When will house prices go back to 07 levels

chucknorris

IveSeenTheLight wrote: »

Safe to say your nnot concerned about the 8-10% drop from peak then.

How about rental income? How have they faired since you bought?

No I'm not too concerned about where values are now, but that said obviously I would like to maximise profits when I do eventually sell. Therefore my focus is on when to sell up, which will probably be in about 10-12 years and hopefully will be in a much better market.

It will be a fine balance between not being too greedy and waiting too long and therefore risking getting stuck withe the properties in the next recession and waiting long enough to realise additional profit.

My rental income has increased by an average of about 38% since 1999 and 125% since 1991.

Generali

chucknorris wrote: »

No I'm not too concerned about where values are now, but that said obviously I would like to maximise profits when I do eventually sell. Therefore my focus is on when to sell up, which will probably be in about 10-12 years and hopefully will be in a much better market.

It will be a fine balance between not being too greedy and waiting too long and therefore risking getting stuck withe the properties in the next recession and waiting long enough to realise additional profit.

My rental income has increased by an average of about 38% since 1999 and 125% since 1991.

Interesting that the rent has risen about half as much again than inflation on the earlier purchase (RPI=83%) yet since 1999 it has risen by a fair bit less than inflation (RPI = 46%).

Of course, total return is likely to be very good given the rise in house prices in the period, even if you were to 'price to sell' (I realize this isn't what you plan to do). I guess the latter figure represents the crowding of the market with BTL becoming a mass phenomenon.

Qualitatively, rented housing seems to have improved hugely with the advent of BTL so the falling real rent I would guess also comes at a higher maintenance cost.

chucknorris

Generali wrote: »

Interesting that the rent has risen about half as much again than inflation on the earlier purchase (RPI=83%) yet since 1999 it has risen by a fair bit less than inflation (RPI = 46%).

Of course, total return is likely to be very good given the rise in house prices in the period, even if you were to 'price to sell' (I realize this isn't what you plan to do). I guess the latter figure represents the crowding of the market with BTL becoming a mass phenomenon.

Qualitatively, rented housing seems to have improved hugely with the advent of BTL so the falling real rent I would guess also comes at a higher maintenance cost.

Although it might be my memory letting me down I don't think there were any poor rental market years between 1991 and 1999 but there was between 1999 and current date. I think that may (at least in part) explain the subdued performance for the latter period.

As for the former period I think it might possibly be attributable to the fact that Battersea became a more popular place to live during that period.

IveSeenTheLight

chucknorris wrote: »

My rental income has increased by an average of about 38% since 1999 and 125% since 1991.

So in essence, your property debts have remained static or reduced whilst your rental income on the same initial investment has increased.

Looks like that rents don't need to increase in line with inflation as the debt is not being inflated.

Mix in the costs of servicing the debts reducing and it adds even more to the profitability of the LL.

I have one property I've not increased rents for 5 years as the tenants have been good and look after the property.

My second property has seen a 14.2% increase in rental income in the last 5 years.

Although my rents increases may not be matching inflation, I've been able to repay more of the mortgage than originally planned as a result of the lower mortgage interest costs.

chucknorris

IveSeenTheLight wrote: »

So in essence, your property debts have remained static or reduced whilst your rental income on the same initial investment has increased.

Looks like that rents don't need to increase in line with inflation as the debt is not being inflated.

Mix in the costs of servicing the debts reducing and it adds even more to the profitability of the LL.

I have one property I've not increased rents for 5 years as the tenants have been good and look after the property.

My second property has seen a 14.2% increase in rental income in the last 5 years.

Although my rents increases may not be matching inflation, I've been able to repay more of the mortgage than originally planned as a result of the lower mortgage interest costs.

We quite often give current tenants a bit of a run with the rent held at the existing rent, because there's so much work generated at a tenancy change that we often prioritise an easier life over maximising profit.

We can always catch up with the rent when the tenants do eventually move out or when a significant margin between actual and market rent occurs.

As my mortgages are low margin trackers I have just been saving the extra profits (although it's a problem finding value atm with savings bonds), my wife however who also owns a few investment properties was on SVR's and has now paid off all her mortgages (last one a couple of months ago) apart from our joint mortgage which is a tracker (0.38% above base so not worth paying off).