mr Hill said the downturn had been prompted by the credit crunch and was unlikely to ease until conditions stabilised or interest rates came down.
Countrywide employs more than 10,000 people and owns brands such as John D Wood, Bairstow Eve, Abbotts, Gascoigne Pees and the Bradford & Bingley estate agencies.
It has not decided how many branches to axe but said it would be “irresponsible not to make some cuts” given the poor medium-term outlook.
The group, taken private for £1bn in May, has reported falling sales and turnover for the third quarter and said it expected a further decline in transactions which would hit results for the first half of next year.
By Jim Pickard
Courtesy of the Financial Times
Published: November 16 2007 22:02 | Last updated: November 16 2007 22:02
Britain’s biggest chain of estate agents, Countrywide, is to close down branches after being hit by a spate of cancelled sales amid the gloomiest outlook for the housing market since the early 1990s.
Harry Hill, chairman, told the Financial Times on Friday that completed sales in the first half of November were running at about half the rate seen in the summer.
“Mr Average is just seeing this maelstrom of news going around his head, most of which isn’t very good,” he said. “Even if he goes to buy a house, he goes to the pub and half his mates say he must be mental. So he rings up and changes his mind.”
Mr Hill said the downturn had been prompted by the credit crunch and was unlikely to ease until conditions stabilised or interest rates came down.
Countrywide employs more than 10,000 people and owns brands such as John D Wood, Bairstow Eve, Abbotts, Gascoigne Pees and the Bradford & Bingley estate agencies.
It has not decided how many branches to axe but said it would be “irresponsible not to make some cuts” given the poor medium-term outlook.
The group, taken private for £1bn in May, has reported falling sales and turnover for the third quarter and said it expected a further decline in transactions which would hit results for the first half of next year.
K
Kathy
Guest
from The Evening Standard
£28,000 knocked off house prices by banks crisis
Mira Bar-Hillel, Property Correspondent
17.12.07
Stores suffer 'black weekend' as sales gloom deepens
Property asking prices in London plunged by an average of £28,000 in the wake of the Northern Rock crisis, new figures show.
The average price slumped 6.8 per cent, from £412,731 to £384,632, between last month and this month.
The figures, compiled by estate agency website Rightmove, show prices are still higher than a year ago, but only by 8.3 per cent.
The monthly fall has affected all 32 London boroughs and provides the starkest evidence yet that the credit crunch and consumer downturn is hurting the property market. Experts now predict the borrowing squeeze will cause London prices to fall by three per cent next year and in 2009.
Analyst Howard Archer, of Global Insight, said: "We have already seen a significant drop in mortgage lending and in buyers approaching estate agents. The average time it takes to sell a house is the longest for two years, and the number of mortgages offered in October was the lowest for almost three years. Sellers have had to accept offers well below the asking prices, so it is hardly surprising that they have finally seen the need to lower the asking prices."
Although the price fall is dramatic, Rightmove said it had been exaggerated by the timing of the last phase of the introduction of home information packs.
It says a third of the drop was due to a greater number of smaller properties being put on the market last month, to get ahead of the introduction of home packs for all houses, which took place on Friday.
Miles Shipside of Rightmove said: "We calculate that the one-off surge in the least expensive properties was responsible for 2.3 percentage points of the fall. However, even allowing for that, the price fall is by far the biggest we have seen at this traditionally quiet time of the year.
"It is normal that only fairly desperate sellers are active just before Christmas and prices are always reduced accordingly. But the size of the reductions this December is further confirmation of sellers having to readjust prices downwards."
The biggest percentage falls were in Hackney (10.2 per cent), Tower Hamlets (9.6 per cent), and Southwark (8.3 per cent).
In cash terms, the largest drops were in Kensington and Chelsea (about £80,000), Westminster (£50,000), Hackney (£48,000) and Islington (£45,000).
============================================
£28,000 knocked off house prices by banks crisis
Mira Bar-Hillel, Property Correspondent
17.12.07
Stores suffer 'black weekend' as sales gloom deepens
Property asking prices in London plunged by an average of £28,000 in the wake of the Northern Rock crisis, new figures show.
The average price slumped 6.8 per cent, from £412,731 to £384,632, between last month and this month.
The figures, compiled by estate agency website Rightmove, show prices are still higher than a year ago, but only by 8.3 per cent.
The monthly fall has affected all 32 London boroughs and provides the starkest evidence yet that the credit crunch and consumer downturn is hurting the property market. Experts now predict the borrowing squeeze will cause London prices to fall by three per cent next year and in 2009.
