S.B.B: Sarah Beeney's Back. The popular TV show Property Ladder has returned. Now, it's called Property Snakes and Ladders (currently on Tuesdays, Channel 4, at 8pm). Presenter Sarah Beeney started the show by giving a brief talk about the last few years of the series, and how previous developers made big mistakes, but simply because the market was rising, they made tremendous profits regardless. Now, in the current economic crisis, developers are crashing and burning.
On last week's show, developers borrowed significant amounts of money from their parents in order to get their developments underway. This reminds me of a builder who told me years ago that when doing property developing for the first time, the hardest thing is raising the initial finance.
The banks will not lend money like they used to. Even if a buyer wants to buy a house that is beyond their means, as soon as they go to the bank to get a mortgage, they will be unceremoniously shown the door.
Beeney also said at the end of the show, that once bank interest rates rise, all those who are renting out their properties until the market goes up will be hammered by the banks, and will be forced to sell prematurely due to higher mortgage payments. House prices can only go down, ( I believe prices will fall until 2012), so there is no way I'm considering buying now.
Speaking of property ladders, I remember that TV show "Property Watch" which showed a section about a man who steadily climbed the property ladder from a young age. He then overstretched to buy a large stately home and now his careful plan has come crashing down, purely due to taking on additional risk.
Property is an interesting financial vehicle, and depending on how much risk you take on, and the state of the market, you can end up riding a snake or a ladder.
On last week's show, developers borrowed significant amounts of money from their parents in order to get their developments underway. This reminds me of a builder who told me years ago that when doing property developing for the first time, the hardest thing is raising the initial finance.
The banks will not lend money like they used to. Even if a buyer wants to buy a house that is beyond their means, as soon as they go to the bank to get a mortgage, they will be unceremoniously shown the door.
Beeney also said at the end of the show, that once bank interest rates rise, all those who are renting out their properties until the market goes up will be hammered by the banks, and will be forced to sell prematurely due to higher mortgage payments. House prices can only go down, ( I believe prices will fall until 2012), so there is no way I'm considering buying now.
Speaking of property ladders, I remember that TV show "Property Watch" which showed a section about a man who steadily climbed the property ladder from a young age. He then overstretched to buy a large stately home and now his careful plan has come crashing down, purely due to taking on additional risk.
Property is an interesting financial vehicle, and depending on how much risk you take on, and the state of the market, you can end up riding a snake or a ladder.
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