Buy to let fever?

BobProperty

ali007 wrote:

....The problem with the top 10 is that they are all already so expensive. We couldn't afford to borrow 250k for a property in Oxford etc, only in Easington could you buy for less than 100k....

And the one bed flat in Brighton they showed was £450,000. Still it will no doubt rent for at least £1875 per month....

BobProperty

lynzpower wrote:

Bob,
was that a one bed flat in reddish?

What was?
I know Reddish pretty well and there aren't many flats. The main ones coming on the market are in one or two mills which are being converted like Houldsworth Mill was. (Victoria and Lilac?)
http://www.manchesteronline.co.uk/ewm/ic7/60text.html
http://www.stockportexpress.co.uk/news/s/209/209924_high_hopes_for_cotton_quarter.html
This is an apartment in Houldsworth Mill:
http://www.rightmove.co.uk/viewdetails-11443598.rsp?pa_n=2&tr_t=buy
and this is a new apartment in Victoria Mill:
http://www.rightmove.co.uk/viewdetails-4570365.rsp?pa_n=1&tr_t=buy

aloiseb

Dora_the_Explorer wrote:

Buy land - they're not making any more.

Probably we shoudl avoid buying land in Surtsey, in Iceland - that volcano knocks up a new bit every year, according to my Blue Peter Book 9 :rotfl:

gallygirl

aloiseb wrote:

Dora_the_Explorer wrote:

Buy land - they're not making any more.

Probably we shoudl avoid buying land in Surtsey, in Iceland - that volcano knocks up a new bit every year, according to my Blue Peter Book 9 :rotfl:

New property hot spot then!!!!!!:rotfl:

lynzpower

They are nice bob, might encourage my sister to buy one of those (to live in) they look pretty nice.

Is there much new build going up round Stockport then?

Personally, the manchester market I dont know who can afford it. 2 mates of mine have bought a 2 bed flat n Ancoats, ones a dr, ones an accountant the accountant works evenings in a bar to help him out with money,

poopscoop

meanmachine wrote:

By the time Tarquin the TV producer has got wind of something, you know the smart money has gone elsewhere.

yeah, it's the same when the news appears in the media. You know it's old hat then.

poopscoop

nmiah786 wrote:

Just out of interest what proportion of that £1M portfolio is mortgaged?

It's called leverage. For example, if you borrowed to build a nursing home at 8% and you get returns for 33%, it's called financial leverage. Businesses do it all the time. Check them out when you read the stocks & shares section in various publications. Before you invest in a company you check key points like their debts (good or bad).

mystic_trev

With thanks to olikea from TMF

"Having caught the first few minutes of tonights program "Where best to invest" I have to say I am absolutely appalled! Be warned... a rant is coming!

If some of their advice came from a financial advisor, they would quickly find themselves out of a job and probably being sued heavily!

For example "if you are scared by stocks and shares maybe property is for you..."

Oh really?! This might be true for a multi-millionaire looking to buy a nice 10-strong property portfolio outright, but for the vast majority of people property investing usually involves borrowing large amounts of money and investing in one, single, property. This is considerably riskier than investing in an index share tracker like the FTSE100. If you buy a property with a 10% deposit then all it takes is a 10% correction and BOOM, all your deposit is gone.

"property has done better than shares in the last 10 years"

Yes quite so and have they failed to mention that precisely because property is now so expensive future gains are going to be pretty muted. At the risk of going on a tangent, the experience in the UK has been pretty unique, other countries have not seen similarly impressive property returns. Various things such as demographic changes have drive property prices over the last 20-30 years in the UK, and it is possible the last 20-30 years of property returns are a one-off shift, an abberation caused by the change away from nuclear families (for example) and the rise of the baby-boomer generation. The fact other countries haven't seen such gains is evidence for this. So if anything when projecting the future perhaps we should be cautious and say we can expect to see inflation plus GDP growth, i.e. about 5% per annum. A reasonable return if you add rent on top, but nothing spectacular. For those projecting something spectacular I would like to know exactly how they arrive at this conclusion.

Also in the programme "property is a safe bet"

Now they deserve to be hung for this. The financial community all over the place has to put lots of disclaimers "shares can go down", well guess what so can property! In fact unlike shares property can not only go down, but it can suffer unexpected maintenance, flooding, roof collapse, lack of tenants, disruptive tenants and ultimately can result in personal bankruptcy (unless you are super rich and own outright). Despite what people may think, you cannot go bankrupt investing in say the FTSE100. And the FTSE100 won't call you in the middle of the night complaining about a burst water main.


What makes me most angry though is this sort of thing is very reminiscant of the US media coverage of the dot-com boom in America in 1999. Dot-com companies were the way to get rich. Before the crash of course. But after years and years of rising share prices on business that made no money, people really started to believe it was a new order.

After years and years of rising property prices people now believe prices will rise on forever and into the heavens. But it can't go on. Just as share prices eventually must reconcile with business values, property prices must eventually reconcile with what people actually earn from their salaries. And with average properties at 5 times average salaries we really are at the high end historically. And when that happens you know its a bubble. When every last person has become a property investor, you know the bubble is about to pop. The worst thing is that when a bubble pops it is usually the least informed and the people who can afford it least who loose the most.

So I find Kirstie and Phils comments absolutely reckless. How many people will now be tempted into the property market with little knowledge and little idea of the risks only to loose everything? By which time Kirstie and Phil will be long gone, no longer accountable.

I don't object to people who have a bullish outlook on property prices. But I object very strongly to people who claim it is low risk "safe as houses," because borrowing money to invest in property is at least 10 times riskier than leaving it in a "dangerous" stock market index tracker. Where are the risk disclaimers? Who will be accountable?

lynzpower

Completely agree with that statement Mystic trev.

Another thing that riled me about the prog last night was Phil going why not get a BTL property with 2, 3 even 4 of your mates, splitting the risk.

INteresting as the rest of the prog barely focused on risk at all, and what can happen to the unaccustomed little guy, in fact thats exactly who the prog was aiming at. Splitting the risk 4 ways at thier top property in thier top location oxford would have given on someone elses calculations in this thread, no more than 1.5% pa return.

Irresponsible just doesnt even start to cover it.

Wonder how much she wants for her place though, the office was nice, but the whole place could do with a visit from Ann Maurice, & a thorough declutter LOL

meanmachine_2

The show only got 2.1million - quite poor for the KirstynPhil brand.

I doubt they'll be doing it again. Anyway, it was more of a precursor to the return...sigh...of Location Location.

This is the other reason why I'd like to see normality return to the market - C4 will be forced to commission shows with actual thought and creativity behind them.

But until the next get rich quick scam comes along, looks like we're lumbered.