House prices down 0.9% Nationwide report out

Generali

IveSeenTheLight wrote: »

I believe this calculation is only worth utilising when making an assessment ion whether a property is a worthwhile investment.

One you become the owner, it's better to evaluate against the investment or equity.

Yield is used to compare investments against each other so yield is:

income from an investment / cost of replacement (aka current market price)

by using that measure you can, for example, decide that it's better to sell your shares in BP to buy shares in Shell.

BTL is a funny one because it's a business rather than an investment IMO so yield isn't as important a metric as cash flow for example. However many people treat it as if it's the same as owning a share or a bond and yield is what it is.

ninky_2

HAMISH_MCTAVISH wrote: »

Property is relatively cheap up here, and incomes relatively high.

But the weather is really crap much of the time.

you can't put a price on sunshine imho (i'm sure someone will try in future when countries enter weather wars).

Really2

Graham_Devon wrote: »

Interesting idea.

My understanding of this is the bull side of the fence need to try to make the bear side look like morons.

The bear side, just [STRIKE]let the bull side[/STRIKE] get on with it and do that themselves

Corrected that for you, you put to many words in.

Generali

IveSeenTheLight wrote: »

I believe this calculation is only worth utilising when making an assessment ion whether a property is a worthwhile investment.

One you become the owner, it's better to evaluate against the investment or equity.

I agree. Yield is a comparative measure or at least a measure that is well suited to comparing investments.

Ultimately, BTL is really a business not an investment in the same way that buying bonds or shares is an investment. You invest (or not) in a BTL but you run it as a business.

wheeliebin_2

Figures for one or two months are fairly irrelevant. The main problem at the moment is getting finance (with so many cuts around and the lenders not actually lending).

The driving force of people looking for accommodation and lack of building will be around for a long time.

I dont think we'll ever see the ridiculous increases we have in the past but property is still an excellent investment. Compare a mortgage of 240pm against rent of 1250 which is the case on a property we own.

What I'd like to know is what happened to all the crashohloics that were waiting to buy at the bottom of the market. Didnt it go low enough for all the sour grapes crowd ?

Average over the last decade was still over 8% with only 6 quarters showing annual drops...

Thrugelmir

Generali wrote: »

BTL is a funny one because it's a business rather than an investment IMO so yield isn't as important a metric as cash flow for example. However many people treat it as if it's the same as owning a share or a bond and yield is what it is.

BTL is a business. As you can lose more than your initial stake. The real return comes from a taking a calculated risk on rental income, interest rates and property prices. Any combination of which could result in a negative return. Thereby requiring further capital injection.

Buying a share means that you can only ever lose your initial investment.

doire_2

phil_b wrote: »

You guys should meet up and have a beer.

That would be my worst nightmare

doire_2

Joeskeppi wrote: »

Oops, being a hypocrite again, go and tell off Dirk while you're at it.

Bad Dirk. Happy now?

IveSeenTheLight

Generali wrote: »

Yield is used to compare investments against each other so yield is:

income from an investment / cost of replacement (aka current market price)

by using that measure you can, for example, decide that it's better to sell your shares in BP to buy shares in Shell.

current market price however is not the likely return you will get from a property investment after the mortgage, solicitor fees etc are deducted.

that's why I said you have to calculate after these deductions for it to have any real merit

Exocet

Bit puzzled by the Nationwide drop. Apparently as more people enter the country we need more accomodation, therefore supply and demand will ensure property always goes up. Oh wait, I think I understand. July and August are peak holiday periods, lots of Brits going abroad for hols meant less people in the country for a while, therefore prices dropped.

Thank goodness it didn't snow. That would have thrown the figures right out.