Analyst Howard Archer, of Global Insight, said: "We have already seen a significant drop in mortgage lending and in buyers approaching estate agents. The average time it takes to sell a house is the longest for two years, and the number of mortgages offered in October was the lowest for almost three years. Sellers have had to accept offers well below the asking prices, so it is hardly surprising that they have finally seen the need to lower the asking prices."
Although the price fall is dramatic, Rightmove said it had been exaggerated by the timing of the last phase of the introduction of home information packs.
It says a third of the drop was due to a greater number of smaller properties being put on the market last month, to get ahead of the introduction of home packs for all houses, which took place on Friday.
Miles Shipside of Rightmove said: "We calculate that the one-off surge in the least expensive properties was responsible for 2.3 percentage points of the fall. However, even allowing for that, the price fall is by far the biggest we have seen at this traditionally quiet time of the year.
"It is normal that only fairly desperate sellers are active just before Christmas and prices are always reduced accordingly. But the size of the reductions this December is further confirmation of sellers having to readjust prices downwards."
The biggest percentage falls were in Hackney (10.2 per cent), Tower Hamlets (9.6 per cent), and Southwark (8.3 per cent).
In cash terms, the largest drops were in Kensington and Chelsea (about £80,000), Westminster (£50,000), Hackney (£48,000) and Islington (£45,000).
============================================
The pointis we don't have a lot of homeowners - we have a lot of mortgagees, some of whom have no hope of ever paying their debts unless house prices continue their dizzy rise. Which they can't, and won't. And we have a load of amateur 'property developers' trying to make a quick buck.
K
Kathy
Guest
Is that still your opinion, Desperate?
Honest Tom
At the Start
- Joined
- May 2, 2003
- Messages
- 1,272
Isn't it about time we were joining the Euro. Surely the five tests will soon be met.
1) £1 = 1 euro
2) UK homeowners screaming out for stable interest rates
3) UK population finally sick of being ripped off by their own financial ponces as well as on all consumer goods.
4) UK population hate their government more than they do Brussels
5) Percentage of UK population with IQ's above 0 exceeds 50% for first time.
1) £1 = 1 euro
2) UK homeowners screaming out for stable interest rates
3) UK population finally sick of being ripped off by their own financial ponces as well as on all consumer goods.
4) UK population hate their government more than they do Brussels
5) Percentage of UK population with IQ's above 0 exceeds 50% for first time.
Bar the Bull
At the Start
I think it would be more beneficial for the UK to have control over its own interest rates.
Honest Tom
At the Start
- Joined
- May 2, 2003
- Messages
- 1,272
I would've put my money into euros long ago were it not for the thought of getting ripped off by the financial ponces you have to go through to do so. Why isn't there a money exchange called moneyfair?
K
Kathy
Guest
Apologies in advance as this article is courtesy of The Daily Mail. I found it interesting. 
The middle-class 'property tycoons' now burned by buy-to-let
By RICHARD PENDLEBURY
Last updated at 00:38am on 20th March 2008
Apartment 502 in a "luxury" new-build block in Ipswich's Anchor Street is something of a legend in the UK property auction world.
When it was first sold in June 2006, it went for £268,000. Three months ago, it was back on the market as a mortgage repossession. The hammer price was £133,000.
Anchor Street was what one expert calls "a worst case scenario". But countless other new-build apartments stand empty across Britain's crane-filled urban skylines.
Burnt fingers: The buy-to-let market had led to a high number of repossessions
Meanwhile, a host of inexperienced investor landlords wring their hands in anguish.
The technical term for this phenomenon is a "market correction". But whatever the euphemistic description, the mood at the annual Home And Property Investor exhibition in London's Docklands earlier this month was a little more muted than of old.
Thousands attended the showcase for the buy-to-let market which, over the past decade, has revolutionised middle-class investment habits and changed the landscape of Britain's cities.
As property prices seemed on an ever upward curve and interest rates remained low, many people thought about buying another property to rent out.
With many pensions in doubt, it seemed to make sense to have a bricks and mortar nest egg.
In fact, for the first time, the number of UK mortgages on buy-to-let properties has just risen above the one million mark. Ten years ago, there were only 29,000.
The classic buy-to-let is a newbuild, two-bedroom flat. According to the latest figures, the total outstanding UK buy-to-let debt is some £122billion.
That is the equivalent of the Gross National Product of South Africa. The figure is astounding.
Boom and bust: Thousands invested everything into buy-to-let ventures
But it also represents a huge and vulnerable financial bubble which, after years of growth and months of warnings, finally seems to be bursting.
