Is Buy-to-Let silly right now?

dizziblonde

Round here the lettings market is very very full of properties to choose from, while we jumped quickly to rent the place we really liked, I'm sure we'd have had no difficulties finding somewhere else if it hadn't ticked all the boxes.
We moved in January - our old flat (which was fab, well located and decorated with a good landlord - just one-bed) is still up to let at the moment with no visible sign of being taken, and that's despite him dropping the rent on it once.

GDB2222

mystic_trev wrote: »

There certainly is a 'spring bounce' in the Market at the moment. A house I was interested in todays Savills Auction had a guide price of £100,000. Sold for £139,000 At that price the net yield would still be just under 5% and the house needs at least another £10,000 spent on it, before it can be let!

Around 1990, the Bank of England published a study into the effect of a reduction in interest rates on house prices. Unfortunately, I cannot unearth a copy. My recollection is that they concluded that a 1% drop in interest rates led to a fairly immediate 2% or 3% increase in house prices, spread over the next few months after the interest rate drop. Although base rate has dropped about 4%, mortgage interest rates had not dropped as much is that. I guess there has been about a 1% to 2% drop in the interest rates that people actually pay, which is bound to have a short-term effect on house prices -- at least according to the Bank of England study. So, yes, a spring bounce, but I am not convinced it is going to continue.

Geenie

The OP hasn't said where they would be buying and what type of property, and that makes a difference.

I had no problem letting a large family sized property recently in Devon. But a new build, one bed flat in Manchester would be another story. Size is very important now! :cool:

If you have it, they will come.....

koneka

I agree if you are buying a house for yourself and planning to rent it out while you are away, it is not a bad idea. When time comes, you will need to ask lender's permission to rent and that will cost you between £150-£250.

poppysarah

koneka wrote: »

. When time comes, you will need to ask lender's permission to rent and that will cost you between £150-£250.

Or a whole new rate. Assume nothing.

As will all business plans you need to plan carefully.

nm123_2

Just in case anyone was wondering... We didn't buy.

In Feb this year we moved to Australia with my work, planning to be here for 2 years and as the exchange rate is in our favour (at the moment anyway), we are aiming to go home with about £70k and then look at buying.

Very nearly did a rush job to buy somewhere before Christmas, but thought twice and I'm glad we didn't! Can't imagine trying to play landlord from all this way away!