Rents to soar again in 2012...

HAMISH_MCTAVISH

crash123 wrote: »

How long can that continue? .

A long way yet.

IveSeenTheLight

geneer wrote: »

As I understand it Lite bought his 2007 properties using IO mortgages.

You wrong again geneer.
My mortgages had always been repayment until very recently.
This helps rapidly repay the equity helped by my tenants.

With rates so good as they are at the moment, I have chosen to chnge the business model so they are IO and thus allow me to utilise the profits as I choose.

It's good business sense, but I doubt you'd understand that.

geneer wrote: »

Its a shame. If it wasn't for the millions of "reluctant landlords" poor lite might be getting better rents.

Actually I'm very fortunate to have invested in a strong rental market where the rents are quite high.

I get £850 per month for a 2 bed flat
I have received £1100 per month for a 4 bed property that I've not increased the rents in 5 years because the tenants are still the same and they have been good for the property.
My latest purchase is also a 4 bed property where I expect to get £1300 pcm. I could get much more but I prefer to market my rents lower to ensure minimal if none voids.

You make such general spurious claims, you really don't think about focussing on the local market and economy.

Some areas may be doing quite poorly where you can buy 20% under peak. These may be undesireable areas where the lower end of the market resides, other areas are fairing far better.

IveSeenTheLight

the_flying_pig wrote: »

In other words the 9-year increases are all around 2-3% compound, so a little less than average inflation.

I think you'll find little argument on this.

The next stage we moved on to was considering the reduction in equity and the reduction in mortgage interest costs meaning that the rental profit increased far more than just looking at the income inflation,

You have to look at expenditure as well as income to understand the profits

IveSeenTheLight

geneer wrote: »

What on earth are you banging on about Lite.

The value of your asset, as with shares, can and does change regardless of whether you choose (are are able;)) to sell.

If you are in agreement with this, then agree.
As opposed to launching another one of your diversionary gambits.

The value does change yes, it does not affect the taxable profit.
If you agree with this then agree

geneer

IveSeenTheLight wrote: »

You wrong again geneer.

Yet you state that your on IO mortgages.
So wasn't that wrong.

IveSeenTheLight

geneer wrote: »

Yet you state that your on IO mortgages.
So wasn't that wrong.

Let's look at this again

Originally Posted by geneer
As I understand it Lite bought his 2007 properties using IO mortgages.

Wrong as I bought on a rapid repayment mortgage and converted to IO in Dec 2011 (that's December, not February )


Let's have a simple arithmetic question for you.

If a person has three properties, one on 1.6%, one on 3.99% and one on 4.09%, is it better to: -

a) keep all three properties on repayment mortgages
or
b) put them all on IO mortgages, overpaying the highest mortgage rate property els investing elsewhere that give as better return than 4.09%

Come on, you have a 50/50 chance of getting it right.
It's multiple choice, A or B

the_flying_pig

IveSeenTheLight wrote: »

I think you'll find little argument on this.

The next stage we moved on to was considering the reduction in equity and the reduction in mortgage interest costs meaning that the rental profit increased far more than just looking at the income inflation,

You have to look at expenditure as well as income to understand the profits

I don't really agree with this explanation of the bits I commented on.

Both your topic title ["...soar again"] and the specific post that I commented on ["...how they have inflated..."] very obviously implied a reasonably lengthy recent history of reasonably striking increases.

I daresay you'd have had far fewer responses if you'd simply posted words to the effect of I remind MS-ers that rents have a recent history of increasing broadly in line with general inflation rather than just staying the same year after year, & as such would advise caution in making 'rent or buy' decisions based on rents & house prices as they are today.

As it turned out at least the bits I commented on were nothing at all like this so I decided to type out a quick response to what fairly obviously looked like fairly empty ramping.

IveSeenTheLight

the_flying_pig wrote: »

Both your topic title ["...soar again"] .

I fear you are confusing my posts with others.
I have never used the word soar in this discussion.

I agree rents have risen broadly in line with inflation, I merely pointed out from experience that the end product was a far higher effect given the outgoingcosts had decreased.

chewmylegoff

HAMISH_MCTAVISH wrote: »

http://www.planetpropertyblog.co.uk/wp-content/uploads/2011/12/rents2.jpg



With total rent arrears falling markedly in 2011 despite rents rising, clearly there is room for more rent rises in 2012.

Although admittedly there was a tiny uptick in the numbers in serious arrears from 1.9% to 2.2% of tenants, this is nothing other than the market rationing scarce supply by raising prices until demand reduces.

As we create 150,000 more households each year than we build houses, rents will surely rise again to price out the bottom rung and free up housing for the higher earners who should be buying houses but cannot due to mortgage rationing.

Nice graph, wonder why they chose to just include the very top bit of it and not start the Y axis from 0, you know, to make it unbiased - anyone would think that LSL was a letting agent or something.

HAMISH_MCTAVISH

chewmylegoff wrote: »

wonder why they chose to just include the very top bit of it and not start the Y axis from 0, you know, to make it unbiased - .

Would that make the near 10% increase in rents in just 2 years feel less painful for you?;)