"The herd instinct has been very strong," says David Sandeman, whose company Essential Information Group compiles property auction data from across the country.
"There has been a very bull market and a lot of dinner party peer pressure to follow suit and get into buy-to-let. Your friends are making a mint - why shouldn't you?
"People thought they were going to make some easy money. But the blip has happened very quickly and now a lot of people have found themselves caught in a financial vice.
"Repossessions are rising and we are seeing a sometimes terrifying drop in price at the subsequent auctions."
Alan Ward, of the Residential Landlords Association (RLA), adds, sardonically: "Some buyers would have been better off investing in Northern Rock."
A variety of factors have combined to cause the reverse, which some doomsayers are describing as potentially the UK equivalent of the American subprime mortgage crisis.
Interest rates are now higher than six years ago. And, after increasing by an average of 211 per cent in ten years, residential property prices are expected to fall by four per cent in 2008.
Kate Faulkner, a property analyst and author of the Consumer Association's Property Investment Handbook, says: "If you got into the buy-to-let market in 2003, you are probably fine because of capital growth."
"But since then, there has been a 30 per cent increase in mortgage costs and rents have only gone up by a tenth.
"Over the last seven years, all pundits have predicted a price crash that never happened. We have been in a windfall market. Now that market is being corrected."
The fact is that far too many flats have been speculatively built, not only in northern hot spots such as Leeds, Manchester and Liverpool, but in smaller towns and cities across the country.
In many places, this has led to market saturation.
The result? Rock bottom rents and often months of so-called "void" - no one wanting to rent and therefore empty properties unable to service the debt.
Many of these properties were grossly overvalued in the first place.
Meanwhile, the number of buy-to-let mortgage repossessions is suddenly rising.
In recent weeks, building societies such as the Woolwich have become markedly less generous towards buy-to-let investors.
Arrangement fees are going through the roof.
One lender, BM Solutions, is withdrawing loans for landlords whose rent covers the total sum of their repayments.
Others are demanding rental of up to 130 per cent of the monthly mortgage repayments, for example.
And this at a time when many landlords would be delighted just to cover their costs.
Typical are Dean Jones, 33, a sales executive, and his wife, Amanda, who invested in their first buy-to-let property in Leeds in November 2006.
The mortgage loan rate was then 4.79 per cent. They have since bought two more houses at 5.69 per cent. But already the loans were becoming unaffordable.
"The lending criteria and high fees have made it difficult to refinance," says Mr Jones.
What's more, two of the country's top five specialist buy-to-let mortgage lenders - Paragon and Northern Rock - are in crisis.
That does not help their customers.
Among the worst affected individuals are those investors who bought recently.
According to Ms Faulkener: "Those getting into trouble are those who bought last year or maybe two years ago. They are the ones who will feel the squeeze."
What amazes the experts about these people is how few of them have done their homework before plunging in.
Many first-time investors either bought "off plan" - when the property was still on the drawing board - or did not even bother to go to the location of their potential purchase to research whether the figures proffered by developers or estate agents really stacked up.
"Choose the area carefully and study the state of the local market," says Mr Ward of the RLA, which represents some 14,000 landlords.
"Do not buy just because the price seems right. It is that price for a reason. You must know what the market is doing in the neighbourhood."
He says that today buy-to-let investors would be lucky to get a five per cent rental yield, down from eight per cent two years ago.
Many first-timers fail to factor in hidden costs such as insurance, maintenance and management fees.
"People are also being duped," says Mr Sandeman. "New-build prices are too high and their rental yield too low.
"The trouble is that many of these people invested from their armchairs, without due diligence. I have spoken to a lot of people who have bought properties in city centres without ever having seen it.
"Some mortgage lenders are even demanding that monthly rental returns from a buy-to-let property should be 30 per cent higher than the loan repayments."
He adds: "The average time between sale and auction after repossession is two years, with an average drop in price of 25 per cent."
One property analyst described how he received a spam e-mail from a developer, which promised a £30,000 discount on a new-build flat in the Midlands if he bought immediately.
The undiscounted price was £195,000, the e-mail stated. Posing as a buy-to-let investor, the analyst approached the developer and asked how they had come to that price.
"He couldn't explain. Then I did some further research and found that a number of new-build flats in a next-door block were being sold as repossessions for £130,000."
He adds: "I know some people would have been dazzled by the discount and snapped it up."
Such reckless buyers are in great demand among Liverpool property developers.
While the new-build blocks are often trumpeted as symbols of much needed inner city and riverside regeneration, many are being built without a ready market.
