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Melboy

So where does the buying and rental market go from here?

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If it's obvious to me..... it must be obvious to everyone else.    Almost a Shakespearean quote from me. 

I can see the housing market plummeting after this Corona virus has passed through with very high unemployment figures coming through. This is going to last for a few years as a recession bites into the economy.

For those with a stock of cash earning cock-all in a savings account perhaps it would be a good time to buy a property or two as the property prices slide in a downwards projection.  This is what happened in 1989 and a further back in 1979/80 when property prices tumbled and property was a good investment to hold long term.

I have had several letters through in the past 2 weeks telling me that my savings account money has been slashed to 0.005% (worse one) and 0.5% ( best one). 😀       Clearly these financial institutions don't want my money anymore so perhaps at my tender old age I should come out of my enforced relaxed semi retirement and look to invest in some more property.........about next October I would say would be a good time to grab a bargain and not forgetting the 3 D's of course.........Death, Destitution, Divorce.

I do think the rental market will still stand OK  but perhaps with rental prices at a lower price that can be achieved right now.

Anyway what do you think?

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Well I am feeling fairly optimistic and wouldn't be surprised if the housing market goes mad with a flood of properties coming up for sale. All the current ones for sale, venders who had already made the decision to sell this year, landlords who have got into recent difficulties, marital break-ups due to current situation and all the properties that have to be sold due to normal deaths in the last few months piling up and sadly the ones because of the virus.

Cant say what will happened to prices but expect them to take a little tumble and if you have a wad  of cash burning a hole in your pocket there could be some bargains out there to be had.

But then again I could be miles off the mark.

 

 

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Yes that's my take on it.

There will be lots of property resulting from marriage break up with people couped up together for weeks/months. We only have to look at those that come to market following the Xmas break to get a feel for what will happen after a much longer period.

Don't fotget, Brexit happens in December......which further complicates the already complicated property market.

There is no guarantee of a vaccine, ever.......so if this crisis continues way into 2021 or beyond then all bets are off.

 

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For those with cash the opportunities are coming, imo.

Since much of housing buoyancy is dependant on mortgage availabilities prices must fall, as I anticipate far less availability of those

But as that means the property market becomes more dependant on revenues I think there needs to be a period allowed to see where all this ends up. Rent holidays might be more familiar than we would like and some bright spark was shouting on the media for all rents to be put on hold for the duration.

 

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Don't forget about the government's persistent efforts to try to destroy the BTL industry that also needs to be taken into account

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As some of you may know my Daughter is an EA and this Corona virus has certainly changed the way that she will operate in the future. She is currently on furlough at home with not a lot to do really as it has all gone rather quiet which is fully understandable but her company are looking at more home working operations for their staff where this can be done and are looking to shut one or two of their 7 offices in a cost saving drive if the business shutdown rolls into a 4 month Corona lock down.

As far as property sales go here in my location nothing seems to be holding people back. I learnt only yesterday that a prestige property not too far from me sold in just one day of coming onto the market to a buyer registered with my Daughters  agency. 

Also I can see no evidence of anybody pulling out of pre Corona arranged deals from the properties I have been watching on Rightmove either.  Is this a good sign? I don't really know, perhaps things will be different 2 or 3 months ahead.

I am still of the opinion that many people will put their money into BTL due to the interest rates on their banked money being appalling. We shall see if that happens in the next 6 months or so.

No problems with my rentals either which has surprised me as I did expect one on two of my tenants to ask for a payment or reduced payment holiday. Plenty of time for that to happen I guess.

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I've had a rethink and have come to the conclusion that it's to difficult to answer. There are so many unknowns that any conclusion is pure speculation. Just look at the variables.

* CV19.....Will there ever be a fix ? 2021 or not for another 5 years ? How will society cope? How will the economy look? What will the world look like in 12 months ?

* Brexit......the affect on the economy ?

* Property prices....going up, going down, stable ?

* Levels of unemployment ?

* Mortgage availability ?

* Taxes.....bound to rise......landlords usually get hit.

* Wages.....recession, a repeat of the 1930's ? Who knows ?

* Inflation ?

* Negative interest rates ?

* Increased risks of prices falling, rents not being paid, little support from Gov, general negative attitude to property investment ?

* Etc.

If you think you know the answers to this lot you are better than me.

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No I'm no better with my transparent sphere either.

Another little variable, where will local Gov't's be (an then the knock on to Westminster) as far as needing the private LL again. Totally correct that we will remain a tax target, as I think will be the case for most as it this repayment of the crisis has to come from somewhere..

There is already some short term debt amnesty in place, will this be extended or even be a legislated debt write off in some cases?

I envisage tenant debt (to us) to be potentially written off if this continues for a long period, but how will that play out if lenders take the offensive against us, as in large scale repossessions? Do we get a knock on mortgage write off, partial perhaps (but not likely), total no chance. 

I read the Courts are in furlough, I imagine that to be the CC's.

But the housing value collapse from that over supply of property hitting the market from repossessions isn't something Westminster would want. So do we become respected again? Certainly the way repossessions occur now is socially disruptive.

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And my crystal ball on the future of the property world post Corona virus is somewhat cloudy......... if not a little cracked.

However risk takers will take a punt on property purchases if they smell a bargain to be had and are prepared to hold onto that property as a rental property. I did take that risk some years ago and was buying property in the two recessions we had but my business plan (in my head) failed somewhat by not holding onto those properties.  How I wish I had but hey! ho! there is nothing like 20/20 hindsight vision.

