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It's certainly interesting times in the property market at the moment. Lots of uncertainty and varying opinions on how it is all going to pan out. There is talk of interest rate rises, a property "crash", and other negative happenings.Here are my views on the winners and the losers in the property market going forwards in the near future:WinnersCash buyersThose that keep their powder dry and seek out opportunityThose that have an equity buffer or cash bufferThose who have a Plan A, B, and C.LosersDevelopers who have stock coming to marketPeople who have purchased off-planThose looking to buy, refurb, and sellThose who sit and wait to call the bottom of the market.Anyone in negative equity and/or negative cashflowThose with large portfolios of low value propertiesThose who need to sell urgently or sell with vacant possessionThose who don't crunch their numbers properlyThose who do not take advantage of the very competitive mortgage rates we are currently enjoying.Those doing R2R SA and SA as demand drops off a cliff or prices have to be dramatically reduced to fill rooms.Those with no Plan B.There has been an interesting article this week about how developers must have another exit strategy other than sale:Andy Reid, director, intermediary and network at Oblix Capital, said:“We have noticed a trend that, while the prime units on a development are often sold quickly, there may be others that are hard to sell and, if an alternative solution isn’t found, a developer could be subject to default interest on the development loan – which can be very expensive.
“Developers who find themselves in this situation have a number of choices.
“They could refinance to retain the properties to rent out themselves, aim to sell to investors as a buy to let, or arguably the quicker and easier option is to buy themselves some extra time to sell the remaining units, with a development exit bridge".Full/source article If interest rates go up, it will hit smaller developers first, as their margins will be slimmed even further due to higher borrowing costs. Cash buyers will take advantage of securing deep discounts from distressed smaller developers and those who cannot sell.My list was non-exhaustive. What would you add to my two categories?SEE ALSO - 2020 recession - preparing for the next crashUP NEXT - Crashing out of EU good for property market?DON'T MISS - In the event of a crash - your survival plan?NOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
"LosersThose looking to buy, refurb, and sell"
ive gotta disagree on this point, the downside of uncertainty at selling point is offset by the advantage of reduced buying price
It's fine to disagree! For clarification though, I meant people who purchased a few months ago with the intention to sell in a few months time. I fear they may struggle without significantly dropping the price, but of course, that is only my opinion and happy to be proved wrong. All speculation on my part based on things I have been hearing from people who's opinion I respect.
But prices have been going up - at least they have around here. Unfortunately they have dropped where I was selling.
I don't think your opening post considers the geographical variations. For example, after selling my southern property I will have 10 rental properties. The highest valuation is £180k, so that might be considered a large portfoli of low value properties by southern standards, but I don't see any reason why I should be a loser.
The point of my post was to spark commentary to tease out the real winners and losers - I just shared my thoughts to get the ball rolling. Of course the UK is made up of thousands of micro-markets and sweeping statements can therefore never be made.
theyre the people im looking to buy off
Slowly working towards financial freedom
I was thinking less than that. I went to Belfast last week to spend some time with Landlord Debt Advisory and they said that nearly all landlords in distress due to Section 24 were coming from the North. They were landlords with low value properties in poor quality areas. This somewhat goes against the various claims that highly leveraged landlords in the south east would be the ones who were most affected ....My belief is that poor quality areas and poor quality stock always suffer the most during any down turn, but that is just based on anecdotal evidence and my own 15 years of owning rental properties in both the north and the south east ...