It is estimated that there are around 15,000 unoccupied new build apartments in the city. Other research has suggested that 35 per cent of the apartments in the centre are unoccupied.
Criticism has also been directed towards the quality of some of the new developments, thrown up with an eye to a quick, massive profit.
But the underlying problem is that there is simply too much stock. A symbol of the problems within the market is Beetham Tower, a new-build whose upper apartments boast views towards Snowdonia.
When it was completed in 2004, a two-bedroom flat was sold for £206,500. The same apartment was put back on the market last autumn for £165,000.
After two months without any interest, it went to auction in London as a mortgage repossession-with a guide price of £120,000. It was finally sold two months ago for £101,000, less than half its original price.
Not good news for those trying to sell or rent the estimated 4,750 new apartments due to come on to the market in Liverpool in 2007-2008.
A further 3,600 are apparently waiting for planning permission.
Councillor Paul Brant, who represents Liverpool's Riverside ward, where many of the high-rise apartment blocks are being built, says the market has reached saturation point.
"There are too many one-or two bedroom apartments and not enough people to move into them," he says.
Cllr Brant also says he knows of at least two city centre developments where work has ground to a halt because of the current financial crisis.
Steven Beilin, managing director of Liverpool estate agents BE Property Services, says investors looking to buy a second property in the £150,000- £250,000 price range are no longer coming forward.
High interest rates mean that these investors can't make enough in rentable value to cover any mortgage.
"If you're charging £700 a month rent for a flat in town, that's not going to cover your £8,500 mortgage each year. There's no capital gain and no income."
One development, The Reach, in Leeds Street, was sold off-plan in 2004. But when it was ready for habitation two years later, the buy-to-let investors had already seen their investment lose 12 per cent of its value, says Mr Beilin.
There are a significant number of empty new-build apartments in three blocks on Liverpool's Wapping Dock.
Liverpool is not alone. Thousands of empty flats have been reported in Leeds, where a 54-storey residential block is being completed in the city centre.
Industry research also suggests similar saturation in Manchester, Ipswich, Norwich, Leicester, Nottingham and Birmingham.
The buy-to-let army has suffered a bloody nose.
Of course, there are now great "bargains" out there at auction, like the Beetham Tower and Anchor Street repossessions.
You can still make money in buy-to-let at the expense of those who crashed and burned in the last two years.
But for those who are already fully committed and waiting to see how much the market "corrects", then fingers crossed and hope for the best.
If you hitched your wagon to the middle-class property investment boom, then you could be in for a rough ride.
The middle-class 'property tycoons' now burned by buy-to-let
By RICHARD PENDLEBURY
Last updated at 00:38am on 20th March 2008
Apartment 502 in a "luxury" new-build block in Ipswich's Anchor Street is something of a legend in the UK property auction world.
When it was first sold in June 2006, it went for £268,000. Three months ago, it was back on the market as a mortgage repossession. The hammer price was £133,000.
Anchor Street was what one expert calls "a worst case scenario". But countless other new-build apartments stand empty across Britain's crane-filled urban skylines.
Burnt fingers: The buy-to-let market had led to a high number of repossessions
Meanwhile, a host of inexperienced investor landlords wring their hands in anguish.
The technical term for this phenomenon is a "market correction". But whatever the euphemistic description, the mood at the annual Home And Property Investor exhibition in London's Docklands earlier this month was a little more muted than of old.
Thousands attended the showcase for the buy-to-let market which, over the past decade, has revolutionised middle-class investment habits and changed the landscape of Britain's cities.
As property prices seemed on an ever upward curve and interest rates remained low, many people thought about buying another property to rent out.
With many pensions in doubt, it seemed to make sense to have a bricks and mortar nest egg.
In fact, for the first time, the number of UK mortgages on buy-to-let properties has just risen above the one million mark. Ten years ago, there were only 29,000.
The classic buy-to-let is a newbuild, two-bedroom flat. According to the latest figures, the total outstanding UK buy-to-let debt is some £122billion.
That is the equivalent of the Gross National Product of South Africa. The figure is astounding.
Boom and bust: Thousands invested everything into buy-to-let ventures
But it also represents a huge and vulnerable financial bubble which, after years of growth and months of warnings, finally seems to be bursting.
"The herd instinct has been very strong," says David Sandeman, whose company Essential Information Group compiles property auction data from across the country.
"There has been a very bull market and a lot of dinner party peer pressure to follow suit and get into buy-to-let. Your friends are making a mint - why shouldn't you?
