More Gloom - dont Banks realise to get out of the problems they are in they need to lend money. If they dont lend money otherwise prices will fall and send investors/homeowners to the wall and the risk of default sky high.

Basic Economics

The BoE reported today that mortgage approvals fell to 36,000 in June from 41,000 in May, a third of the level a year ago and the lowest since comparable data were first published in 1993, according to the FT. “In June, mortgage lenders extended £3.1bn net new mortgage credit to households. This level of net lending was half the rate in the previous six months and brought the annual growth in net mortgage lending down to 7.5 per cent from 8.2 per cent in May. Net mortgage lending had been growing at double-digit annual rates for the whole period between December 2001 and December 2007.” Rates are not coming down proportionately to the key benchmark rates.

if you want to read more please visit Rockefeller Treasury Services

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Damian George

Buy Euros - Best Euro Rates

that shropshirehouse site thats selling tickets could sort out one person's housing problems
£15 a ticket

Another update on the unfolding crisis:
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LONDON (MarketWatch) -- The average British house price saw a monthly decline of 1.9% in August, mortgage-lender Nationwide reported Thursday. Prices have fallen by 10.5% compared to August last year, marking the first double-digit decline in the annual rate since the fourth quarter of 1990, Nationwide said. Consensus expectations were for a 1.6% monthly fall and a 9.9% annual decline, according to a Dow Jones Newswires survey of economists.

One way to invest into repossessed properties is through a collective investment vehicle which makes it suitable for pension investors e.g SIPP or SSAS.

The lending is done throught the fund which is non recourse to the individual and does not affect any of the individual's credit rating or ability to gain finance in the future.

Typically a fund or private property syndicate that raises £1.6 million can purchase upt to £5million worth of repossessed property and gives a nice hands off investment into the current market.

I believe we have another 6 months of opportunity before things start to stabilise and pick up.

Tony

Let s say you bought a BTL 2 years ago for £200K at 95 LTV, 5.5% fix for 2 years, rents just break even (around £1000pcm, which is a 5% yield, standard for year 2006...)

Let s say the market has taken a plunge of 15% (which by end of year is a near sure thing).

Then when your mortgage gets to expiration of the 2 years, you have the choice between:

- remortgaging : today s best rate is around 7% for 75% LTV ; new value of property = 170K ; new possible mortgage = £127,500 ... OUCH !!! you have to find around £70K to be able to remortgage the exact same property as 2 years ago... so you surely don't !!!

- continue with this mortgage : yes but it has shoot up because BoE+1.75, so now it s 7.5%, which is 2% more, which is basically more than £300 more than the previous arrangement...

Conclusion: you have the choice of having to fork out £300 each month to subsidise your tenant in the property (that is when you are lucky to have a tenant) or to sell and take a hit of around £35K... Well, it may not be good times to burn £300 a month, and many new-landlords may just find it impossible to cope with, and sell...

Conclusion of the conclusion: in the coming 24 months, I would not be surprised to see massive sell out of recent BTL buys... which will make the property market plunge even more

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Best free availability calendar on the web

but still its noted as the best place for investment, its just because of the economic slow down over all i think the market is not that bad compared to the rest of the world

Hi All,

Just to dump more gloom on this topic

The Council of Mortgage Lenders reports that Sept lending fell 16% m/m to a mere £17.7 billion, the lowest gross lending number since Jan 2005. Rightmove says home sellers reduced their average asking price by 4.9% y/y in October. They tried to raise their prices by 1% over Sept, but it didn’t work. The year-over-year drop is the biggest drop in the history of the survey.

The Ernst and Young ITEM Club says the UK economy is already in recession and will contract by 1% in 2009. Worse, it will contract for another three quarters before bottoming out in the second half of 2009.

for the full story visit Barbara Rockefeller's Currency Blog

__________________


Damian George

Buy Euros - Best Euro Rates

Gordon Brown has shaved 2.5% off the VAT - this should save the property market!!!!

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Damian George

Buy Euros - Best Euro Rates

Hi, it's my first time on this forum so I'm a little unsure of how it all works. Apologies if I've come through the wrong channel.

I'm moving from Auckland, New Zealand to work for my employer in London for the next 5 years commencing April 2009. Probably living somewhere in Oxfordshire and travelling to work in Slough, West London.

My wife and I own 2 houses in Auckland with a loan to value ratio of 66%. One is negatively geared whilst the other is cashflow positive. Total value of properties is 1.2million NZD (ie.425,000 pounds). Total borrowings are 810,000 NZD (ie. 287,000 pounds).

We have an overdraft loan available from our NZ bank of 60,000 NZD (ie. 21,000 pounds).

It seems cheaper and smarter to take on a mortgage given our 5 year stay in the UK rather than simply renting. The monthly payments are similar but will it be a difficult exercise trying to obtain a mortgage if we can only put down a 5-10% deposit?

Could we even find anything around 200,000 pounds in one of the villages in Oxfordshire?

My UK salary will be 40,000 pounds per annum and my wife is an ESOL teacher and would probably work part time (ie. 10,000-12,000 pounds per annum).

What would you suggest?