Are prices due to crash?

[NessL]

Don’t worry to much about us BTL landlords. We can sell up without losing our homes.

I think few have expanded their portfolios since the chancellor slapped a 3% stamp duty surcharge on second homes and investment properties in 2016. Price rises 2016 to 2023 are likely to exceed any price drops.

A flat I bought in 2012 for £130,000 (£78,000 mortgage; £52,000 equity) is now valued at £300,000 (£78,000 mortgage; £222,000 equity), a quadrupling in equity.

In that time I’ve paid about £20,000 in mortgage interest, about £20,000 in maintenance, £5,000 in insurance and received about £145,000 in rent.

Yes, you can sell without losing your home, but let’s not forget that the tenants in your houses will lose theirs if you sell.

 

[Jay586]

And lots of landlords are selling by the sounds of it. Lots have moved into short-term letting, which is much less regulated and has a better tax situation. That takes out homes out of the housing stock.

I very much regard my tenants' homes as their homes and behave accordingly. It's sad if people don't.

 

[Elmo3]

But my point is how many BLT landlords are over leveraged, given the 3% stamp duty surcharge introduced in 2016 almost killed off new investment purchases?

In February 2014 (last time I bought an investment property) I had £745,000 of mortgage debt and an estimated 45% equity.

Today I have £290,000 of mortgage debt and an estimated 89% equity.

I expect most BTL landlords are in a similar position having both reduced debt and benefitted from rising house prices.

By slapping on that 3% surcharge George Osbourne has (inadvertently) done BTL landlords a huge favour.

Because many have remortgaged to buy more at inflated values, or spent the ‘free money’ on cars etc (maybe even Cali’s?), often interest only. When that goes from sub 2% to maybe 8%,+, that going to cause a problem. Don’t think capital values can’t reduce 30%+ for people who need to get out, prices are set on the margin.

 

[Perfectos]

I have watched this thread with interest since it started.

what is interesting is the speed markets take to turn.
Looking on the Calis for sales here and elsewhere, (I’m not buying nor selling )
some people seem to be asking unrealistic prices, (not just newer vans, which are an obvious target seemingly based on no more than a figure plucked from the air “a would like price“ or at least very optimistic, funnily enough those are the ones haven’t sold & are unlikely to Sell.

With cost pressure brings a reducing market (due to financial pressures, cost of living and housing etc).
I wonder how many current Cali owners, trying to sell, will miss the boat due to unrealistic current pricing, Only to sell laterally at a reduced rate, particularly When prices have receded further as the school holiday / summer market dry up (as it does every year).

The housing market will be no different, priced to sell, it sells, priced too high sits on the shelf and creates a perception by those looking that there must be something wrong with it or over priced and pass on by to look at realistically priced items, which will sell.
we’ve seen it before and were seeing it again.

evidence suggested the Major Building Developers are slowing operations down significantly (as in 2007) due to lack of sales / affordability, moth balling future projects. Sales will dictate the speed of construction, construction is the only major industry driver we have left in this country.

Tight Credit = smaller / slower market = lower selling prices, simples, regardless if it’s a house or a discretionary purchase.

IMO 5%+ Interest will become the Cheap Norm for the foreseeable future, as it was before the world financial markets went into life support mode in 2009.
the days of cheap money are so last generation, the days of affordability are bearing down On us all Again.

 

[Amarillo]

Latest update… price crash:

March 2017 (new) £42,222
March 2018 WBAC £28,730
March 2021 WBAC £30,315
May 2021 WBAC £34,505
July 2021 WBAC £37,270
August 2021 WBAC £36,150
October 2022 WBAC £23,810

New Year update

March 2017 (new) £42,222
March 2018 WBAC £28,730
March 2021 WBAC £30,315
May 2021 WBAC £34,505
July 2021 WBAC £37,270
August 2021 WBAC £36,150
October 2022 WBAC £23,810
January 2024 WBAC £20,240

 

[da_murphster]

WBAC = £20,240

Cheapest T6 Cali = £38k

Something is not adding up!

 

[Amarillo]

WBAC = £20,240

Cheapest T6 Cali = £38k

Something is not adding up!

High mileage. We’ve done 85,000 miles.

 

[JuanVecino2023]

New Year update

March 2017 (new) £42,222
March 2018 WBAC £28,730
March 2021 WBAC £30,315
May 2021 WBAC £34,505
July 2021 WBAC £37,270
August 2021 WBAC £36,150
October 2022 WBAC £23,810
January 2024 WBAC £20,240

That looks about right for an illiquid market.

 

[Californication69]

High mileage. We’ve done 85,000 miles.

7 years old in March 2024?
12k miles a year is 84k miles
Perfect mileage of 12k a year.

 

[B J G]

Most vehicles depreciate by a minimum 50% in 3 years so still good figure by comparison.

 

[OGII]

That price seems typical of a corporate buyer not desperate for stock at this time of year hoping that a desperate (or foolish) buyer takes them up on their silly offer. Be interesting to see what your Spring wbac offer will be.

By contrast when I ran our details through an insurance comparison site last month our December 2017 Beach had a suggested insured value of £41000 ish. That based on no mileage, spec details etc. Not particularly scientific but they must have based that number on something semi sensible.

 

[2haw]

With cars depreciating at a rate not seen for years, WBAC are only prepared to buy a bargain.

I’m sure it’ll be 25k again in a few months once things have settled.

 

[Californication69]

With cars depreciating at a rate not seen for years, WBAC are only prepared to buy a bargain.