"People thought they were going to make some easy money. But the blip has happened very quickly and now a lot of people have found themselves caught in a financial vice.
"Repossessions are rising and we are seeing a sometimes terrifying drop in price at the subsequent auctions."
Alan Ward, of the Residential Landlords Association (RLA), adds, sardonically: "Some buyers would have been better off investing in Northern Rock."
A variety of factors have combined to cause the reverse, which some doomsayers are describing as potentially the UK equivalent of the American subprime mortgage crisis.
Interest rates are now higher than six years ago. And, after increasing by an average of 211 per cent in ten years, residential property prices are expected to fall by four per cent in 2008.
Kate Faulkner, a property analyst and author of the Consumer Association's Property Investment Handbook, says: "If you got into the buy-to-let market in 2003, you are probably fine because of capital growth."
"But since then, there has been a 30 per cent increase in mortgage costs and rents have only gone up by a tenth.
"Over the last seven years, all pundits have predicted a price crash that never happened. We have been in a windfall market. Now that market is being corrected."
The fact is that far too many flats have been speculatively built, not only in northern hot spots such as Leeds, Manchester and Liverpool, but in smaller towns and cities across the country.
In many places, this has led to market saturation.
The result? Rock bottom rents and often months of so-called "void" - no one wanting to rent and therefore empty properties unable to service the debt.
Many of these properties were grossly overvalued in the first place.
Meanwhile, the number of buy-to-let mortgage repossessions is suddenly rising.
In recent weeks, building societies such as the Woolwich have become markedly less generous towards buy-to-let investors.
Arrangement fees are going through the roof.
One lender, BM Solutions, is withdrawing loans for landlords whose rent covers the total sum of their repayments.
Others are demanding rental of up to 130 per cent of the monthly mortgage repayments, for example.
And this at a time when many landlords would be delighted just to cover their costs.
Typical are Dean Jones, 33, a sales executive, and his wife, Amanda, who invested in their first buy-to-let property in Leeds in November 2006.
The mortgage loan rate was then 4.79 per cent. They have since bought two more houses at 5.69 per cent. But already the loans were becoming unaffordable.
"The lending criteria and high fees have made it difficult to refinance," says Mr Jones.
What's more, two of the country's top five specialist buy-to-let mortgage lenders - Paragon and Northern Rock - are in crisis.
That does not help their customers.
Among the worst affected individuals are those investors who bought recently.
According to Ms Faulkener: "Those getting into trouble are those who bought last year or maybe two years ago. They are the ones who will feel the squeeze."
What amazes the experts about these people is how few of them have done their homework before plunging in.
Many first-time investors either bought "off plan" - when the property was still on the drawing board - or did not even bother to go to the location of their potential purchase to research whether the figures proffered by developers or estate agents really stacked up.
"Choose the area carefully and study the state of the local market," says Mr Ward of the RLA, which represents some 14,000 landlords.
"Do not buy just because the price seems right. It is that price for a reason. You must know what the market is doing in the neighbourhood."
He says that today buy-to-let investors would be lucky to get a five per cent rental yield, down from eight per cent two years ago.
Many first-timers fail to factor in hidden costs such as insurance, maintenance and management fees.
"People are also being duped," says Mr Sandeman. "New-build prices are too high and their rental yield too low.
"The trouble is that many of these people invested from their armchairs, without due diligence. I have spoken to a lot of people who have bought properties in city centres without ever having seen it.
"Some mortgage lenders are even demanding that monthly rental returns from a buy-to-let property should be 30 per cent higher than the loan repayments."
He adds: "The average time between sale and auction after repossession is two years, with an average drop in price of 25 per cent."
One property analyst described how he received a spam e-mail from a developer, which promised a £30,000 discount on a new-build flat in the Midlands if he bought immediately.
The undiscounted price was £195,000, the e-mail stated. Posing as a buy-to-let investor, the analyst approached the developer and asked how they had come to that price.
"He couldn't explain. Then I did some further research and found that a number of new-build flats in a next-door block were being sold as repossessions for £130,000."
He adds: "I know some people would have been dazzled by the discount and snapped it up."
Such reckless buyers are in great demand among Liverpool property developers.
While the new-build blocks are often trumpeted as symbols of much needed inner city and riverside regeneration, many are being built without a ready market.
It is estimated that there are around 15,000 unoccupied new build apartments in the city. Other research has suggested that 35 per cent of the apartments in the centre are unoccupied.
Criticism has also been directed towards the quality of some of the new developments, thrown up with an eye to a quick, massive profit.
