Buy to let for student son

ruthl_2

We have three children. We helped two of them to buy flats in Edinburgh to give them a foothold in the property market and now they live in London. Both are covering their mortgages with a small profit, but the main point of this plan is to allow them to benefit from capital growth when they buy their next property which is unlikely in the next two or three years. The first flat was bought 9 years ago and the capital growth has been good, the second was bought 4 years ago and there has been little capital growth. My husband and I both have good jobs and will retire in about 5-10 years with a good pension. We accept that buy to let is a risky business and we will need to help if there are large bills for these properties. We use a factor to manage the properties and we have never had trouble finding tenants quickly. My question concerns our third son who has another two years at university in Dundee. He does not intend to live their when he finishes. We had always planned to buy a property in Edinburgh, where we know the market and a good factor, for him and let it. However reading through the buy to let threads, and views about buying at the top of the market I wonder if we would be better to put aside a deposit now and aim to invest it at a good rate of interest, rather than actually buying a property. We have good rates of interst on the two mortgages above but I think it unlikely that we will get anything much less than 5% on the new property. So the question is -Buy now or invest a deposit? I am a beginner at manging my money so more likely to use a savings acoount than buy equities. Thanks

brit1234

Becarefull, prices are likely to fall for the next few years and not recover for about a decade (like Japan before). Better investing in property closer to the bottom rather than at the top and risk all that negative equity.

ruthl_2

brit1234 wrote: »

Becarefull, prices are likely to fall for the next few years and not recover for about a decade (like Japan before). Better investing in property closer to the bottom rather than at the top and risk all that negative equity.

That makes sense, but how can I know that prices have not bottomed out now? Prices seem to be rising slightly in Edinburgh.

new_home_owner_3

brit1234 wrote: »

Becarefull, prices are likely to fall for the next few years and not recover for about a decade (like Japan before). Better investing in property closer to the bottom rather than at the top and risk all that negative equity.

Been saying the same thing for the last 3 years, house prices went up nationally 10 percent from feb last year to feb this year.

There has been a small reduction in sales, but now the elections over and banks are bringing back 90 percent mortgages with decent rates, i suspect by the end of june house sales and prices will start to climb.

I think brit after the emergency budget you need to pack away your soap box and re assess your situation, you seem to think what you think and want to happen will, simple facts are you have been spoutimg the same old crap for three years, and whatever you have said is going to happen has not materialised.

Its like saying Liverpool will win the premiership next season and then when they dont you widen the goal posts and say liverpool will win the premiership in the next century.:cool:

brit1234

ruthl wrote: »

That makes sense, but how can I know that prices have not bottomed out now? Prices seem to be rising slightly in Edinburgh.

Its differcult to say but what we do know is we are still at the near peak of the bubble. Homes are at the limit of affordability with interest rates at 0.5%, all this did was delayed the problem. So when rates go up, or mortgage rates independant of BOE rates prices will come down. Even now monthly figures have leveled off and started to fall.

The video below I hope will reinforce this.
http://articles.moneycentral.msn.com/video/default-ap.aspx?cp-documentid=fc637dd2-8ad2-4d52-875b-549778cf0ffb



Also this chart shows you where to invest best, we are presently at the top of the second peak.

brit1234

new_home_owner wrote: »

Been saying the same thing for the last 3 years, house prices went up nationally 10 percent from feb last year to feb this year.

new_home_owner you invest now then. Would you like to trll the original poster how you recomend committing mortgage fraud and others to do it.

As for the last 10% rise that was caused by dropping interest rates from 5% to 0.5%. Then low mortgage approvals being disportiatly distorted by purchases at the high end of the market by foriegn investors due to the weakpound, and government schemes sch as homebuy, shared ownership etc rigging land registr figures.

You really think prices can go higher when the government mortgage fiance runs out and the banks have to pay them back. The banks will have to rely on savings which are at an all time low.

Its all about the fiance.

new_home_owner_3

brit1234 wrote: »

new_home_owner you invest now then. Would you like to trll the original poster how you recomend committing mortgage fraud and others to do it.

As for the last 10% rise that was caused by dropping interest rates from 5% to 0.5%. Then low mortgage approvals being disportiatly distorted by purchases at the high end of the market by foriegn investors due to the weakpound, and government schemes sch as homebuy, shared ownership etc rigging land registr figures.

You really think prices can go higher when the government mortgage fiance runs out and the banks have to pay them back. The banks will have to rely on savings which are at an all time low.

Its all about the fiance.

Im still waiting for you to show me this mortgage fraud you claim i have done and told others to do.

As for the rest of your crap youve been posting the same old !!!!!! for the last three years, why is it going to happen now?

What you dont seem to realise is house prices have gone up, and this is with limited buyers, has they needed large amounts of equity or a massive deposits to get a decent mortgage.

Now three years on and the 90 percent mortgages are coming back and some of these first time buyers are going to be able to get on the housing ladder, i know of quite a few people who are looking now, but have been waiting for the 10 percent deposit deals to come back and now they are here.

Banks make money from lending barclays are already reporting massive profits.

http://www.dailymail.co.uk/money/article-1250834/Barclays-profits-hit-11bn-record.html

property.advert

brit1234 wrote: »

Its differcult to say but what we do know is we are still at the near peak of the bubble. Homes are at the limit of affordability with interest rates at 0.5%, all this did was delayed the problem. So when rates go up, or mortgage rates independant of BOE rates prices will come down. Even now monthly figures have leveled off and started to fall.

The video below I hope will reinforce this.
http://articles.moneycentral.msn.com/video/default-ap.aspx?cp-documentid=fc637dd2-8ad2-4d52-875b-549778cf0ffb



Also this chart shows you where to invest best, we are presently at the top of the second peak.

Just when was this graph compiled ? Before the event or after the event ?