Is there going to be a scramble for properties????

RainMaker_2

BTL is one investment where you've got to take a long-term view, 10 years+ IMHO. Those that thought it was a gravy train are hurting now.

Now is certainly a better time to get into BTL than it was last year. Will next year be better than now ? Who knows. Fact is nobody knows, nobody. But if you can avoid the BTL rip-off mortgage rates by paying cash that's not needed for 10 years, and get 5% yield or more it's still a bloody good investment.

confused31_2

mbga9pgf wrote: »

You are missing one important point. Not many have 100k spare in a credit crunch, far fewer that have 100k would be stupid enough to invest it in am illiquid asset that will take years and years to recover when equities are the next big thing. Look at the history. No crash ever recovers over a period of less than around 7 years. That is a long time in investing.

If all those people intelligent enough to have large wads of cash thought property was such a diamond steal, volumes wouldn't be at historic lows.

Face it, your house is going to be worth 40% less by the time you wake up and realize what has happened.Wait and see!

Yeah you are a first time buyer, and you state in your other post's you wont buy until the prices have come down, now i think you will find there are a lot of people with 100,000 pounds in savings, pensioners and other people who have relied in the banks will look for other means to make money.

Now like i said before i dont mind houses dropping 40%, but these savers if they do buy a house when the market hits bottom, they will only be taking the same risk as you first time buyers, but they wont have a mortgage, you will.

Even if they bought the same time has you, and houses carried on dropping another 20%, you would go into negative equity the following year, they wouldnt, they would have the rent to offset it and they would also have no mortgage to pay.

Its a no brainer to me, say for instance they bought a property for 100,000 pound and rented it out for 600 pound a month, they would have a little bit of pocket money each week about 150 pound, and if prices do go back up which im sure they will, otherwise no one will buy including yourself they can sell at a profit.

if houses do fall 40%, i think i would probably buy another house and keep the one ive got now to rent out, the rent from my house would cover the mortgage and pay some towards my other house, then if i want wait until there is a bit of a recovery, and sell it.

confused31_2

mbga9pgf wrote: »

You are missing one important point. Not many have 100k spare in a credit crunch, far fewer that have 100k would be stupid enough to invest it in am illiquid asset that will take years and years to recover when equities are the next big thing. Look at the history. No crash ever recovers over a period of less than around 7 years. That is a long time in investing.

7 years they would have took 128,000 pound in rent, so it would have cost them nothing, even if they sold for 28,000 pound they would still nearly have made 60,000 pound over the 7 years.

As someone said btl is a long term thing, the peoplewho bought btl in a rising market are in trouble, but landlords who buy at the bottom of the market can only be winners.

I know people who have a couple of properties already and are looking to buy again when houses hit bottom, the question everyone wants to know when is it going to it bottom????

abaxas

Well, if the halifax/nationwide are to be believed, property is losing about 16% PA.

So the choice is simple, get 2.5-3% in a bank account or lose 19% by buying a property.

Personally I don't enjoy ramming hot pokers up my bottom, so I'll pass thank you.

tom9980

confused31 wrote: »

Yeah you are a first time buyer, and you state in your other post's you wont buy until the prices have come down, now i think you will find there are a lot of people with 100,000 pounds in savings, pensioners and other people who have relied in the banks will look for other means to make money.

Now like i said before i dont mind houses dropping 40%, but these savers if they do buy a house when the market hits bottom, they will only be taking the same risk as you first time buyers, but they wont have a mortgage, you will.

Even if they bought the same time has you, and houses carried on dropping another 20%, you would go into negative equity the following year, they wouldnt, they would have the rent to offset it and they would also have no mortgage to pay.

Its a no brainer to me, say for instance they bought a property for 100,000 pound and rented it out for 600 pound a month, they would have a little bit of pocket money each week about 150 pound, and if prices do go back up which im sure they will, otherwise no one will buy including yourself they can sell at a profit.

if houses do fall 40%, i think i would probably buy another house and keep the one ive got now to rent out, the rent from my house would cover the mortgage and pay some towards my other house, then if i want wait until there is a bit of a recovery, and sell it.

