Is it a bad time to buy a house as an investment? If so why?

nearlynew

And most people would get the 25k from remortgaging an existing property, so effectively borrowing the full 100% of purchase.

This is often conveniently overlooked.

Graham_Devon

JonnyBravo wrote: »

Graham's right.
More like 50k for maintenance and £134,995 for remortgaging fees and increased interest rates.
You only make £5.




Oh no I better sell.

:rotfl:

Get a grip Graham.

At least I could make my point without implying nonsense regarding the legal fees

All I suggested was that 25k for 25 years rental maintanance and running costs is pretty optimisitic, if impossible and it seems you agreed. So dunno what that nonsense about £5 is.

System

But you didn't complain about the value of the house staying the same for 25 years.

JonnyBravo

Joeskeppi wrote: »

But you didn't complain about the value of the house staying the same for 25 years.

:rotfl:

Yep there are many people who are desperate for BTL not to work.
And for some it doesn't.
But for the vast majority it does.
Now I can afford to be a little blase and say I'm not too bothered whether I make £200k or £250k over the next 25 yrs from my BTL but many would no doubt say I should know this, look to it as proof I'm a fly by night cowboy and that I'll end up losing my shirt.
The annoying thing for them is that them saying it doesn't actually change anything.
It still works for most people. Me included.

Ah well.

the_flying_pig

Timay wrote: »

I know this has probably been asked but I couldn't see anything as straight forward a question as that.

But let's say you don't need to buy a home but you want to buy a home in the uk (first time buyer) Is it a really bad time to buy a house and why?

Almost certainly a trolling post & I'm stating the obvious here but anyway the answer is that it's all in the price.

Firstly it's clear that any house in the country could bring in at least a couple of grand a year in rental income. So it goes without saying that any house you could buy for two grand would be a fantastic "investment".

Secondly it's reasonably clear that no house in the country is worth £100bn. So paying £100bn for any house would be an awful "investment".

Any house that'd be cash flow positive [assuming that mostly bought with debt] or provide a decent yield [if bought with cash] under a reasonably wide scenario of interest rates would probably be a good investment long-term.

homelessskilledworker

Timay wrote: »

I know this has probably been asked but I couldn't see anything as straight forward a question as that.

But let's say you don't need to buy a home but you want to buy a home in the uk (first time buyer) Is it a really bad time to buy a house and why?

Timay, my advice would not be to take ANY advice on the actual timing of buying a home off this board.

Someone like me would say NO WAY!!, but I would say that, just as I can predict what most other posters would have you believe from this board.

There are some brilliant financial sites out there that cover the pro's and con's of buying, there are forums out there that have now been going a few years.

I suggest you read everything you can and then come to your own conclusion, then whatever happens on your head be it, it was YOUR choice.

chewmylegoff

JonnyBravo wrote: »

:rotfl:

Yep there are many people who are desperate for BTL not to work.
And for some it doesn't.
But for the vast majority it does.
Now I can afford to be a little blase and say I'm not too bothered whether I make £200k or £250k over the next 25 yrs from my BTL but many would no doubt say I should know this, look to it as proof I'm a fly by night cowboy and that I'll end up losing my shirt.
The annoying thing for them is that them saying it doesn't actually change anything.
It still works for most people. Me included.

Ah well.

to be fair to graham, hamish's calculation does appear to work on the basis that rents will increase with inflation, but maintenance costs will not. £25k for "maintenance" over 25 years is a bit silly, you're likely going to have to replace everything in the house (including the bathroom and kitchen) over that period (potentially multiple times).

that said, it's not going to suddenly make a BTL a rubbish investment. generally BTL will work as long as you know what you're doing and don't buy a stupid house for loads of money with a horrible rental yield.

you do quite often see people on other boards talking about the BTL they have where the rent doesn't even cover the mortgage - clearly they are getting it wrong.

JonnyBravo

chewmylegoff wrote: »

to be fair to graham, hamish's calculation does appear to work on the basis that rents will increase with inflation, but maintenance costs will not. £25k for "maintenance" over 25 years is a bit silly, you're likely going to have to replace everything in the house (including the bathroom and kitchen) over that period (potentially multiple times).

that said, it's not going to suddenly make a BTL a rubbish investment. generally BTL will work as long as you know what you're doing and don't buy a stupid house for loads of money with a horrible rental yield.

you do quite often see people on other boards talking about the BTL they have where the rent doesn't even cover the mortgage - clearly they are getting it wrong.

Sure, but as has been pointed out neither has he allowed for ANY house price inflation.
I'll have a wild guess that house prices will increase more than any increase in maintenance over 25 years.
Time will tell.

Of course it wans't a seriously detailed attempt to prove BTL works.
For some, nothing will ever prove that.
I guess they just presume we're all in it, and staying in it cos it's going to cost us tens of thousands of pounds over the years, but we just can't see it.

Emy1501

JonnyBravo wrote: »

:rotfl:

Yep there are many people who are desperate for BTL not to work.
And for some it doesn't.
But for the vast majority it does.
Now I can afford to be a little blase and say I'm not too bothered whether I make £200k or £250k over the next 25 yrs from my BTL but many would no doubt say I should know this, look to it as proof I'm a fly by night cowboy and that I'll end up losing my shirt.
The annoying thing for them is that them saying it doesn't actually change anything.
It still works for most people. Me included.

Ah well.

BTL works for some and fails for some. Get it right and you can make good money and get it wrong and you can lose a lot.

The figures quoted don't really add up and to be honest I'm not sure where the OP is going to get an 85% BTL mortgage anyway. Event if he can I suspect the rate will be pretty high which wont make any sense of the figures quoted.

Hamish's figures for inflation are nonsense as well as little chance with average rents at £700 at the moment that someone will average 12.5K a year over 25 years unless he is looking at mass inflation.

JonnyBravo

Emy1501 wrote: »

BTL works for some and fails for some. Get it right and you can make good money and get it wrong and you can lose a lot.

The figures quoted don't really add up and to be honest I'm not sure where the OP is going to get an 85% BTL mortgage anyway. Event if he can I suspect the rate will be pretty high which wont make any sense of the figures quoted.

Hamish's figures for inflation are nonsense as well as little chance with average rents at £700 at the moment that someone will average 12.5K a year over 25 years unless he is looking at mass inflation.

Like I said. Some only see what they want.

An average of 3% rent inflation unreasonable over 25 years?



Sure. You better hope no QE money escapes eh?