Do You Expect House Prices To Increase In Over The Course Of The Next 12 Months?

tomstickland

The poll suggests that the posters are not far off 50:50 in their views.

kinster_2

tomstickland wrote:

Varous interest rates, I haven't caculated the overall average, but I guess that it's just over 4% after tax.

I've just done a rough and ready sum and it's come out at 5%.

IMHO I think people nowadays will need to do more than save, they will need to take a bit more risk and be creative to raise capital. You will also need to calculate the rate of inflation and subtract it from your 4% after tax.

kinster_2

tomstickland wrote:

The poll suggests that the posters are not far off 50:50 in their views.

I was talking about some of the comments on the forum.

nmiah786

tomstickland wrote:

The poll suggests that the posters are not far off 50:50 in their views.

Sorry to be complacent but the poll shows 55.86% against 44.14% at the time of my posting, not 50:50.

Please stop minupilating statistics thats right in front of your eyes.

Ian_W

That's right, nmiah, you tell him :mad: .

It's a 60/40 split by my reckoning anyway, Tom - if you allow for seasonal adjustments!! :snow_laug :j

tomstickland

Whatever the numbers are they are closer to 50:50 than 100:0.

I'm not manipulating them etc.

IMHO I think people nowadays will need to do more than save, they will need to take a bit more risk and be creative to raise capital. You will also need to calculate the rate of inflation and subtract it from your 4% after tax.

My overall net rate is 5%, a reasonable step ahead of inflation. At the current rate of saving the money then I can have a 20% deposit saved within the next year.

I am about to start some investments too.

In terms of return, breaking up cars does me well £50 invested and a £600 return. But I have to do the work....

roswell

Im very confused and sorry to use school boy maths but if you get a 95 K morgage on a 100 k property and your paying 5% apr, if the house value is going up by 3% your actualy paying a loss or have I missed something ?

I agree properties are over priced and have been for a long time I would value my property 25 % over priced for the value I would pay for it in real money but if buyers are still paying high prices the market will keep growing.

Personally I voted a drop in prices, in the North East I have been watching some £100 K properties sit on the market for months and the asking prices are now dropping to the 85 k or less mark. And there still not moving.

Kenny4315

Pal wrote:

I am guessing that the arguement is that, if a house has been bought using a fairly large amount of gearing (a mortgage), and house prices "only" go up by 3% p.a., then house owners are more likely to make a profit by hanging on for a few years than selling immediately.

The discussion was entirely around an investment decision. My view is that any sensible investor would periodically see which investment represented the best financial option. While the opposing view is that BTL's would simply sit it out and simply hope for the best. If the market dropped by 10% as was the scenario, then 5 years of 3% gain (was predicted). What would you do.

My view was and is that once the the drop was established BTL's should review the position, and obtain the best financial option at that point in time, (ignoring any previous costs or revenues, as sunk), many will have no option having high levels of debt. The opposing view was they'd sit it out for 5 further years, even if they are under financial pressure, and could not afford to sell.

If a 3% increase was predicted then an investment appraisal should be undertaken against that and other investment types, and the best option should be taken.

In my view however, if there was a 10% reduction should see mass panic, not a 3% rise pa annum for 5 years, there would be further heavy losses, and a chain reaction, and who knows what the end position would be.

I read a report on debt the other day, and it is mind blowing the amount of UK debt, this is the factor that will bring things to a head, it is at an unrealistic and unsustainable level. Much of this borrowing has been remortgages and spend, often on houses overseas and BTL investments.

Edit : Incidentally I am not one-sided I have had BTL's in the fairly recent past, and will probably have them again, I have finance arranged for a substantial sortee into the market when the time is right, which it is not at present. I like to buy low and sell high not buy high see a drop then maybe a recovery, etc, etc, etc. I have also done some development also, but again this is not so easy now or in the near future.

rozeepozee

All these comparisons have given me a headache Personally, the problem with my BTLs is that if your property is tenanted, selling is potentially costly. I have one BTL that my instinct says I'd be better off without now. It's a two bed in a "luxury city" development that I bought for £110K with an 80% mortgage five years ago. Last Summer I reckon it was worth about £170K (similar flats have been selling for around £175K in the last 6 months and are currently being advertised with EAs at this price), but it's showing its age and there are plenty other shiney new developments with flats at that price. The money I pocket after expenses isn't bad seen as a return on my original investment (11%) and if the property market goes up, albeit slowly, I've got the capital return as well. I have a very good tenant in there. If I tell him I'm selling, he's likely to move on and then I might be sitting on an empty flat for.... who knows how long? Although I may live to regret my decision if the housing market goes into decline, selling is a hassle I can do without

markrrowe

nmiah786 wrote:

Sorry to be complacent but the poll shows 55.86% against 44.14% at the time of my posting, not 50:50.

Please stop minupilating statistics thats right in front of your eyes.

Sorry, Newbie poster here.
I can't see what is in front of your eyes !
How do I vote, and where are the result %'s ?

CANCEL THAT !!

as soon as I clicked 'post', my browser went straight to it !

Doh !