But the underlying problem is that there is simply too much stock. A symbol of the problems within the market is Beetham Tower, a new-build whose upper apartments boast views towards Snowdonia.
When it was completed in 2004, a two-bedroom flat was sold for £206,500. The same apartment was put back on the market last autumn for £165,000.
After two months without any interest, it went to auction in London as a mortgage repossession-with a guide price of £120,000. It was finally sold two months ago for £101,000, less than half its original price.
Not good news for those trying to sell or rent the estimated 4,750 new apartments due to come on to the market in Liverpool in 2007-2008.
A further 3,600 are apparently waiting for planning permission.
Councillor Paul Brant, who represents Liverpool's Riverside ward, where many of the high-rise apartment blocks are being built, says the market has reached saturation point.
"There are too many one-or two bedroom apartments and not enough people to move into them," he says.
Cllr Brant also says he knows of at least two city centre developments where work has ground to a halt because of the current financial crisis.
Steven Beilin, managing director of Liverpool estate agents BE Property Services, says investors looking to buy a second property in the £150,000- £250,000 price range are no longer coming forward.
High interest rates mean that these investors can't make enough in rentable value to cover any mortgage.
"If you're charging £700 a month rent for a flat in town, that's not going to cover your £8,500 mortgage each year. There's no capital gain and no income."
One development, The Reach, in Leeds Street, was sold off-plan in 2004. But when it was ready for habitation two years later, the buy-to-let investors had already seen their investment lose 12 per cent of its value, says Mr Beilin.
There are a significant number of empty new-build apartments in three blocks on Liverpool's Wapping Dock.
Liverpool is not alone. Thousands of empty flats have been reported in Leeds, where a 54-storey residential block is being completed in the city centre.
Industry research also suggests similar saturation in Manchester, Ipswich, Norwich, Leicester, Nottingham and Birmingham.
The buy-to-let army has suffered a bloody nose.
Of course, there are now great "bargains" out there at auction, like the Beetham Tower and Anchor Street repossessions.
You can still make money in buy-to-let at the expense of those who crashed and burned in the last two years.
But for those who are already fully committed and waiting to see how much the market "corrects", then fingers crossed and hope for the best.
If you hitched your wagon to the middle-class property investment boom, then you could be in for a rough ride.
This is a very big problem
with democracies , politics use this not to lose election in the short term and not thinking in long term.
It is pathetic to see this politician lowering the interest rates when there is lack of liquidity to help people pay debts they have sign and they can not assume now.
The economic crash of the stocks and prices of the houses is something is going to happen and once they are in the level they should they will go up again.
Just watching a programme on ITV about the house price "crisis". It's got a clip from another broadcast a year ago showing that notorious ramper Phil Spencer (that's the Hon Kirsty's sidekick) forecasting a 10% price RISE for the following 18 months!
K
Kathy
Guest
There could be small rises in parts of the country but for the majority of homeowners I think there is going to be a rough few months ahead.
I sold a modest little flat in London just before Christmas.I couldn't beleve the money I got for it but had a right whinge about the exchange rate to the euro -it was 1.38 at the time -today its 1.24.
I am no expert in economics but I think the next 18 months will bring a lot of hardship to these islands.
I am no expert in economics but I think the next 18 months will bring a lot of hardship to these islands.
K
Kathy
Guest
An interesting piece from The Times On Line for anyone still watching what is happening with Gordon, Alistair and Tax Payers money.
April 18, 2008
Scandal of luring first-time buyers
Gordon Brown is acting immorally by asking for rate cuts that could lead to negative equity
Alice Miles
What are they doing over there? Gordon is in the United States and Alistair is in China: because this is global, isn't it? It's not our fault, they imply; not us, the British Government. We're trying to grapple with worldwide financial problems here.
Except the problem is not global. It's British. House prices in Britain, at six times average earnings, are too high. That's it. We all know that, we've known it for years. Property prices are nonsensical, exorbitant, unaffordable, immorally inflated by investors and a shortage of available land space to build new homes, exploited by a greedy City.
All those buying a property have known this for the past five years at least, and it has then become in their interest to hope that the boom continues. To that extent, property owners have been complicit in the financial recklessness of the past few years: easy credit built on pyramid selling. Buying houses has been a gamble, a cross-your-fingers-and- hope-for-the-best, those-mortgages- are-pretty-generous bet that many of us have indulged in.
Nothing could be more immoral, then, in the current climate, than using government efforts and taxpayers' money to encourage first-time buyers to enter the housing market in order to stabilise the dodgy situation that banks and incautious borrowers have got themselves into through overlending and overstretching themselves: row, row harder, keep us all afloat! Yet that appears to be what the Government's strategy is.
