Buy to let: double whammy for amateur landlords as flat rents fall

kennyboy66_2

Thrugelmir wrote: »

Rates will be determined by the need to raise borrowing by the issue of Gilts. General market rates will be determined by finance houses having the capital to fund their lending by offering depositors competitive rates.

To cover losses margins will also be increased.

A whole generation is going to find that cheap credit doesn't exist.

While this is true, what you describe is the increase in real rates not nominal rates.

If inflation stays below 3% we will still see lowish nominal mortgage rates - the problem will be that house prices will be stagnant at best, and wage rises will be low. Add this to tax rises - and peoples standard of living ain't going to be shooting upwards.

geoffky

dd i am trying to pm you..computer says no...

geoffky

julieq wrote: »

That's a slightly spurious argument. Unless rates really shoot up, rental income will cover repayments without the need for a remortgage, and rates won't shoot up unless there's some sort of economic recovery, so it's basically self regulating. It's inevitable that some BTL investors with high LTV will get burned, but they'll find it a lot easier to build a defensive position now than they would if there had been stagnation and highish interest rates, that would just have caused a cash haemorrage.

Not everyone can be rich without doing anything, that was the fundamental reason why BTL could never really work. But as things are, there is a structural redistribution of advantage towards the indebted and with property from those with cash and who are renting. The very most that article suggests is that there's a marginal drop in rentals in one sector, about 5%. Excuse me while I get seriously underwhelmed.

That provides breathing space for anyone who might otherwise have been in trouble, and opportunities for anyone with cash by moving from the disadvantaged group into the advantaged group (instead of bleating endlessly about how unfair it is). There won't be long to do this, because that's the way opportunities work, but it's one of the best and most obvious for years.

Not everything is about capital growth.

quote= for anyone with cash by moving from the disadvantaged group into the advantaged group

cash in bank is still far better than losing 20% per year on the value of house. and will be for the next few years.

as for your 5% i think if you look in my area it is far far more

; 4 bedroom barn conversion ; £1,750 pcm; (£-745) -29.86%

; 4 bedroom detached house ; £1,600 pcm; (£-325) -16.88%

; 4 bedroom detached house ; £825 pcm; (£-70) -7.82%

; 4 bedroom property ; £1,750 pcm; (£-750) -30%

; 4 bedroom barn conversion ; £1,950 pcm; (£-550) -22%

; 4 bedroom detached; £1,500 pcm; (£-250) -14.29%

4 bedroom detached house ; £1,000 pcm; (£-300) -23.08%

; 4 bedroom detached; £1,500 pcm; (£-250) -14.29%

; 3 bedroom semi-detached; £695 pcm; (£-80) -10.32%

and more and more in fact all my rents in property hive have had to lower their rents ..;);)

Thrugelmir

kennyboy66 wrote: »

While this is true, what you describe is the increase in real rates not nominal rates.

If inflation stays below 3% we will still see lowish nominal mortgage rates - the problem will be that house prices will be stagnant at best, and wage rises will be low. Add this to tax rises - and peoples standard of living ain't going to be shooting upwards.

To ascertain if an investment would be worthwhile. I would factor in a "what if" on a base rate of 6% and therefore a lending rate of 8 -9 %. With inflation still low the nominal rate is going to be high. As inflation will not erode the value of the debt.

Dithering_Dad

geoffky wrote: »

dd i am trying to pm you..computer says no...

I'm back now geoff, mate - Governor gave me a stay of execution I think.

Happy to receive PMs now

StevieJ

Dithering_Dad wrote: »

I'm back now geoff, mate - Governor gave me a stay of execution I think.

Happy to receive PMs now

To paraphrase Mark Twain

I am happy to know the reports of your ASBO were greatly exaggerated
:T

Dithering_Dad

StevieJ wrote: »

To paraphrase Mark Twain

I am happy to know the reports of your ASBO were greatly exaggerated
:T

Cheers mate. better mind my p's & Q's from now on - someone else needs to take the anti-nazi baton from me from now on

carolt

kennyboy66 wrote: »

FACT rents for flats are falling?

HYPE rents for houses have dropped too


Do you not feel even a little embarrassed for your selective use of facts and hype?

My rent (for a house) is dropping - as I mentioned previously, we are moving to bigger house for a substantially cheaper rent.

That's not hype, that's fact.

Sorry if it's a fact you find upsetting, but I don't see why I should sweeten the facts just because you find falling rents difficult to cope with.

the_ash_and_the_oak

chucknorris wrote: »

I would take frozen rents (or even a small fall) combined with a 83% fall in mortgage payments any day of the week.

Agree with this - and think this is the intention behind current rates and policies - not to help new people into the market really but to help existing owners (both occupiers and investors alike) keep hold of their houses, reduce repossessions, and introduce some sense of stability. Also means rents can fall without negatively impacting investors (at least in short term).

Although this can give landlords a bit more flexibility to be competitive in attracting tenants I don't think rents will fall in line with interest payments (window here for landlords to make good profits in short term at least) - it is more that i think rents will fall in line with wages and job levels. It is this that sets the amount tenants can pay. Rents have been remarkably static imo (in london at least) while all around them on the way up and on the way down so much has changed

the_ash_and_the_oak

Not really sure what happened to Chuck Norris' post