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Debate House Prices
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Some interesting BTL Stats...
HAMISH_MCTAVISH
Posts: 28,592 Forumite
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
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Comments
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Interesting. Julieq harks on about how great the yields are on BTL's and constantly quotes the 7% figure.
However the average seems to be below that and considering these are gross yield figures they are not really that impressive at all.0 -
shortchanged wrote: »Interesting. Julieq harks on about how great the yields are on BTL's and constantly quotes the 7% figure.
However the average seems to be below that and considering these are gross yield figures they are not really that impressive at all.
They rarely are impressive in year 1, the point is that as rents tend to increase in line with inflation interest rates, whereas merely fluctuate. So the later years are very impressive, it's a long term investment.Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
shortchanged wrote: »Interesting. Julieq harks on about how great the yields are on BTL's and constantly quotes the 7% figure.
However the average seems to be below that and considering these are gross yield figures they are not really that impressive at all.
Back in the 70's, 80's and early 90's, it was usually assumed that a 10% yield was necessary to profitably invest in rental accommodation.
But of course, that was also the 3 decades with the highest interest rates in the BOE's 350 year plus history, far above the long term average.
Most informed people today reckon a current yield of a couple of points above mortgage costs (as of course rents will inevitably rise markedly over time with inflation) is more than sufficient.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Not really that great when i suspect many BTl's pre crash were with Mortgage Express and probably at rates of 2.5% SVR at present. Would have expected higher than that to be honest especially when you take into acount the time and effort of a BTL0
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Not really that great when i suspect many BTl's pre crash were with Mortgage Express and probably at rates of 2.5% SVR at present. Would have expected higher than that to be honest especially when you take into acount the time and effort of a BTL
Those are based on current purchase price versus current rent.
The idea behind any long term investment is that the returns increase over time..... So someone that bought a decade ago will be seeing markedly higher returns on their original investment than those listed above.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Most informed people today reckon a current yield of a couple of points above mortgage costs (as of course rents will inevitably rise markedly over time with inflation) is more than sufficient.
As interest rates and therefore mortgage costs are likely to as well.0 -
HAMISH_MCTAVISH wrote: »Those are based on current purchase price versus current rent.
The idea behind any long term investment is that the returns increase over time..... So someone that bought a decade ago will be seeing markedly higher returns on their original investment than those listed above.
How does this work? I live not far from Croydon so how do you make 7-8% gross yields on a property if you were to buy now? Especially as a 2 bed flat which is the typical BTL property goes for around £850 a month?0 -
shortchanged wrote: »As interest rates and therefore mortgage costs are likely to as well.
I think you miss the point. Again.
Over the long term, inflation in rents (income) will erode the "real terms" value of the debt. Making mortgage costs an increasingly smaller percentage of income, even when rates rise.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
How does this work?
I find reading the header of the chart is usually a good start.
Then you may notice the two at the bottom are "total returns", not gross yield.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »I think you miss the point. Again.
Over the long term, inflation in rents (income) will erode the "real terms" value of the debt. Making mortgage costs an increasingly smaller percentage of income, even when rates rise.
But inflation also affects other things as well Hamish such as repair and maintenance costs.
I think you seem to have a very simplistic view of it Hamish.0
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