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Debate House Prices
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Is it a bad time to buy a house as an investment? If so why?
Comments
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JonnyBravo wrote: »
Of course it wans't a seriously detailed attempt to prove BTL works.
.
You wanna learn how to spell mate.
"The problem with quotes on the internet is that you never know whether they are genuine or not" -
Albert Einstein0 -
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JonnyBravo wrote: »Gah!
I've been naerlynewed!
Don't worry though.
It's only a 'typo'.
I won't keep bringing it up.
100% gauranteed."The problem with quotes on the internet is that you never know whether they are genuine or not" -
Albert Einstein0 -
JonnyBravo wrote: »An average of 3% rent inflation unreasonable over 25 years?
What's average pay inflation currently?0 -
JonnyBravo wrote: »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?
Higher inflation will mean higher rates. With 25% BTL's at about 3-4% above base rates Would not want one at 15% if rates spiral to curb inflation at 2%.
Also based on averages more likely to get £650 for rent rather than £700 if avergage rent is £700 compared to £163000 average property0 -
JonnyBravo wrote: »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.
No, they presume you're in it because you are FILTHY SCUM I should think.
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Thrugelmir wrote: »What's average pay inflation currently?
1.9% is it? Seem to remember that.
You really do think 3% average for 25 years is unreasonable?0 -
Higher inflation will mean higher rates. With 25% BTL's at about 3-4% above base rates Would not want one at 15% if rates spiral to curb inflation at 2%.
Also based on averages more likely to get £650 for rent rather than £700 if avergage rent is £700 compared to £163000 average property
Quick! Change arguments to make sure BTL still doesn't work! 0 -
JonnyBravo wrote: »1.9% is it? Seem to remember that.
You really do think 3% average for 25 years is unreasonable?
At the current time, yes. Little sign of upward pressure. As people will accept minimal rises in exchange for job security in the private sector as a whole.
I fully expect the public sector to be capped for a further period as well.
If property prices fall (correspondingly rents as well) then the fall in real disposable income will be totally manageable.0 -
Bad time yes for simple reasons, UK is not going through high growth in GDP or generally.
Prices could go in either direction but value of housing is not under greater demand by richer indivuals able to pay more. As a sector housing is not especially a better investment now
However its never that bad idea to control your own costs. Rent is a very large cost, investing in your own prospects can pay fine so long as your income is likely secure and in one locationHAMISH_MCTAVISH wrote: »So lets say I buy a 150K house with a 25K deposit. Lets also say that over the next 25 years I generate 310K in rental income. (as rents tend to increase with inflation)
The cost of purchase for me was the 150K, plus interest on 125K for a total of roughly 275K. Throw in another 25K for maintenance and voids, and you have 300K.
So rent of 310K, costs of 300K, and you own a house at the end worth 150K, even with no HPI at all.
You made a 160K profit even if house prices fall in real terms for 25 years....
Its the interest which really kills people and right now that is low.
I took 5% as a reasonable 'low' market rate in normal times, the cost to borrow 125k over 25 years comes to £739.09 per month or £221727 to totally own the house and repay the mortgage
Plus the deposit of 25k thats 246,727
Lost interest of 3% on the deposit over 25 years would have meant it doubled. So thats an opportunity cost of 275k and you then own the house of 150k at the end.
Someone should pipe up here just how much a house costing 150k actually rents out for, is it as high as £822 per month
The point of the housing bubble I think was that house prices went to 50x rental PA , are they at 25x now0
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