50% drops by 2011

IveSeenTheLight

stevetodd wrote: »

Do you really think he earns about £229,000 a year then

No, he only works 25 days , 36 at a push.
Don't want to be hitting that high tax bracket now do we

stevetodd

RDB wrote: »

Do you really think that if prices fall by about 50% rents will stay the same or even go up as Steve Todd tries to say?

If you think that you dont understand the word recession.

How can you say if you are getting a yield of about 4% and when house prices drop 50% you buy another one then your yield will be 8% yay. Or you could live on planet Earth and know that in recession everything comes down profits, rent, house prices everything.

Anyway your figures are deceptive, Steve Todd the whole point of what Im saying is even if you have profitable yield now, Im saying that when house prices half and rents go down at the same time as mortgages going up and getting very expensive. Then even if you bought a BTL at 50% of what it was, its still not really worth it the way the future is.

All due respect though Steve Todd I know you are more experienced than me being a surveyor and all, but also because you own 4.5 odd BTLs of course you dont want to believe your portfolio is going to be worth half. Had you thought about trying to sell quick now for whatever you can get before they are worth 50% less?

With all due respect I don't think you have undertsood anything I have said. For starters I would not touch a property with only a 4% yield, where did that figure come from? It seems obvious to me that you have not understood the quite simple figures I layed out for you, I don't know why it seemed simple enough to me.

Rents will not go down in the areas that I have bought in, at worst rents might be sticky then pick up again, but they will not fall.

With regard to the capital values, I do not believe they will go down 50%, I have no intention of selling they are providing me with very good rental income. I intend to buy more when prices come down by about another 15%. I don't think that will be the exact bottom, but I do think it will be within 10% of the bottom, I will not be buying based on the bottom I will be buying based on a good investment that stacks up.

MrDT

stevetodd wrote: »

Rents will not go down in the areas that I have bought in, at worst rents might be sticky then pick up again, but they will not fall.

This sounds an awful lot like "house prices won't drop in my area".

How come? Good schools? Lots of people working in the oil industry? The only busy port in the UK?

stevetodd

MrDT wrote: »

This sounds an awful lot like "house prices won't drop in my area".

How come? Good schools? Lots of people working in the oil industry? The only busy port in the UK?

Simply because house prices are falling, so those not buying will be renting, the rental market flourishes in London during house price crashes, albeit slightly dampened by the recession. Look at what happened in the 90's recession in London.

neverdespairgirl

chucky wrote: »

i imagine you're probably talking about Isleworth as I don't know what goes on there but see here, rents are doing fine

Here in WC1, rents are the same in £ terms, or slightly less, than a year ago. So down in real terms.

IveSeenTheLight

neverdespairgirl wrote: »

Here in WC1, rents are the same in £ terms, or slightly less, than a year ago. So down in real terms.

Good landlords may wish to hold on to good tenants therefore willing to leave the rent the same. I know I only put my rents up between tenants. Possibly after 5 years I'd look at the market figures, however......

You say the rent is down in real terms because the figure has remained the same, in my instances, even though one of my properties rent has remained static for nearly two years, in real terms the same figure is paying off more of the capital of the mortgage than it was two years ago.
Therefore every month I have a tenant on the same monthly rent, relatively I'm paying less interest and more capital off

IveSeenTheLight

neverdespairgirl wrote: »

Here in WC1, rents are the same in £ terms, or slightly less, than a year ago. So down in real terms.

If house prices are coming down and rents stay the same, Rental Yield goes up
Statistics are a funny old game

stevetodd

IveSeenTheLight wrote: »

If house prices are coming down and rents stay the same, Rental Yield goes up
Statistics are a funny old game

Are you sure RBD doesn't seem to think so

markelock

surely if capital values go down by 50%, we'll see an influx of people posting their keys back to the mortgagors?

we're assuming banks still aren't lending freely in 2 years, because as soon as they do, people will start buying houses at values which will appear attractive to them.

stevetodd

markelock wrote: »

surely if capital values go down by 50%, we'll see an influx of people posting their keys back to the mortgagors?

we're assuming banks still aren't lending freely in 2 years, because as soon as they do, people will start buying houses at values which will appear attractive to them.

yes and in the case of investors at rental yields that appear attractive to them,