Low interest rates will support house prices until 2014

chucknorris

chucky wrote: »

ask them them same question in 2025 not straight after a property price drop... they will be very happy with the capital gain... :rolleyes:

Not to mention the increased yield as rents would have increased whereas mortgage rates merely fluctuated

StevieJ

Graham_Devon wrote: »

I didnt say they would buy at 20 either. I said "start out". That means start out on the path towards getting a home. I did say "at that point" so I guess that's been picked up on instead of what was said later and the sentiment of the post.

Sentiment is gone now anyway, so will leave this. Lots of bluff, no real answers.

Put yourself in a 20 year olds shoes with no deposit help. You just left education.

Could YOU afford to buy a house at that point? Bear in mind, you will be paying rent to provide yourself with a roof, therefore, your living costs woould not be nothing.

Emy1501

IveSeenTheLight wrote: »

Capital Gain is a bonus and is only achieved when selling the asset.

I'm not saying that all BTL property has been bought wisely. It may be that your parents property was not the best investment.
I've yet to see any evidence other than anecdotal that BTL is such a poor investment.
I'm sure if details were investigated into actual BTL costs outlayed and returns received, you would see a vastly different picture to the one you may be experiencing.

I have previously given an example of how a BTL investment provides a better return than a savings account, without HPI over a 25 year mortgage period

I have two BTL's, one bought in Jan 2007, which has a decent Rental Yield and has also shown capital appreciation since that time. I wont get any capital appreciation till I sell (possibly in about 20 - 30 years time) from which I am pretty certain that the price will be vastly higher than it is today.

Any chance you can give that example? My parents have been the BTL game since 96 and do pretty well out it but anything bought since 2003 will struggle.

Example flat near me bought in 2004 10 mins for station with direct links to London bridge or Victoria in under 20 mins. Cost 200K. 25% deposit 50K 5% mortgage on the 150K £625 a month. Rent £800 after agents fee a month. Yield therefore under 5%.

The above excludes any voids, non payment the fact that you will have to redecorate every few years etc and anything going wrong with the property.

Within a couple of years rates will be back to 4-5% any your money will be safer in the bank.

Emy1501

chucky wrote: »

ask them them same question in 2025 not straight after a property price drop... they will be very happy with the capital gain plus the yield that will probably be inflation proof... :rolleyes:

read the original question we are talking without CG's. As for inflation rent has hardly gone up in last 10 years.

chucknorris

Emy1501 wrote: »

Any chance you can give that example? My parents have been the BTL game since 96 and do pretty well out it but anything bought since 2003 will struggle.

Example flat near me bought in 2004 10 mins for station with direct links to London bridge or Victoria in under 20 mins. Cost 200K. 25% deposit 50K 5% mortgage on the 150K £625 a month. Rent £800 after agents fee a month. Yield therefore under 5%.

The above excludes any voids, non payment the fact that you will have to redecorate every few years etc and anything going wrong with the property.

Within a couple of years rates will be back to 4-5% any your money will be safer in the bank.

You have written the answer yourself above, it is a long term investment, I bought back in the early 90's and didn't make any money then, but as time progressed they became more and more profitable

chucknorris

Emy1501 wrote: »

read the original question we are talking without CG's. As for inflation rent has hardly gone up in last 10 years.

Why is that? My rents for properties in Battersea have gone up over 30% in the last 10 years and that includes a 3.92% drop in the last 12 months

Emy1501

chucknorris wrote: »

You have written the answer yourself above, it is a long term investment, I bought back in the early 90's and didn't make any money then, but as time progressed they became more and more profitable

Where have I written the answer? When you take into account voids and the fact you will have to re-decorate every few years you are not going to make anything. You are going to hardly see any inflation in rent due to number of BTL's these days.

Show me any evidence that someone who bought in 2004 outside of central london is making any real rental yield when you take into account the above and the time and hassle in looking after a BTL

StevieJ

worldtraveller wrote: »

A manufacturing sector which is likely IMHO to be reduced in size considerably over the next few years. As for the financial sector, I fear that you are living in the past/present and this is likely to be severely hit in the next few years, largely for the reason I state above. As we are heavily involved in the financial sector and it has paid a major part of our tax take, both directly and indirectly over the past few years, the new EU legislation will undoubtedly, IMHO, move much of this sector offshore.

Personal view Stevie, but I guess only time will tell!

More banks took up residence in London than any other European city over the past six months, as they moved to take advantage of the bottoming out of office rents in the U.K. capital.
London accounted for 36%, or 819,198 square foot, of all new property deals involving banks during the six months to Sept. 30, according to a report by property firm Cushman & Wakefield.



http://online.wsj.com/article/BT-CO-20091118-705319.html

Emy1501

chucknorris wrote: »

Why is that? My rents for properties in Battersea have gone up over 30% in the last 10 years and that includes a 3.92% drop in the last 12 months

Where I am in Zone 5 they have gone up no more than 20% in the last 13-14 years. In the last 5 years they have not gone up at all.

chucknorris

Emy1501 wrote: »

Where have I written the answer? When you take into account voids and the fact you will have to re-decorate every few years you are not going to make anything. You are going to hardly see any inflation in rent due to number of BTL's these days.

Show me any evidence that someone who bought in 2004 outside of central london is making any real rental yield when you take into account the above and the time and hassle in looking after a BTL

Do I have to say it again? It's a long term investment, you make the money in the later years not the early years.

You said this:

My parents have been the BTL game since 96 and do pretty well

which identifies it is a good long term investment