I agree with you, ive spent most of january looking at all the data i could find, looking at all the investment opportunities etc for my parents, they wanted to cash buy a second house to rent to another family member so reliable long term tenants rather than getting the very best % return. So we decided to view some houses to get a feel for the area they were interested in buying although we agreed maybe it was still a bit early, the 2nd house i choose for them to view was perfect and a price was agreed at around the late 2003 price range for it because the house was vacant and the owner had died (not in the house) so it was being sold to be split for inheritance purposes.

To me my parents have a good solid investment for years to come they are covered for another 15+% worth of price drops already and are in it for the long haul.

I believe there are opportunities available out there right now but you wont know if you dont at least go and look, and if it makes sense then why not?

mbga9pgf

Confused, do you really think rents will stay the same in the post apocalyptic nuclear winter that is about to befall our nation? Your figures for profit forget to account for:

Inflation
Management costs
Annual gas inspection certificate
Tennant vetting (financial)
costing of voids
Income tax (no mortgage therefore no offset)
running costs repairs etc

You keep on referring to the fact I am a first time buyer as some sort of slur. Yet, you fail to mention that I ultimately have made better financial decisions than you by not buying, a decision that has saved me around 70K in the past year.

As I said, equities will be where it is at in the medium term that you are talking about. The equities market leads the housing market and profits outweigh the housing market significantly. You ust need more than 2 brain cells to figure its goddamn dumb to buy at the top instead of the bottom.

Like most of the bears on here were saying 18 months ago and gettign laughed off by idiots who are now noticeably absent.

As for the pensioners, what do pensioners realistically do at that age? Upsize or downsize? I suggest there are few 80 year old BTL scumlords out there; in fact, most are worried about their HBOS and RBS shares right now to even think about investing. In fact, over a 1/3 will have to sell up to pay for their care.

tom9980

abaxas wrote: »

Well, if the halifax/nationwide are to be believed, property is losing about 16% PA.

So the choice is simple, get 2.5-3% in a bank account or lose 19% by buying a property.

Personally I don't enjoy ramming hot pokers up my bottom, so I'll pass thank you.

This misses the point.

You would be stupid to buy at asking price now without factoring in a reduction wouldnt you? you would be stupid to buy at asking price and then sell in a year as well? the point is long term this can make sense for some people who have the cash and if they find the right property.

dgl1001

Interesting post - a few things

Why are people confusing average price indexes with the cost of individual properties? Houses brought through distressed sales can be picked up for an absolute bargain and can acheive yields in excess of 10% (last weeks Estates Gazette). If i had £100k in the bank (and i don't) i would be looking for a better return than currently offered by the banks and property would be an option. Industrial/ commercial properties are returning as high as 13% returns.
I agree about the point of falling asset etc but 2 things a) wouldn't you cost that in your purchase price and b) are prices really going to depreciate for the next 10 years? - i doubt it.

confused31_2

abaxas wrote: »

Well, if the halifax/nationwide are to be believed, property is losing about 16% PA.

So the choice is simple, get 2.5-3% in a bank account or lose 19% by buying a property.

Personally I don't enjoy ramming hot pokers up my bottom, so I'll pass thank you.

if you did read the first post it did say when price hit bottom, or its a real good bargain, some people are desperate to sell and have to let their houses go really cheap now.

As long as you get your rent every week for 7 years you have got your money back and some on top even if you sell the house for 0 pounds.

Now how can that be a bad deal?

confused31_2

I thought this thread would ruffle a few feathers, because i personally think that all the good properties, the properties that investors and buy to let landlords, will be waiting to pounce.

When prices hit bottom, i think they will make their move, whether this will cause a scramble for all the good proeperties i dont know, you might get savers looking to make money from property, more buy to let landlords jumping in to get bargain properties, investors and first time buyers all trying to pick up bargains.

this i think could cause a bit of a fight for the best properties, just a thought and thats all it is, so before anyone gets on their high horse and starts saying your a idiot you dont know what your talking about lets have a debate!!!!!

its my opinion we all have different opinions, and this opinion unlike other peoples will not benefit me in the slightest has i have no savings to buy another house.

anyway im off now got to take the kids sledging lol