Real estate cycles

[Antnkel]

There's a lot of theories out there at the moment about property prices going up/down

One thing I can across whist looking, was mention of a constant cycle of boom and bust which had been going on for hundreds of years. Stating that on average the cycle last 18 years, 14 years of growth then 4 years of decline.

If this is the case then surely house prices are set to rise again and once they do for a considerable amount of time.

What you guys think?

[Richlist]

Its not an exact science, its an average.....you can't accurately predict when the market will rise or fall or for how long.

All you can say, is, that historically property, generally, has been a good investment compared to some of the alternatives. Past returns are not an indicator of potential future price rises.

There are lots of caveats though:

* London stands out as being unique.

* Price rises & falls differ from region to region.

* Economic, social & demographic changes have a big impact.

* etc, etc.

[Antnkel]

I hear what your saying, but when I was doing a bit of research I came across a guy who predicted in 2005 the housing market only had a couple of years before crashing. Fred Harrison is the guy and where I saw the property cycle.

I just thought it looked incouraging.

[Richlist]

Because property prices soared between circa 2000 & 2008, not a week went by when national newspapers didn't carry an article by someone predicting an impending price crash.

If you predict a fall in prices every week for 8 years.....eventually you are going to strike lucky.

[Dave A]

All I can say is next time we feel the market is close to peaking, were getting out sharpish. Easier ways of achieveing equivalent income these days.

Dave

[Antnkel]

The more I read up on this the more interesting it gets.

You don't have to believe it, but to me it gives you an idea of how things are going to go.

Why after centuries of the same cycle will it be different now today at this point, it won't things will just carry on as they have always done.

[Antnkel]

A few things to read, if anyone's interested.

Real estate reading:

Harrison, F, The Power in the Land, Shepheard-Walwyn, London, 1983.

Harrison, F, Boom / Bust, Shepheard-Walwyn, London, 2005.

Hoyt, H, One Hundred Years of Land Values in Chicago, University of Chicago Press, Illinois, 1933.

Wenzlick, R, The Coming Boom in Real Estate, Simon and Schuster, New York, 1936

[Carryon Regardless]

The last boom was largely fueled by the ease of attaining credit, even the banks thought housing inflation would go on at a, now easy to see, unsustainable rate.

Come the next boom, in the North we 'aint seeing it yet, have the lessons been learnt to control the wBankers? I don't see legislation will.

I am hoping the boom I keep hearing of down there will migrate to up here, it usually does but later. Then I look forward to getting the hell out of landlording, I'm bloody tired of being an easy target for trying to run a business. It seems this country feels there is something immoral about making trying to make a few honest quid.

Compared to 2000 ish house prices are still high compared to incomes, so Joe Bloggs has no easy time paying for his mortgage when interest rates do rise significantly, so that leaves investors, you know those immoral easy target for the Minister types. I don't want the further cr*p that will come our way to control us.

The interest rates will rise, here I agree with RL, slowly at first. There goes some profit I enjoy today.

Then there are the continual controls that effectively tax us, selective licencing, accreditattion as a LL. The DPS has been expensive for me, more in time spent than much else.

Local councils no longer wish to provide social housing, or develop their stock anyway, so that leaves us providing it. The councils have already been given more power to cause us to increase our efforts and costs, this will increase. An example of these measures I heard of last week. Wales has now approved a scheme for the accreditation of LL's. LL's shall be required to take training at a cost, and register of course. One criteria for the accreditation is that all smoke detectors must be checked each week. Does any LL actually visit each property each week? Will T's accommodate this over regular intrusion?

Where these councils don't approve a LL the LL will be required to go through an A who is approved, all sounds reasonable but there goes another !0% approx.

The light I am seeing at the end of this credit crunch tunnel is encouraging but.

I fear the Gov't are being smart pre election in showing the electorate what they want to see, cooking the books effectively so we believe they are getting it right. After the election, whoever wins, the robbing of Peter for Paul's benefit will mean that Peter must be repaid. Is there bad news ahead post election?

I will be happier when I am looking back at this industry from the outside.

Dave A where are these easier other ways, as hard as I look I don't see?

[Dave A]

I'm generalising, it depends on how much of the property you own and when you bought. We have bought at a far higher cost than someone who has been operating as a landlord for say 20 years, so we don't see spectacularly high returns. We also don't do high risk letting so our yields are naturally lower than say somebody buying a large terraced house and converting to multiple units. I know I could take what we have invested in property and without doing much at all achieve a higher yield, we are simply looking for capital gain in the long term. When we see that oppurtunity that's what we'll do, (if it takes another 5 - 10 years, no biggie)> Overall we enjoy doing this but we are getting more and more fed up with the risks associated with being a landlord and the one sided unfair legislation. So far we have been lucky, we have had virtually zero voids and on the whole good tenants. It's massively at the front of mind though that one crappy tenant can reverse this situation, especially if you slip up somewhere along the way.