Background
Britain's house prices: the nine-year wait
Tories blame Brown for house price 'bust'
Crunch could force 4,000 estate agents to shut
Labour’s self-inflicted wound
Related Links
Who's to blame for the housing market slowdown?
“Here's a nice deal for you, love”: Gordon Brown has turned into Del Boy, and I suppose that would make Alistair Darling his Rodney. They are trying to tempt the banks into continuing to offer cheap mortgage deals on properties that are simply not worth the astonishingly high amounts they have been flogged at in recent years. And trying to encourage you to sign up for them. The IMF says property prices are 27 per cent too high. Why would anyone with the interests of a first-time buyer at heart encourage him, or anybody else for that matter, to purchase at the top end of the market, with a long-overdue correction imminent? They will tumble into negative equity before they've finished clearing up the Valpolicella stains from the housewarming party.
It isn't as if, to most of the rest of us, a fall in house prices is such a big deal anyway. To most of us, for whom a house is a home, not part of an investment portfolio, tumbling values make sense. To most of us, the loss of 4,000 estate agents isn't much to worry about. Nor is the loss of tens of thousands of City boys.
To most of us, the housing bubble has been an alarming, nonsensical boom that we have scrabbled to keep up with for fear of being left behind, not out of greed but because we wanted a home to live in, one that we owned.
For most of us, a sharp correction will come as a blessed relief. House prices might make some sort of sense again; investors from the City and overseas will leave us alone and stop buying up the places we need to live in. A decent house in the country might become affordable once more for a local person, not just for someone from far away, paying cash.
Most of us didn't take out crazily silly mortgages (just, in my case anyway, quite silly). We were reasonably careful, we noted that prices were due to fall, we don't expect to be bailed out when they do, and we don't expect the bigger gamblers to be bailed out either. At what point did the Prime Minister dump prudence and so enthusiastically cop off with charity? Our charity, that is. You don't need to be an economist to understand that swapping debts for government bonds means the taxpayer is ultimately taking on the risk that should stay with the banks.
How dare a man who has lectured us all ad nauseam about prudence, year after year after year, now use our money to bail out the profligate? Times are tough, yes, but for most people they are tough in the day-to-day expenditure; in the purse, not the property portfolio. The pinch, for ordinary people, comes not from little falls in the nominal value of people's homes, but from day-to-day living costs: the food, the petrol, the gas and the council tax bills. It is in this context that the scrapping of the 10p rate has been so poisonous, a mean little kick at a time when people are already feeling hamstrung in their everyday spending. Globetrotting ministers wagging their fingers at the international gods of high finance are not going to fix that.
For most of us, the mortgage hasn't suddenly become wildly more expensive (coming to the end of a fixed-rate deal? Tough. What part of Two-Year Fixed Rate didn't you understand?). The house might be worth a bit less than yesterday, but so what? So is everybody else's. So is the bigger house you might want to buy one day. The majority of householders know they are still going to end up profiting from the boom of the past decade.
I said that many of us were complicit in that boom. Most complicit of all was the Chancellor at the time. Can it only be my memory that fails to recall any note of public caution from Mr Brown at the Treasury as the City high jinks fuelled his public spending splurge? As the housing market and the cheap mortgages and the loans on loans on loans floated Britain through the past few years, and Mr Brown into No 10?
Now he wobbles along on an empty bubble. It's a hellish tricky thing to steer. And not even Del Boy could sell the air in a bubble
April 18, 2008
Scandal of luring first-time buyers
Gordon Brown is acting immorally by asking for rate cuts that could lead to negative equity
Alice Miles
What are they doing over there? Gordon is in the United States and Alistair is in China: because this is global, isn't it? It's not our fault, they imply; not us, the British Government. We're trying to grapple with worldwide financial problems here.
Except the problem is not global. It's British. House prices in Britain, at six times average earnings, are too high. That's it. We all know that, we've known it for years. Property prices are nonsensical, exorbitant, unaffordable, immorally inflated by investors and a shortage of available land space to build new homes, exploited by a greedy City.
All those buying a property have known this for the past five years at least, and it has then become in their interest to hope that the boom continues. To that extent, property owners have been complicit in the financial recklessness of the past few years: easy credit built on pyramid selling. Buying houses has been a gamble, a cross-your-fingers-and- hope-for-the-best, those-mortgages- are-pretty-generous bet that many of us have indulged in.
