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The Four Horseman of the BTL Apocalypse.
Comments
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Disagree chucky, the 'mask' of low rates is covering a multitude of sins at this time.
only 50% of people would have a SVR/tracker. thise on fixed rates wouldn't be impacted.
out of those 50% you would have to identify those that have been made unemployed and own a home also will be long term unemployed with no savings to get them by.
do you think that's a big number?
interest rates are masking a lot but how many?0 -
only 50% of people would have a SVR/tracker. thise on fixed rates wouldn't be impacted.
out of those 50% you would have to identify those that have been made unemployed and own a home also will be long term unemployed with no savings to get them by.
do you think that's a big number?
interest rates are masking a lot but how many?
For me interest rates aren't just not masking the recession Chucky they are actually making it worthwhile!
Ok I have taken a hit on equity but as I have no intention of selling until about 2020(ish) anyway by which point prices would have recovered (now that as CGT has been reduced to 18% (from 40% that's a big headstart) recovery back to 2007 levels in real terms is very easily achieved)Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
Thats because you are in the eye of the storm with low IRs. Its passing over you as we speak, you know its coming. Everyone knows higher interest rates are coming.
IRs going up are only 1 of the 4 horsemen. Your equity is going down, your rent you will get is going to go down and finding good tenants who can and will pay all the rent is getting harder.
Sorry if it sounds like Im being hard on you but so many are the same, they can just about make a profit on the yeild at the moment so dont worry about being in negative equity.
Do they not see that we are in the eye of the storm?
More emotive language, sigh.
Interest rates are certainly going up. If they go up 8 fold they get to the dizzying heights of 4%, and that would imply a stonking recovery. That's still less than easily achievable return on capital from rental.
Equity MAY go down in the short term, it may just stagnate, it may even rise. It will return to current levels over a 5 year timeframe. It's very unlikely to go down long term. Principally the value from a BTL is about rental income, capital gains are a bonus. If you get 7%pa on your initial capital, it doesn't matter if the capital value of the asset dips in the short term and then returns to the original (not real terms) value, you've still had the income. Providing you don't sell of course.
Rents are not going down. They are sitting very slightly lower than peak, but not significantly, about 5%.
And there is really no problem finding tenants who can pay the rent in a country with relatively high rates of employment and pressure on available housing. But that's largely a matter of the way the letting is run as a business, as we've said throughout, poor businesses will fail in every walk of life, it's just more tricky for the clueless to fail in residential letting.0 -
Only when something very dramatic happens ad, you'd need the direct contrary of a banking collapse.0
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That sounds a lot when you put it like that, however we must remember they dropped a similar amount in just 8 weeks, what goes one way, can go the other quite easily.
Nowhere near as quickly though, don't forget we are in a recession! The BOE is not going to hike interest rates up in the incriments that they dropped them byChuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
chucknorris wrote: »Nowhere near as quickly though, don't forget we are in a recession! The BOE is not going to hike interest rates up in the incriments that they dropped them by
Oh I agree with that, but we must remember that if we carry on borrowing in the way that we are it might be taken out of the BoE hands at some point. Time will tell.0 -
More emotive language, sigh.
Interest rates are certainly going up. If they go up 8 fold they get to the dizzying heights of 4%, and that would imply a stonking recovery. That's still less than easily achievable return on capital from rental.
Equity MAY go down in the short term, it may just stagnate, it may even rise. It will return to current levels over a 5 year timeframe. It's very unlikely to go down long term. Principally the value from a BTL is about rental income, capital gains are a bonus. If you get 7%pa on your initial capital, it doesn't matter if the capital value of the asset dips in the short term and then returns to the original (not real terms) value, you've still had the income. Providing you don't sell of course.
Rents are not going down. They are sitting very slightly lower than peak, but not significantly, about 5%.
And there is really no problem finding tenants who can pay the rent in a country with relatively high rates of employment and pressure on available housing. But that's largely a matter of the way the letting is run as a business, as we've said throughout, poor businesses will fail in every walk of life, it's just more tricky for the clueless to fail in residential letting.
Explain how by obtaining an unguaranteed gross yield of 7% on BTL property is profitable ? I must be missing something here.......0 -
Thrugelmir wrote: »Explain how by obtaining an unguaranteed gross yield of 7% on BTL property is profitable ? I must be missing something here.......
Because 7% is merely the intial yield, ok rents are currently under pressure but anyone buying with a 20 year view will see significant increases in both capital appreciation and rental growth.
Incidentally you would be very lucky to achieve a 7% yield in London, more like 5.5-6%Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
chucknorris wrote: »Because 7% is merely the intial yield, ok rents are currently under pressure but anyone buying with a 20 year view will see significant increases in both capital appreciation and rental growth.
Incidentally you would be very lucky to achieve a 7% yield in London, more like 5.5-6%
Julieq's point is to ignore capital appreciation ( why I have no idea), and take no account that the investor is also very highly leveraged.
I am not directing my point at those that buy property outright.0
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