The property boom is well underway now.

Conrad

ruggedtoast wrote: »

You'd have got a ton of something from those diplomats alright.

Classic negative view - the HSBC guy made a ton and there was never any comeback.

Lawyers string out cases to increase thier fees - in effect they make thier real money by abusing thier clients.

Dentists the same.

Chemical co's locate to special 'no rules' zones in India - they again make thier real money by abusing at the fringe of legality.

Blockbuster video make thier real money from late fees - not the core trade of renting vids they are supposedly focused on.

Tescos - I did a mortgage for the price check guy of a large store. He told me they shave off certain high profile products but NEVER LOSE as they add these 'costs' to other less detectable / apparant items. Again making profits at the fringe.

Thrugelmir

Conrad wrote: »

Depends on your priorities. Some people function perfectly well with 8 x income, others wouldn't countenance more than 3x. Were all different. I love those red faced dailymailers that bang on about risk whilst at the same time themselves never taking excercise and eating a dog poo diet (sausage, pork pie and ham types - little fressh fruit n veg). They fail to spot the irony.

Most people I see want interest only, whereas the more cautios types that borrow 'sensible' sums tend to go C&I.

Seems that the major lenders are hedging their loan books back to 3 - 3.5 times salary income.

I'm sure most people want interest only mortgages. This type of lending has a made a major contribution to the funding hole that has developed since 2003. Hopefully means of capital repayment will be high on the agenda of the FSA as will only create more problems in the future.

Conrad

Thrugelmir wrote: »

Wife obviously has business sense!

If people are buying property they cannot afford to buy (for cash).

Shows that they are still lessons to be learnt for many.

£50k purchase price
£15k costs.

£75k selling price.

£10k net profit, before tax and cost of capital injected.

Is it worth the risk?

Stick to the dayjob, though many gave them up to join the property scene.

Little risk - I'll be on the deeds and we will have articles of association that set out when the property will be sold.

If I make £5k quickly on a £35k or so investment - that's not so bad for a little fun. Remember no borrowing involved and I wont proceed unless everything is pinned down. PS - the true costs are likley £10k - I only put £15k to be over cautious.

Graham_Devon

Conrad wrote: »

Little risk - I'll be on the deeds and we will have articles of association that set out when the property will be sold.

If I make £5k quickly on a £35k or so investment - that's not so bad for a little fun. Remember no borrowing involved and I wont proceed unless everything is pinned down. PS - the true costs are likley £10k - I only put £15k to be over cautious.

It was 25k a min ago.

Harry_Powell

nearlynew wrote: »

What these people often fail to recognise or factor in to their calculations is the fact that their deposit is also borrowed money, which they will have to repay.

Do they?

How many people buy their FTB home and then pay off their mortgage completely before they sell and buy the next on up on the ladder? Not many I'd guess.

Many people work their way up the housing ladder as their family size and pay packet size increase, then once their nest empties and as they approach retirement, they sell up and move one or two steps down the ladder. The only time they actually need to have paid off their mortgage is the day they retire.

If someone had a strategy over the past 30 years where they bought a house on interest only rather than on repayment, and hence could afford to buy more expensive homes for the same monthly mortgage, they would be realising far more from their investment. Equity is built from HPI far quicker than from mortgage repayment.

Conrad

Thrugelmir wrote: »

. Hopefully means of capital repayment will be high on the agenda of the FSA as will only create more problems in the future

.

Thats a very dated outlook.

I have I/O as does my charterred accountant. We know exactly what we're doing.

Allowing a lender to be in charge of your capital repyment schedule is for the real numpties.
Most clients here expect chunky inheritance - ok it might not come off - it's only an added cherry but worth mentioning.

Also you overlook the fact a lot of people have more than one property so the I/O route is perfectly suitable.

We need to forget the past pension and c&i model - totaly outdated now for many of us. Vince Cable will perhaps cotton onto this one day;)

Thrugelmir

Harry_Powell wrote: »

Whether the bears like it or not, the British public's love affair with property is still continuing, especially as so few have had their houses reposessed and so many are benefitting from record low interest rates.

Is it? All the stats point otherwise. Decreasing home ownership, rising age of FTB's etc. Its a generational love affair. From those who know nothing else, and have yet to feel the full cold winds of what a recession actually means.

Graham_Devon

Harry_Powell wrote: »

Do they?

How many people buy their FTB home and then pay off their mortgage completely before they sell and buy the next on up on the ladder? Not many I'd guess.

Hello there

Slightly different as I only own a percentage. But that's exactly what I am doing.

I want to be mortgage free ASAP, without being silly about it. Not doing as you have suggested. Have seen how having a mortgage at 60 can drag people down.

Conrad

Harry_Powell wrote: »

Equity is built from HPI far quicker than from mortgage repayment.

Indeed.

I have some very wealthy clients with no intention of repaying capital. Recently an Architect downsized in his late 50's. He took an I/O loan of £250k in the 80's on property for which he paid £400k. It's the largest home (a veritable mansion with redwood Sequoia trees and yew hedges) in a village.

He just sold it for £2.2m TAX FREE and repaid the £250k. Not too bad.

Harry_Powell

Thrugelmir wrote: »

Is it? All the stats point otherwise. Decreasing home ownership, rising age of FTB's etc. Its a generational love affair. From those who know nothing else, and have yet to feel the full cold winds of what a recession actually means.

Plenty of rampant bears on here who are desperate to buy. The love affair continues into the next generation - even though it might be tough love.