Nothing could be more immoral, then, in the current climate, than using government efforts and taxpayers' money to encourage first-time buyers to enter the housing market in order to stabilise the dodgy situation that banks and incautious borrowers have got themselves into through overlending and overstretching themselves: row, row harder, keep us all afloat! Yet that appears to be what the Government's strategy is.
Background
Britain's house prices: the nine-year wait
Tories blame Brown for house price 'bust'
Crunch could force 4,000 estate agents to shut
Labour’s self-inflicted wound
Related Links
Who's to blame for the housing market slowdown?
“Here's a nice deal for you, love”: Gordon Brown has turned into Del Boy, and I suppose that would make Alistair Darling his Rodney. They are trying to tempt the banks into continuing to offer cheap mortgage deals on properties that are simply not worth the astonishingly high amounts they have been flogged at in recent years. And trying to encourage you to sign up for them. The IMF says property prices are 27 per cent too high. Why would anyone with the interests of a first-time buyer at heart encourage him, or anybody else for that matter, to purchase at the top end of the market, with a long-overdue correction imminent? They will tumble into negative equity before they've finished clearing up the Valpolicella stains from the housewarming party.
It isn't as if, to most of the rest of us, a fall in house prices is such a big deal anyway. To most of us, for whom a house is a home, not part of an investment portfolio, tumbling values make sense. To most of us, the loss of 4,000 estate agents isn't much to worry about. Nor is the loss of tens of thousands of City boys.
To most of us, the housing bubble has been an alarming, nonsensical boom that we have scrabbled to keep up with for fear of being left behind, not out of greed but because we wanted a home to live in, one that we owned.
For most of us, a sharp correction will come as a blessed relief. House prices might make some sort of sense again; investors from the City and overseas will leave us alone and stop buying up the places we need to live in. A decent house in the country might become affordable once more for a local person, not just for someone from far away, paying cash.
Most of us didn't take out crazily silly mortgages (just, in my case anyway, quite silly). We were reasonably careful, we noted that prices were due to fall, we don't expect to be bailed out when they do, and we don't expect the bigger gamblers to be bailed out either. At what point did the Prime Minister dump prudence and so enthusiastically cop off with charity? Our charity, that is. You don't need to be an economist to understand that swapping debts for government bonds means the taxpayer is ultimately taking on the risk that should stay with the banks.
How dare a man who has lectured us all ad nauseam about prudence, year after year after year, now use our money to bail out the profligate? Times are tough, yes, but for most people they are tough in the day-to-day expenditure; in the purse, not the property portfolio. The pinch, for ordinary people, comes not from little falls in the nominal value of people's homes, but from day-to-day living costs: the food, the petrol, the gas and the council tax bills. It is in this context that the scrapping of the 10p rate has been so poisonous, a mean little kick at a time when people are already feeling hamstrung in their everyday spending. Globetrotting ministers wagging their fingers at the international gods of high finance are not going to fix that.
For most of us, the mortgage hasn't suddenly become wildly more expensive (coming to the end of a fixed-rate deal? Tough. What part of Two-Year Fixed Rate didn't you understand?). The house might be worth a bit less than yesterday, but so what? So is everybody else's. So is the bigger house you might want to buy one day. The majority of householders know they are still going to end up profiting from the boom of the past decade.
I said that many of us were complicit in that boom. Most complicit of all was the Chancellor at the time. Can it only be my memory that fails to recall any note of public caution from Mr Brown at the Treasury as the City high jinks fuelled his public spending splurge? As the housing market and the cheap mortgages and the loans on loans on loans floated Britain through the past few years, and Mr Brown into No 10?
Now he wobbles along on an empty bubble. It's a hellish tricky thing to steer. And not even Del Boy could sell the air in a bubble
Desert Orchid
Senior Jockey
- Joined
- Aug 2, 2005
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- 25,037
There's an awful lot of subjective supposition and speculation in there.
K
Kathy
Guest
I knew you would say that Maurice.
Desert Orchid
Senior Jockey
- Joined
- Aug 2, 2005
- Messages
- 25,037
OK, let me just start with her opening gambit...
...in her opinion.
They can only lead to negative equity if the banks are stupid enough to lend funds the value of which are greater than the value of the property. Yes, they've been guilty of this stupidity for years but somehow I can't see them doing it in the current climate. Then again that's just my opinion and, of course, you knew I was going to say that too.
...in her opinion.
They can only lead to negative equity if the banks are stupid enough to lend funds the value of which are greater than the value of the property. Yes, they've been guilty of this stupidity for years but somehow I can't see them doing it in the current climate. Then again that's just my opinion and, of course, you knew I was going to say that too.