The Property Boom of 2012

The Property Boom of 2012

10:13 AM, 30th November 2011, About 12 years ago 21

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Landlord’s Log, the Personal Blog Of Mark Alexander, the Founder of Property118

** I was so shocked when I received this commentary last weekend that it has taken me until now to decide to post it. The following was sent to me as an email by a person who prefers to remain anonymous for obvious reasons. The commenter has not responded to my numerous emails. Is this a joke? I have decided to share it with you because; frankly I was flabbergasted and wanted to see what you have to say. I’ve decided to give this poster a name and a picture and in a strange sort of way I hope he will be back to entertain us all again with his responses to your comments. The name I’ve given to him (at least I think it’s a him) is “The Banker”. The following is what he had to say …

The Banker

I knew that title would catch your attention.

One mans misfortune is another mans opportunity, mine!

You and your highly leveraged buy to let pals are all like lemmings heading towards a cliff, oblivious of your fate.

Well here I am, to warn you of your fate.

I’m not the only one hoping that the next boom will in fact be an implosion in terms property values, you call it a property crash, it will be the making of the likes of me. The chaps on that House Price Crash forum are doing me a big favour by talking up the next crash.

Bring on the great house price crash of 2012 I say!

It’s those of you with highly leveraged buy to lets that made the HPC mob so angry and they want to see you crash and burn. I hope their wishes come true, it will be bloody marvellous for me, crap for the economy, but what do I care?  The HPC mob all think it will be their armageddon, fooled into the belief their kids will be able to get on the property ladder. They have a shock coming too. They’ll have a hard job unless they have a Dad like me or my drinking buddies because the lenders will have shut up shop and interest rates will rocket to keep the banks afloat. You watch the FSA allow the banks to change all your mortgage terms, mark my words. You all think you are safe on your Mortgage Express base plus 1.75% deals don’t you? How safe will you feel when they are allowed to increase your margins to base + 4%?

I made a fair wedge off inverse ETF trading off the back of my last banking bonus which was well earned given the cr@p I have to deal with.

I’m sat with about £20 mill cash and so are lot’s of my buddies at my local wine bar.

Whilst all you buy to let mugs are selling up for whatever price you can get we’ll be snapping up all those so called BMV’s off your trustees in bankruptcy for 50% or less of what you paid for them.

We might even decide to rent one of the smaller units back to you if you can find a home owning guarantor who can pass a credit test. You won’t pass a credit check, obviously!

Have no doubt, you will need to rent because you’ll all lose your homes and need somewhere to live, just like everybody else who leveraged their properties over the last 10 years. If you don’t pay what, I’m sure you’ll bleat on about being the extortionate rents, I’ll be charging then I’ll take your guarantors properties too. Fancy a game of monopoly with me?

Best of all, I’ll be one of the elite few in a position to buy. I’m reckoning on 20% returns based on the prices I expect to pay and the demand for my properties. The rest of you can just take up squatting in a boarded up house, which I believe is now illegal in the UK, or take your choice between a tent, a caravan or living on the streets 🙂

If you think these affordable housing schemes will bail you out, forget it. The country will be in such a mess they will never be built and neither will any new homes because the builders will either go bust or won’t build because it won’t make financial sense for them.

I’m also looking forward to those bloody foreigners b”ggering off back to their home countries, it will be better for them than staying here, that’s for sure.

Viva 2012, let the games begin 🙂

Sent from my iPhone

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10:46 AM, 30th November 2011, About 12 years ago

Sounds like a jealous idiot to me.

12:22 PM, 30th November 2011, About 12 years ago

History has proved this Guy right, Entreprenuers make money when the economy changes they make money on the way up and on the way down.
Put yourself in the position where you can also take advantage of the deals He talks about.

john lown

12:45 PM, 30th November 2011, About 12 years ago

The 'banker' makes a relevant point about being over leveraged, but his manner is arrogant.
If there is sufficient cushion (equity to loan ratio) A few points rate rise can be absorbed, if no cushion - potential disaster.


13:20 PM, 30th November 2011, About 12 years ago

The leverage point is correct but base rate won't rise until the econemy can withstand it which will not be for a couple of years yet. When the econemy is growing and the time comes for base rate to rise then there be a rush of people buying property including 1st time buyers to take advantage of the cheap rates before base rated rises to far which will be the start of the next property boom. As for the FSA giving banks permission to change the terms and conditions of all the original mortgage aggreements allowing them to increase the rate about base that we are paying I find to be complete rubbish and wishfull thinking on this bankers part! He is obviously one of the many out there who is just talking down the market in the hope of making money of the next property crash. Also from his attitude he seems to have something against buy to let investors which is why he is emailing this load of b******t.

