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Will Rising Interest Rates Crash The Property Market?

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Will Rising Interest Rates Crash The Property Market?

Will Rising Interest Rates Crash The Property Market?
With Parmdeep Vadesha, David Kemp & Ranjan Bhattacharya


Event: The Baker Street Property Meet (Monthly networking event)
When: Wed, 28th Feb 2018, 6pm to 10pm
Where: Holiday Inn, Carburton Street, London W1W 5EE
What: Will Rising Interest Rates Crash The Property Market?
With: Parmdeep Vadesha, David Kemp & Ranjan Bhattacharya
Places: Tickets are selling fast and are limited to 200 seats.
{Just 83 Places Remain)
Book now to avoid disappointment! >>>


As interest rates rise, the rules of the property game will change completely.

  • What will happen to property prices in 2018?
  • What will be the impact of rising rates on property development projects?
  • How you will need to look at commercial property opportunities differently?
  • How to exploit planning and permitted development opportunities when interest rates are rising.
  • Who will be the winners and losers of the ‘pot-puri’ of recent government intervention in the property market combined with rising interest rates?
  • How will you adapt your investment strategy?

Join us this month as Parmdeep Vadesha, David Kemp and Ranjan Bhattacharya provide answers to these burning questions.
For More Info and Booking Visit Our Website >>>




Details

Date: February 28
Time:
6:00 pm - 10:00 pm
Cost: £20
Get Event Tickets

Venue

Holiday Inn Carburton St
Carburton Street
London, W1w 5ee United Kingdom

Comments

Last few seats available. Lots of people interested in hearing Parmdeep Vadesha talk on succeeding in property in a climate of rising interest rates.

Book now >>> http://www.BakerStreetPropertyMeet.com

H B

5 months ago

Of course rising interest rates are not going to crash the market - they are not going to rise enough to threaten the solvency of the average borrower, BTL or otherwise.

Daniel Holder

5 months ago

Ah but yields are so low in many Uk cities I can see plenty of people selling up if borrowing costs continue to increase. Some landlords are only getting 3% in London and now with falling capital values. Not good. An increased rate for savers and many amateurs will just stick it in a 4% bond rather than look at property which is coming under increased regulation, fees and taxes.

Ken Smith

5 months ago

Reply to the comment left by H B at 02/03/2018 - 17:58
They could do though...

moneymanager

4 months ago

Will rates rise, by much? There are more and more deals coming on stream while demand looks lacklustre, where is the upward pressure coming from other than BoE talk?

Ken Smith

4 months ago

Reply to the comment left by H B at 02/03/2018 - 17:58Why will they not rise too much?
If they rise by another 3% then that will mean desperation out there.
Not just BTL but residential mortgages too.
Joe Public with a 250k residential mortgage (not uncommon) will have to find another 7.5k per year (£625 monthly). For a 40% taxpayer that means it will take a 12k chunk out of their annual salary before tax. Not many can handle that.
By studying reports of peoples' savings, it's obvious that the majority would be in trouble. It would be total carnage from that point on.
The UK has been conditioned to think low interest rates ar the norm. People aren't in a position to handle rises of even 3%.
For many landlords, a rise of 3% would take them out of the game rapidly. I bet not many have been squirrelling away the windfall profits they didn't expect to get prior to 2009. they will run out of the oxygen (cash) needed.
Those bonus profits will have been blown-in on luxuries I'm betting.
The government and B o E know this far better than me. For that reason I think the rates will probably be engineered to stay low. Any government in power if the above scenario happens will be soon evicted.
I think the news of rises is a shot across the bows of UKPLC as a warning. Yes there will be some rises no doubt.
As elsewhere stated on P118, I'm getting out anyway and can comfortably absorb rate increases. However, prices would plummet if the above happened.
On top of all the other negative issues brewing (and happening) - another good reason to get out sharpish.

Monty Bodkin

4 months ago

"For many landlords, a rise of 3% would take them out of the game rapidly. I bet not many have been squirrelling away the windfall profits they didn't expect to get prior to 2009. they will run out of the oxygen (cash) needed.
Those bonus profits will have been blown-in on luxuries I'm betting. "
Sounds like wishful thinking for a crash.
Even if you are of the opinion landlords are all feckless spendthrifts (the ones I know are tightfisted gits, frugal with their hard earned), circumstances have protected them. For most landlords, as a condition of lending, their loans will have been stress tested to easily withstand a 3% rise. Most pro landlords stress test themselves much higher than that.
Added to that, rents have increased and look set to rise further and LTV's have dropped due to house price rises.
Now the political attacks OTOH...

Ken Smith

4 months ago

Reply to the comment left by Monty Bodkin at 08/03/2018 - 12:24
Monty, you might think it is wishful thinking for a crash - but not on my part - just my honest thoughts. All the signs are there.

Although, yes if there was to be a crash there would be another massive opportunity like in 2009/10/11. I would, instinctively, be tempted to take advantage - but I dont have the appetite, or need, any more.

Also, Monty I didn't say 'ALL' landlords either - I said 'many'. You misquote me.

Your landlord associates are probably astute like yourself. Human nature means that we all tend to associate with like-minded people. That's probably why you dont know many idiots. I would wager for every business-like landlord, there are 2 idiots out here who are already sailing close to the wind and not thinking about the impact of rising rates.

I agree that professional, frugal landlords will probably be ok - but many reckless ones will crash and burn no doubt.

Monty Bodkin

4 months ago

Reply to the comment left by Ken Smith at 08/03/2018 - 15:37
I would wager for every business-like landlord, there are 2 idiots out here who are already sailing close to the wind and not thinking about the impact of rising rates.

You'd lose your wager Ken;

https://www.cml.org.uk/news/press-releases/cml-research-survey-of-uk-landlords/

According to the survey of 2,500 landlords, some 49% of respondents owned all their property outright, with no mortgage debt at all.

Ken Smith

4 months ago

Reply to the comment left by Monty Bodkin at 08/03/2018 - 16:11
Actually you chose to read what you wanted to see. It goes on to illustrate that most properties to let are mortgaged.

Lies an statistics.....

10 landords 99 houses

(9 landlords) 90% of the 10 have 1 property each and all not mortgaged...9 houses not mortgaged

10% of landlords (1 landlord) has 90 houses all mortgaged

So 90% of the houses have mortgages

Yet 90% of the landlords have no mortgage

Back to the drawing board my friend... 🙂

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