Do you think property prices will double in 10 years?

A_Nice_Englishman

Chichi wrote:

Her deposit of 20K could get her at most £1400 K a year gross interest at 7% in savings account. With a rental yield of 8%, she will have equivalent interest of £5400 a year which will be her rental income. She'd be better, we hope.

We have made allowances for tax and all outgoings associated with a BTL.

Where is this property that is achieving an 8% yield? I would have thought half that would be nearer the mark.

Have you made allowances for an increase in interest rates to, say, 10%, void periods, bad debts, legal fees, repairs and renewals?

ManAtHome

I'm also confused by your mother buying it in your name. Surely you can't get a mortagage (even btl) on somebody else's property? Or is she giving you the deposit and effectively guaranteeing the mortgage? Who will be stumping up if the rent doesn't cover the morgage payments?

F_T_Buyer

If house prices are double today's price in ten years time, a loaf of bread will be quadruple today's price.

mi-key

I really cant see them doubling in ten years - what I think will probably happen is that they will fall around 10 - 20% in most areas over the next 1 or 2 years, then stay fairly static for a few years while wages catch up.

For prices to double in ten years, there would have to be people out there with money to buy, and judging by the amount of young people now with huge debts, I cant see how many of them are going to be in a position to buy over the coming years.

jamminjamaica

master_blaster wrote:

it will if you buy in northern ireland
iv heard anicdotal evedince of propertyies doing that in 1 year
a lot of areas here are going up by 30-50 K over the asking price

glad im selling and not buying

i totally agree with this. i live in northern ireland and bought my first semi detached terrace just under 3 years ago i have just sold it for more than double i paid for it. not bad

AndrewSmith

While we are talking about such certanties, does anyone know definately what the 6 numbers for tonight's euromillions will be?

jamminjamaica

3 10 25 37 42 48

jamminjamaica

just kidding. if only.

Chichi_2

Ooh for once I gotta good discussion going. To reply to the questions basically my mum wants to invest her money in property. She is paying the deposit (15% of purchase price) and the flat goes in my name. I do nothing else except help her to manage tenants etc... I used to have BTL's myself.

I suppose she's given away her inheritance now rather than wait until she dies. I'm running the life insurance so that she gets the flat back without a mortgage if I die. If she dies then I get the rental income and hopefully any increase in equity. OK worse case scenario and the flat is worth less after 10 years and interest rates go sky high, the rent will still cover the mortage payments as the yield is 8% . Even when deducting all the maintenance costs, repairs/renewals, bills, tax etc... there'll be £450 left over each month.

My mum will pay if there's any void periods. That's our agreement.

Chichi_2

We're speculating about property prices rising, but have rents ever gone down or wages???? Come on surely there will eventually be a rise even if I wait 15 years.