On the up side, the type of properties we own should be fairly easy to move on when the time comes.

Dave

[Richlist]

I don't see any doom & gloom in fact, I'm feeling quite positive about the future of landlording.

Lets see:

* Rents continue to rise.....at a faster pace over the last few months. I've just increased the rents on some of mine.

* Agents & associated fees are being held down by lots of competition.

* We've all had big tax benefits since this Gov' came to power.

* The powers to be STILL aren't building enough properties so the shortage grows day by day.

* Immigration controls are virtually non existant so lots more arriving who need somewhere to live.

* Generation 'Rent' seem happy with their lot.

* Utilities & other organisations are at last recognising landlords & putting processes in place to make our lives easier.

HAPPY DAYS.

[Carryon Regardless]

I'm chuffed for those that are finding the industry easier than I, and feel my pessimism to be misplaced. I want more to feel this way and see good times ahead or I'll have no one to sell to.

I'm possibly shooting at my own foot here.

-My rents are going down, to get T's I find I need compete with others that seem to have empty properties. This is area dependent and I can't understand where all the people have moved to, maybe they save on the heating cost by 2 families cramming themselves into one rented terraced.

-It used to be that my 1 bed flats housed 1 person. More I find they are now with 2 and sometimes guests.

-Agents costs are still a cost and reduce any profits until they enable a moderate business to then handle much more T's and become larger. Many are fly by nights incapable of providing Grampa's level of service and only serve to increase our risks. After all we are liable for their failings. No thanks.

-Don't see the changes that produce tax benefits on the rental business. I have become aware of some subtle changes that reduce the benefits, but marginally in my case.

-The developers seem to be revving some and getting on with developing when the red tape allows. The shortage 'in some areas' remains but I am still not seeing benefits from this.

-I've rented to immigrants and they have the same style of doing a bunk when things go sour for them. I haven't sussed out how to hold them to account 'if' I am able to trace them in their homelands.

The subject of controls is relevant here again, how are we supposed to assess the correctness of their right to remain if the immigration controls have already failed? More additional risk here I feel.

-We have different experiences, I perceive a growing resentment from many that feel they will never own and often see the greedy capitalist as causing prices to remain beyond their reach.

-I'm interested to learn here, I still only see 'em sticking in the bloody key top up meters that then penalise future T's, and me in voids.

C'mon RL buy my portfolio, you know you could do a far better job than I and make good dosh.

[Richlist]

COR

I think we've discussed our individual experiences before and I believe we came to the conclusion that we don't target the same type of tenants. I go for professionals ie health service, education, engineering & science and occasionally law, finance & IT. I can afford to be very picky because in my area there are some large employers & a shortage of good quality property ( some of mine are fully furnished) and I can cherry pick the best. It doesn't mean I escape all of the problems, just many of them.

I was quite keen to get into the slum landlording business where I just let to benefits people but my partner has persuaded me that we have other business interests which will need our time & energy and I'll loose interest in it very quickly.

I'm reducing my property portfolio quite significantly over the next few years so that I end up with just the best ones. I'm hoping the market remains buoyant at least thru 2017.....I'm sure there'll be a few up's & down's. I'd only buy another property now if it was significantly below market value or had the potential to have value added.

[Melboy]

I'm the oldest on this forum so it's fair to say that I have been involved in more boom and busts then your average Punter.

I have been involved in property since I was aged 23 after realising that property would never go down......long term..... and I think it's fair to say that has been the case in the past 40 + years or so.

I wish I could give you all a magic formulae for the future of property buying but I can't. I have always bought and sold on a whim and a fancy and like everyone else in the property business I have made a few mistakes but mistakes are inevitable in this business and the secret is to learn from those mistakes and to go on to make a few more like I have.

The one thing I did learn was to always buy below market value and preferably a property requiring work so when you do rent out there is some capital value from the outset. Never buy a property that is "finished" unless it is a real bargain with a desparate seller.

I have sold property in my not so good locations and then reinvested that money into a nicer location. That appears to work OK but you have to wait on time and events to see any real profit.

[Richlist]

How do you know your the oldest ?

Is the Residential Landlord Forum providing you with classified info on forum members ?

[Carryon Regardless]

I hope you're not as old as I feel this week, bloody tenants.

[Dave A]

Sounds like you need a night out on the raz Cor. When you're chewing on lifes gristle and all that....

Dave

[Melboy]

How do you know your the oldest ?

Is the Residential Landlord Forum providing you with classified info on forum members ?

With age comes experience of sussing out approximate ages of who is commentating RL. However if there is any doubt I am willing to wager any bets with anyone as to the fact.

Your starter for 10. Have you ( or anyone else of the regular contributer's ) reached state pension age yet?

To answer your question this forum is not providing me classified information and how could it? I am but a member the same as everyone else.

[Melboy]

I hope you're not as old as I feel this week, bloody tenants.

Goes with the job COR.