I’m sure it’ll be 25k again in a few months once things have settled.

Up and down like a something somethings

 

[2haw]

Up and down like a something somethings

Are you referring 2haw drawers?

 

[Californication69]

Are you referring 2haw drawers?

Referring to the prices keep going up and down.
And yep

 

[pjm-84]

New Year update

March 2017 (new) £42,222
March 2018 WBAC £28,730
March 2021 WBAC £30,315
May 2021 WBAC £34,505
July 2021 WBAC £37,270
August 2021 WBAC £36,150
October 2022 WBAC £23,810
January 2024 WBAC £20,240

Wouldn't worry about it. LMAO when I did a WBAC valuation for our X545E the other night (due to Youtube clip saying about depreciation). WBAC had that at £38.5k at 15k miles and 20months old.

I put in an IDBUZZ First Edition , 1 year old with 8k and the WBAC offer was 43.3k......

 

[Amarillo]

With cars depreciating at a rate not seen for years, WBAC are only prepared to buy a bargain.

I’m sure it’ll be 25k again in a few months once things have settled.

I don’t think that depreciation is the best measure of loss of value.

In my opinion (and I know many will disagree) the difference between current value and a new replacement is a better measure.

We had a 14% discount on our high spec. Beach. In effect, we paid the list price of a naked Beach and had the extras for free (give or take a few hundred pounds).

A naked Beach 6.1 150 7 speed DSG list price is £61,442.

If the WBAC valuation is right (and I expect we could get more with a private sale), we’d need to find £41,200 to buy a replacement.

We have had Amarillo for seven years, so the cost has been £5,885 per year. By way of comparison, the mortgage interest on our home is £5,677 per year (2.49% on a £228,000 loan fixed for ten years, five years remaining).

Cars are not cheap.

 

[Amarillo]

Wouldn't worry about it. LMAO when I did a WBAC valuation for our X545E the other night (due to Youtube clip saying about depreciation). WBAC had that at £38.5k at 15k miles and 20months old.

I put in an IDBUZZ First Edition , 1 year old with 8k and the WBAC offer was 43.3k......

We are not selling.

We’d always said that Amarillo would be our ten-year-car. Possibly longer. We will hang on for as long as the boys (now 10 & 8) will camp with us

 

[pjm-84]

Snap. As we buy vehicles outright we're in the same situation and not tied to running back to the dealer when the PCP terms comes to an end. We have a 11 year Volvo XC70 , 2015 California, and a 2022 BMW X545e.

I might consider an ID Buzz at the expense of the Volvo ..... if the price is right!

 

[Corradobrit]

I might consider an ID Buzz at the expense of the Volvo ..... if the price is right!

Just don't buy new. Get a nice CPO that has already taken a sizeable hit.

 

[Amarillo]

Snap. As we buy vehicles outright we're in the same situation and not tied to running back to the dealer when the PCP terms comes to an end. We have a 11 year Volvo XC70 , 2015 California, and a 2022 BMW X545e.

I might consider an ID Buzz at the expense of the Volvo ..... if the price is right!

Cash is king.

I have tried hard to understand the financial benefits (to the consumer) of PCP and have miserably failed.

 

[CamperFam]

Price inflation and the cost of change / replacement is a killer.

The price of a decent spec'd Cali now is so much higher than it once was - arguably the Ocean contains more as standard, but even then, it's substantially higher.

We bought our Ocean used in 2020 for £56k (4 months old, 2k miles). Right now its valed at £54k by Motorways meaning we've lost £2k in value since purchase in June 2020.

To get the same spec now, we'd be looking at £75k via DTD.

The price inflation over the past few years is painful - softened only by the market saturation.

 

[JuanVecino2023]

WBAC = £20,240

Cheapest T6 Cali = £38k

Something is not adding up!

Wouldn't worry about it. LMAO when I did a WBAC valuation for our X545E the other night (due to Youtube clip saying about depreciation). WBAC had that at £38.5k at 15k miles and 20months old.

I put in an IDBUZZ First Edition , 1 year old with 8k and the WBAC offer was 43.3k......

I would say that is about bang on the money for an ID Buzz 1st Edition.

I put my name & money down day one the ID Buzz was announced in Volksworld

 

[CamperFam]

Cash is king.

I have tried hard to understand the financial benefits (to the consumer) of PCP and have miserably failed.

Impatience. And I say that being on a PCP deal ourselves.

We had a tough decision when we got ours - if we waited, we'd have been hit with C-19 inflation. So one way or the other, it was going to cost. We decided to take the cost hit and enjoy the Ocean as soon as possible, rather than wait, stack some more, and still take the financial hit with the cost increases.

 

[Amarillo]

Impatience. And I say that being on a PCP deal ourselves.

We had a tough decision when we got ours - if we waited, we'd have been hit with C-19 inflation. So one way or the other, it was going to cost. We decided to take the cost hit and enjoy the Ocean as soon as possible, rather than wait, stack some more, and still take the financial hit with the cost increases.

I haven’t had many cars in my life.
1992 Ford Orion B332TKN £1200
1994 Peugeot 309 G251UKJ £3000
2003 Peugeot 406 V515MMV £6000
2013 Peugeot 5008 KP62CDK £11,000
2017 Amarillo £42,222
2019 Skoda Citigo £9,000

The 309 and 406 were brilliant cars. The Orion was a lemon. And I never liked the 5008.

I wish I could remember how much sold each car for.