13:20 PM, 30th November 2011, About 12 years ago

Well that's the best laugh I've had in ages!Clearly 'the banker' has a thorough knowledge of the property market. I suspect the arrogance and sweeping generalisations are geared to make us think, not least to generate a lively discussion. I hope they do. Lets hope he doesn't choke on his glass of Chablis! 🙂

15:41 PM, 30th November 2011, About 12 years ago

But as has been mentioned in the other thread, a fall in house prices only affects a BTL landlord if s/he has to sell. Otherwise, the tenants still pay the rent and the mortgage will still be paid regardless. I am in this for the medium to long term - I'm not ready for retirement yet! Besides, it's a major assumption that all BTL landlords are over-stretched - I'm not. I'm hoping to get my second BTL in 2012 and I won't be doing that on a wing and a prayer; it makes solid financial sense and will be great for my portfolio.
I get a mental image of this 'banker' (it's not rhyming slang for nothing, you know..) as he twirls his moustache and goes mwahahaha. There will always be people like that - greedy, arrogant, selfish folk. Some refer to them as the 1%.

15:41 PM, 30th November 2011, About 12 years ago

I think there is a lot of truth in the post.

The global economy doesn’t look like improving in the short term and there seems a strong possibility that UK and its trading partners will dip back into recession sooner rather than later. The consequences of this will be higher unemployment, increased borrowing costs two major factors that will affect landlord’s ability to lend and meet their buy to let commitments. After all, if you have to pay more to borrow, and your tenant can’t afford to pay the rent how are you going to pay your buy to let mortgage? So in the short term common sense would predict a fall in house prices, but long term UK house price trend looks bullish due to high demand and lack of supply

Also as I society I believe we are regressing to a point where only the very wealthy will own land and property, back to the Downton Abbey days.

Mary Latham

15:49 PM, 30th November 2011, About 12 years ago

In my opinion this post makes several important points
1. No one knows the future – if they did they would be too busy spending the money that they made from the information to have time to post on internet
2. All businesses should position themselves safely in difficult times and should make certain that their ambitions do not outweigh their ability to service their borrowings
3. All businesses should plan for the worse case scenario and have a sinking fund
4. There may be a plentiful supply of customers but have those customers got the ability to pay
5. Do not push your customers into financial difficulties just because demand is greater than supply
6. Make sure that you are not forced to sell at the bottom of the market
7. If you have surplus funds now might be a good time to buy
8. Spread your risk over several client groups
9. Invest in your product while the cost of doing so is low due to a surplus of tradesmen and “sales” offers from suppliers
10. Offer the best product at a fair price and go fishing where the fish are biting
11. Treat your customers with respect and keep them happy
12. Plan for the long term and KNOW your business, keep up with legislation and regulation that might have an impact on your bottom line

I wonder where that wine bar is? I would like to see if they are banging their heads on the ceiling while sitting on piles of £20m in cash. A bad headache can make a person very grumpy

Mary Latham

16:12 PM, 30th November 2011, About 12 years ago

I have just read this and thought it worth adding to the discussion

New data from the Bank of England suggests that house owners are focusing on repaying their mortgages as part of their efforts to reduce debt.

Consumers are concerned about the state of the economy and their incomes are under pressure from pay freezes, rising unemployment and high levels of inflation.

These pressures, together with falling house prices, are contributing to a trend for households to cut spending and reduce their borrowings.

A record £9.1 billion of mortgage repayments were made in the second quarter of year, representing 3.5% of households’ post-tax income.

17:21 PM, 30th November 2011, About 12 years ago

Sadly, however obnoxious this person may be, and regardless of whether he really is as wealthy as he portrays himself, I am quite certain that there are plenty of people in exactly his position. They are the people who really run the world and control (or manipulate) economies for their own ends. They are untouched by any crisis and as someone else said, they can benefit from the ups or the downs. They are independent of political parties or national loyalties, despising all equally, and are the nearest thing we have to true parasites. They serve only themselves, produce nothing of value, and the world would be a better place without them. Nevertheless, these people WILL be the landlords of the future, as they were in the past, before the appearance of the BTL mortgage democratised the process to a small extent and enabled ordinary working people to become landlords, providing for the most part, decent homes to a variety of tenants, people like themselves, while hopefully supplementing their own meagre wages or pensions. This EU legislation, if passed, could well precipitate a situation not dissimilar to what he describes. Our numpty legislators may not see it coming but people like him do, and they just need to watch and wait , maybe giving a wee push in the right direction here and there. Our 15 minutes in the sun could be snatched away to the casual amusement of these types as they mop up the proceeds with their limitless virtual money. It would be quite nice if they did choke on their chablis, but it won't happen.

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