BTL, yields and auctions

Pobby

I`ve mentioned Property Auction News before. Not sure why I bother getting it but over the last number of years it has been a good, some times funny read.

In the heady days, remember the btl 100% deals, well the results where shocking. People piling in to get daft little yields ( I`ve mentioned my Irish mate who subsidises his tenant to the the tune of 700 euro a month ). Clearly the chav flats, oh sorry, new build apartments were the order of the day. I wonder how many are regretting all of this.

The past few editions have seemed to change. Stuff sticking. In fact some of the properties unsold are already tenanted and offering serious yields. Yields that a couple of years ago would, most likely, have sent the prices soaring.

I wonder, lack of funding, fears of further drops ( if I was a BTLer, with a double digit yield, price drops wouldn`t concern me. Anyway, seems like a change of sentiment. Ah it`s different this time.

ThrowingStonesAtYou

Pobby wrote: »

I`ve mentioned Property Auction News before. Not sure why I bother getting it but over the last number of years it has been a good, some times funny read.

In the heady days, remember the btl 100% deals, well the results where shocking. People piling in to get daft little yields ( I`ve mentioned my Irish mate who subsidises his tenant to the the tune of 700 euro a month ). Clearly the chav flats, oh sorry, new build apartments were the order of the day. I wonder how many are regretting all of this.

The past few editions have seemed to change. Stuff sticking. In fact some of the properties unsold are already tenanted and offering serious yields. Yields that a couple of years ago would, most likely, have sent the prices soaring.

I wonder, lack of funding, fears of further drops ( if I was a BTLer, with a double digit yield, price drops wouldn`t concern me. Anyway, seems like a change of sentiment. Ah it`s different this time.

I live in a new build flat, we aren't all chavs! although they do tend to move in once the LLs resort to DSS tenants once they realise theres little demand for rentals at the prices they were expecting.

We've got a chav who moved in opposite and we've had the police at 3 times in the last couple of months because she's always rowing with her bf, not sure if he's been hitting her but he always runs off before they get here

Interestingly I was looking at the selling prices today, the 'penthouse' flats on the top floor (2 of them, which are identical) were listed, one sold in 2007 and one sold this March - first one for £228k, second one for £135k :rotfl: Also one on the bottom floor sold for £160k in 2007 and £115k a couple of months ago. Oh well it's only money.

Pobby

I have a mate who also is in a similar place as you. Out of about 30 flats around 30% are owner occupied, the rest rented. He has said about all sorts going on there which isn`t very nice.

PasturesNew

As a single person, what annoys me is the amount of rent I can afford is less than chavs get for LHA ... so chavs can live in better/bigger places than I do.

I couldn't afford a new build rental.

(Usual caveat about my savings/being tight: that's to buy a house so entirely ignored; I live within my means/income on a month-by-month basis). Obviously I can afford to spend what the heck I like, when I like ... I'm just tight about my nestegg.

carolt

Would you want a new-build rental?

mystic_trev

A friend of mine lives next to where this development http://www.redrow.co.uk/developments/cannons-wharf/available-homes/ has been built by Redrow. The development he lives in was built by Gleeson five years ago and has been having some 'neighbour' problems - think ASBO's etc, by relocated families in what they thought would be 'Luxury apartments' There's no way Redrow will be able to get shot of the 228 apartments they're just finishing, so what will happen?
Well check this out http://www.redrow.co.uk/assets/uploaded/documents/303_siteplan.pdf
Three blocks of 'Social housing' They ain't happy bunnies :rolleyes:

nollag2006

Pobby wrote: »

...Clearly the chav flats, oh sorry, new build apartments ....

So people who live in new build flats are all chavs?

What a nasty piece of work you are

PasturesNew

carolt wrote: »

Would you want a new-build rental?

some of them are quite attractive sounding.... with waterside locations and water views, glass walls leading to large balconies, on site gym/pool, etc.

PasturesNew

As I see it, the big problem/issue with the flats that tend to be built in the UK is that they aren't all owned by the same person, with a resident caretaker. If everybody in a block had the same landlord and there was the presence of a maintenan ce person, it'd attract people more likely to live by the rules and not be 4rses.

But that's more of an American model isn't it.

A friend of mine lives in a rent control apartment in the States. His rent is set at the price he paid when he moved in, moving up by a contractually-binding amount each year; he's probably now paying 2/3rds of what a new entrant would. He has absolute guarantee of tenure and can even move out and rent it out himself without any problems, it's allowed/normal there.

His heating is provided by a central system and included in the rent. If anything goes wrong he calls the maintenance guy who pops along and fixes it. His on-site maintenance guy ensures there's no anti-social behaviour in the building.

nollag2006

PasturesNew wrote: »

I couldn't afford a new build rental.

(Usual caveat about my savings/being tight: that's to buy a house so entirely ignored; I live within my means/income on a month-by-month basis). Obviously I can afford to spend what the heck I like, when I like ... I'm just tight about my nestegg.

Good tool on here comparing the cost of rent to buy:
http://www.timesonline.co.uk/tol/money/calculators/article5771800.ece

Just put through the details of my own properties (assuming 3% increase in both rental and house prices), and they all come out positive in year 1 and getting even better over later years. I think 3% Long term HPI from the current base is a conservative figure.

Although it might be tight, from a cash flow perspective in the first year or two for you, it will be worth it putting that nestegg into a property of your own now, rather than being forced to live in a rental property that you don't like.

Don't forget, the other benefit is that once you can start to overpay in later years, then the mortgage debt (and associated payments) will quickly fall away

PasturesNew

nollag2006 wrote: »

Good tool on here comparing the cost of rent to buy:
http://www.timesonline.co.uk/tol/money/calculators/article5771800.ece

Just put through the details of my own properties (assuming 3% increase in both rental and house prices), and they all come out positive in year 1 and getting even better over later years. I think 3% Long term HPI from the current base is a conservative figure.

Although it might be tight, from a cash flow perspective in the first year or two for you, it will be worth it putting that nestegg into a property of your own now, rather than being forced to live in a rental property that you don't like.

Don't forget, the other benefit is that once you can start to overpay in later years, then the mortgage debt (and associated payments) will quickly fall away

I just tried to use that one and had no idea what it was telling me. It gave me a bar chart, with all green bars (green bars were growing over time) - but no clue what it meant.