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I'm looking at replacing our motors, but think unless cheap it's better to wait.

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11 hours ago, Carryon Regardless said:

I'm looking at replacing our motors, but think unless cheap it's better to wait.

Me too.  My present 6 year old car is low mileage for the year and in near immaculate condition as I tend to look after my car as best as I can. When I look at a replacement model I will have to shell out around 12 grand plus my car in part ex.

I really don't want to spend that sort of money right now even though I can well afford to do so.  I can imagine many many people are thinking the same as me  (and you) as well for no doubt new or nearly new cars are an outrageous price to buy these days imo.

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It's complicated nowadys, will diesels be priced off the road? My 2006 Vito is good for what I do, historically I tend to use my vehicles well, but self maintain them well. I would like a Viano for the longer journeys, but the more reliable 646 engine finished in 2010 and that attracts tax at £555. The Vito costs £140 tax p.a. and is a treat by comparison. The new 447 (post 2015) V Class is lovely, but I have trouble justifying that for my usage, and even saving at £200 tax (v's the post 2010 Viano at £325) would take some time to recoup.

And then finding a Viano with honest mileage is very difficult, most are ex taxis with corrupted odometer.

Mrs Me drives a Gr Cherokee, 14 miles a day. It's time to change that, and maybe a petrol Accord so as to avoid ULEZ if / when we take it to London (visiting the daughter in law +++). But we want toys and they are more plentiful in the diesel.

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We divested one leasehold property 18 months ago so we could reduce mortgage payments on our other two freehold properties as it was looking like an awkward property to keep hold of as some nearby land was being disputed over and the access road was up for repair which would be costly. Turns out we sold at pretty much top of the market which was more luck than design.  Don't talk to me about the CGT we paid (only just paid out in January this year).

We put some in a pot as a deposit potentially for our daughter to use in the future for either university or her own property. Looks like we will need to use that at the moment as my husband isn't working due to the epidemic and both sets of tenants have stopped paying. I have an inkling one who works in the NHS just doesn't want to pay rather than can't and is telling us to take a mortgage holiday so 'it will be alright then and I don't have to pay you anything back at all as that is what I've been told'. I think the family are under the impression they are having a rental holiday but we are making it clear it just accruing. I have more sympathy for the other usually really hard working tenant who works tons of hours in the catering trade but is now out of work and her ex husband who stopped payments to her the moment he could, she is paying us a third of the rent which is all she can do but we appreciate her trying.  I am still working but don't know for how much longer. Whilst we've reduced mortgages we still do have mortgages to pay. I don't think we will be the ones with anything in the pot to buy which is disappointing but that will make it better pickings for those who do so good luck to you.  We were fortunate in the 90s downturn as we had capital then and picked up three bargains, you can't always have it work your way every time. 

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2 hours ago, fionaf said:



 ...........and both sets of tenants have stopped paying. I have an inkling one who works in the NHS just doesn't want to pay rather than can't and is telling us to take a mortgage holiday so 'it will be alright then and I don't have to pay you anything back at all as that is what I've been told'. can't always have it work your way every time. 

I believe you need to put them straight on that statement fionaf as they are quite incorrect in their assumption and have been advised incorrectly assuming the advice they received was actually genuine.

Perhaps they could look forward to eviction notice at the end of 3 months?   Your "holiday" mortgage payments are only tacked onto your mortgage year term and it is at the landlords discretion regarding the rental payments which also would added onto a final settlement bill for any tenant.

Finally as a working NHS person he is receiving his monthly salary unless he can prove he has been furloughed by the NHS and even then this does not mean he can stop paying you rent because he would be receiving 80% of his salary anyway.

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For the genuinely furloughed,

80% salary will mean a small saving in tax,

for many that will mean no commute expenses, some will have bought season tickets so less of a saving,

for all there is no booze, entertainment expenses, and clothing purchases will be near nowt.

For a great many this will mean they have a greater untouched (disposable but on what I can't imagine during the crisis) income.

 

It may be reasonable to sympathise with those on the front line, and their increased risk. What surprised me though is that the deaths of those, while being too many, are relatively low to what I would have expected. I wouldn't suggest for a moment that sympathy would be misplaced but why does he consider he is due such? The trouble there of course it's a delicate egg shell situation for a scabby landlord to venture into.

I also have a tenant that advises me to take a mortgage holiday. My finances aren't his concern and he can keep his bloody nose out of 'em. But it's a fum duck  that thinks that's the only expense we have in life and we should reorganise to give them an easy time.

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It's at times like this, when tenants are asking for a rent payment holiday, that the recommendations constantly pushed on this and other forums such as:

* Rent guarantee insurance &

* Home owning guarantor

Take on an added attraction.

It's such a shame that many, many landlords just can't be bothered to get it.

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I have rent guarantee insurance and company say due to measures in place by govt which remove legal mechanism to take a new claim forward no applications taken for a three month period. Property’s empty at present which I’m not too perturbed about but didn’t expect that .

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That response from your insurers makes perfect sense to me. 

Of course, you are still free to insist on your applicants providing a suitable home owning guarantor.

 

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Thanks Melboy, yes we've made it clear to tenants that this is not a 'holiday' their debt is accruing. The tenant that is paying a small amount but not the full amount is hugely apologetic and doing lots around the house and garden so I know they are genuine. It is the NHS one that I am fed up with. For me if I were furloughed the cap on salary would mean a major hit. 

It annoys me that ALL the advisors on this pandemic are unaffected financially, the NHS people, public sector workers etc. 

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