Hourly Doom Update

[Clippy]

...ah the problem apparently, is BTL. When mortgages are renewed next year lenders will be demanding far more capital, like 20% extra, those that can't find it will probably forced into a sale. This will happen next year.

Interestingly, an article on this appeared int' paper a few days ago.

http://tinyurl.com/363oje

Agree, that if there are redundancies, then the house of cards will start to crumble.

What about if the Polish builders etc start to head home, surely this wil have an effect too.

Edit: More doom: http://tinyurl.com/3c78fo

[sasguru]

So the question is really what percentage of BTL landlords are over-leveraged.
I suspect it's a smallish proportion.

[sasguru]

...ah the problem apparently, is BTL. When mortgages are renewed next year lenders will be demanding far more capital, like 20% extra, those that can't find it will probably forced into a sale. This will happen next year.

Post a linky.
I don't think that's true. Interest rates may be raised but I don't think lenders will suddenly change the LTV on existing mortgages.

[Bagpuss]

Well we need figures on BTL mortgages approved by year, one suspects all those after 2004 will be.

# approved after 2004/total since 99 say would give a rough estimate

[Clippy]

So the question is really what percentage of BTL landlords are over-leveraged.
I suspect it's a smallish proportion.

Really?

I would have thought it's a fair number especially as the whole climate was geared towards complete novices being able to take out massive mortgages with a limited deposit.

Don't forget, one of the 'stars' of the mortgage world was the the Self-cert mortgage.

[sasguru]

Well we need figures on BTL mortgages approved by year, one suspects all those after 2004 will be.

# approved after 2004/total since 99 say would give a rough estimate

Why 2004? That assumes a much greater than 7% fall. The City is betting on 7% which takes it to sometime last year.

[Bagpuss]

The traditional BTL model stopped working around mid 2004, that's when 'investors' had to rely on larger deposits or gamble on discounted rates. All those people are at risk IMHO. What percentage they make up of the total market is anyones guess, but given the exponential growth I'd hazzard at least 10% and probably much higher, irrespective once the panic begins...

[tim123]

Prices will not fall massively as long as there are no mass redundancies as happened in the early 90s. People will merely stay put and not move rather than take a loss.

I think you are wrong.

There are enough forced sales each year (death, divorce, job moves, BTL cashing in etc) to make a noticable difference.

In any case if there are no sales at all, that will look even worse than a 10% fall in prices.

tim

[sasguru]

Anyway lets hope for a good 40%, eh?

[DimPrawn]

Prices will not fall much, a few % tops.

You need mass unemployment for that, and Gordon will just create another million tax-payer funded non-job in the public sector to stave off any unemployment.

So keep dreaming of your 40% falls.