We all have problems with tenant's as indeed I am dealing with one right now fortunately my pi$$ed-off landlord barometer manages to remain static most of the time these days but never the less some days I do feel like jacking the whole thing in and I would if it wasn't for the Capital Gains taxation system.

[Carryon Regardless]

I don't mind declaring, 53 going on 21 tonight with a few Guiness. I look forward to Friday nights with some, more than me, intelligent pals.

You're right Mel dealing with T's that are liars, abusers, idiots and just plain skint goes with the job, I accepted the risk of them when I signed up.

Dealing with selective licencing at £780, a clumsy and ambiguos Housing Act, a court system that massively favours and sympathises with the defendants, the DPS, the continual onslaught of legislation that catches us out so easily for being unaware and therefor non compliant and loads on extra expence, Housing Enforcement Officers, Shelter operatives practicing their legal skills, CAB......... are all a bit OTT in my humble view.

As I sit I am chasing a T's G'tor for approx £2.3k, CAB are on the case so aside from the County Court looking to help him out when we get there I stand to fall short in the Court designed for the man in the street because of my lack of procedural knowledge. Loads of comms but I didn't send a 'letter before action'.

I didn't re serve PI within the 30 days on 2 tenancies as they went periodic. They are very pally, both tenancies have gone sour. I can feel they have sought advice, from Shelter is my guess. Both refused to sign the PI this week, no matter I know if I can demonstrate it was presented but still a risk of 4x deposit return.

One in debt beyond £1,200 doesn't tell me he has no phone until I confront him now sends a message for me to write to inform when I shall attend to repair his W.C. Guaranteed he wont write back to confirm the 160 mile journey wont be wasted.

The other, only owes a little over £500. He would like me to 'amend' the AST to include his g'tor girl fiend. Due to an undeclared dog, dirty carpet, and smashed UPVC panel to the fr door I refused. He now claims I smashed his glass coffee table with my reporters notepad.

Somehow I feel their preparation of defence, with Shelter guidance maybe, come repossession time, plus the deposit claims of course.

Like I said not the best of weeks but there is Guiness to look forward to.

[Grampa]

Cor it doesnt matter it the tenant doesnt sign the PI the only requirement is they have recieved it. So a copy with proof of postage should be good enough.

[Carryon Regardless]

Thanks Grampa. In truth the whole DPS screw up frustrates me. When the Courts decided a periodic tenancy was a new tenancy most of us were already too late with re serving the PI.

Now it looks like repossessions are the way forward I've to re serve the PI's before a S21 can be served (again) correctly. Presented by a local lady, as my agent, both defer signing with excuses. Her word against theirs maybe so to be 'nearly' sure I should now post the same to them. Allowing 3 clear days for this and then 3 clear days for the S21 to arrive gives the gits another month to abuse.

As they both are now running arrears and have the potential to claim 4x the deposit I would imagine a court to effectively offset claim and counter claim causing me to lose the rents. Then there is the threat of the expenses I believe.

And aside from becoming a LL what did I do wrong?

[Grampa]

Your starter for 10. Have you ( or anyone else of the regular contributer's ) reached state pension age yet?

Or has anyone recieved their letter from the Queen?

[Grampa]

Thanks Grampa. In truth the whole DPS screw up frustrates me. When the Courts decided a periodic tenancy was a new tenancy most of us were already too late with re serving the PI.

Now it looks like repossessions are the way forward I've to re serve the PI's before a S21 can be served (again) correctly. Presented by a local lady, as my agent, both defer signing with excuses. Her word against theirs maybe so to be 'nearly' sure I should now post the same to them. Allowing 3 clear days for this and then 3 clear days for the S21 to arrive gives the gits another month to abuse.

As they both are now running arrears and have the potential to claim 4x the deposit I would imagine a court to effectively offset claim and counter claim causing me to lose the rents. Then there is the threat of the expenses I believe.

And aside from becoming a LL what did I do wrong?

This is where I am finding the council bond instead of a cash deposit is sooo much easier.

NO PI

NO CASH (DEPOSIT) CHANGES HANDS AT BEGINING OF TENANCY

NO WORRIES OVER PERIODIC TENANCIES

NO ABITRATION APPEAL PROCEEDURE

It is like the old days but you do need a half decent inventory in place.

[Melboy]

Or has anyone recieved their letter from the Queen?

Now that would seriously impress me and I don't impress easily, that a 100 year old landlord is writing and contributing to the forum with their expert knowledge.

All I need now is for RL to say he is indeed that person and shoot me down in flames.

Did you know that you have to write and inform the Palace that you are within 3 months of reaching your 100th birthday so the Queen can send you a card ?

[Richlist]

If I still have the strength, drive, interest & ability to manage a property portfolio at 100 years of age.....I'll be a very happy person.

Did you know that you have to write and inform the Palace that you are within 3 months of reaching your 100th birthday so the Queen can send you a card ?

What I find surprising is that one receives their £200 winter fuel allowance automatically BUT has to apply for a bus pass that, will, in all probability never be used.