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

mbga9pgf

Problem people have is they get it into their heads that their money constantly has to be working for them. IMHO, it dont. Why not sit back, enjoy, and pick your moment to invest? This idea that you need to be making constant gains is what pressures people into doing stupid things like invest at the peak of the market.

Just sit back, watch prices fall further and vulture in at the right moment.

socrates

tom9980 wrote: »

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?

The main bit I can pick out of this is the very reliable tenants - as opposed to good % return.

This is OK but what happens if the circumstances of the relatives change, or maintenance plus all the other things that can go wrong.

This is a very specific situation.

In the main we are talking about savers using their cash to buy a property to rent to strangers (which is the most common situation)

I have not heard of one post in this thread from a saver who is prepared to do this.

tom9980

socrates wrote: »

The main bit I can pick out of this is the very reliable tenants - as opposed to good % return.

This is OK but what happens if the circumstances of the relatives change, or maintenance plus all the other things that can go wrong.

This is a very specific situation.

In the main we are talking about savers using their cash to buy a property to rent to strangers (which is the most common situation)

I have not heard of one post in this thread from a saver who is prepared to do this.

The status of the relatives is a guaranteed 18 months with a high chance of 5 years or more with secure income. Parents are aware of all LL responsibilities and duties and with good planning wont be an issue if new stranger tenants are required.

Your right and i do believe 95% of savers (yes i pulled that figure out of thin air) should not be looking at property at all right now, for some it will make sense to at least look for bargains like my parents have. I believe in a year or two from now many more people to be looking at property as things begin to bottom out and stagnate but i dont believe its unreasonable to look around for investment opportunities and distressed sellers now.

Personally i believe prices are to fall 15-25% from this point during the next 18 months we then are likely to see stagnation and then a mini spike rise in about 2-3 years as people fear missing out on the cheaper prices, we should then see a steady slow rise in prices from then on. The only thing i think that will prevent this is if we do indeed fall into world depression in which case were all £$"££% :eek: and how well the various world governments do with implementing new legislation to prevent the economic madness of the peak periods of 2004-2007.

confused31_2

socrates wrote: »

I have not heard of one post in this thread from a saver who is prepared to do this.

You even said yourself if you had savings you would buy more buy to let properties, savers might not come on the house buying forum as much has buyers and sellers.

Most people that post on here are first time buyers and to be honest they despise anyone who has anything to do with buy to let, has they blame these people for making house prices rocket before, preventing them from buying their own home.

The cycle will start again and i suspect when a house comes up early at a bargain price or the market is at its bottom, first time buyers will be competing with savers and investors to get the best properties.

Just because savers dont come on here shouting about it, doesnt mean they wont do it, ive spoke to my dad today and he his seriously considering doing it, but he like a lot of people believes the market is going to fall a lot more.

socrates

confused31 wrote: »

You even said yourself if you had savings you would buy more buy to let properties, savers might not come on the house buying forum as much has buyers and sellers.

Most people that post on here are first time buyers and to be honest they despise anyone who has anything to do with buy to let, has they blame these people for making house prices rocket before, preventing them from buying their own home.

The cycle will start again and i suspect when a house comes up early at a bargain price or the market is at its bottom, first time buyers will be competing with savers and investors to get the best properties.

Just because savers dont come on here shouting about it, doesnt mean they wont do it, ive spoke to my dad today and he his seriously considering doing it, but he like a lot of people believes the market is going to fall a lot more.

I just cannot get through to you.

I am in property already.

The people I am referring to are Savers who have NEVER been in property who have never rented out a property - I have not heard of one who is prepared to lump £100 -150k cash into a property and then rent it out.

Try going on the Savings Board - where they are ALL savers and run a poll of how many are looking to become BTL LL's and see how many you find

Also the type of property FTB are interested in are generally different from LL's. FTB prefer houses - LL's prefer flats as they have less dead rooms.

I do not mind debating but please keep up . Its boring repeating myself.

Oh and please keep us informed on your dads venture into the market.

confused31_2

Many savers in the past might not have risked moving into the buy to let market, but a lot of them still need cash and if the banks are not paying the interest on their savings, why not take a risk??

As long has you make sure the houses is desirable to people who want to rent, bfore you buy it, i think its a good move.

I know people who have a few properties and they have always told me its a good way to make money, you dont need to be too greedy and have a load.

Theres not many savings accounts that will pay you over 100 pound a week in interest, on a 100,000 pound deposit

Why dont you run a poll on the savers board to prove your point?

I might consider it myself if its true, what everyone says houses are going to fall 40%, just a shame they are not where im looking to buy.

socrates

Confused I really am confused with you. You said there were no savers on this board I directed you to the savers board.

What you suggest is NOT happening and will NOT happen - people who are by nature savers do not throw lumps of money at houses, or any other major investment . They spread their risk/portfolio.

However you are ideally placed to test your theory - when prices come down - and help your father buy a place for cash.

Please do let us know how it goes.

confused31_2

I dont need to look ive just been on the savers forum and there are people advising savers to buy, buy to let properties already on there, take a look you may see some.

Im even considering doing it myself if houses come down 40%, i might take the risk and get in there myself just use the eqiuity i have got already from my own house.


Anyway your getting boring now, run along and do your own research.

stephen163

A few points I had in mind. This unprecedented fiscal stimulus will probably overshoot and translate into increasing inflation by 2011. The MPC will then put interest rates back up to between 5%-6%. Meanwhile, there will be more repossessions as mortgage payers are now more likely to miss repayments. The flood of new houses hitting the market will further depress/curtail house price growth and the economic misery of the previous 18 months has translated into lower rents. The subsequent 3 or 4 years will probably be characterised by slow recovery with interest rates at close to long term averages.

So, over the 7 years, your average interest rate on savings may well be closer to the 5% mark, giving a return on £100k of about £40k.

Meanwhile, your £100k house has fallen to £80k (optimistic estimate) and your total rental income on a 10% yield has been approx £9k/year, or £63k over the full 7 years. Out of that £63k, you have had to pay all the usual costs of being a landlord, amounting to about £2k a year, or £14k over the 7 years (maybe more!). So you're left with £50k rental income and £30k profit after the £20k drop in house prices.

socrates

stephen163 wrote: »

A few points I had in mind. This unprecedented fiscal stimulus will probably overshoot and translate into increasing inflation by 2011. The MPC will then put interest rates back up to between 5%-6%. Meanwhile, there will be more repossessions as mortgage payers are now more likely to miss repayments. The flood of new houses hitting the market will further depress/curtail house price growth and the economic misery of the previous 18 months has translated into lower rents. The subsequent 3 or 4 years will probably be characterised by slow recovery with interest rates at close to long term averages.

So, over the 7 years, your average interest rate on savings may well be closer to the 5% mark, giving a return on £100k of about £40k.

Meanwhile, your £100k house has fallen to £80k (optimistic estimate) and your total rental income on a 10% yield has been approx £9k/year, or £63k over the full 7 years. Out of that £63k, you have had to pay all the usual costs of being a landlord, amounting to about £2k a year, or £14k over the 7 years (maybe more!). So you're left with £50k rental income and £30k profit after the £20k drop in house prices.

Stephen - exactly what I was trying to tell him.

However with all the long words you have used he will not understand any of it anyway.

And that is on the basis that you can buy a property for £100k and get £9k income - from someone who did not know what yield meant I am hardly going to take their word for it.