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Debate House Prices
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Some interesting BTL Stats...
Comments
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shortchanged wrote: »But inflation also affects other things as well Hamish such as repair and maintenance costs..
OK, to give you a real life example.
A friend of mine bought a flat 15 years ago for £30,000. He lived in it until 7 years ago then rented it out when he bought a bigger house.
The mortgage cost for a full repayment mortgage, even at 5%, would be around £160 a month. He reckons he spends about £500 a year on maintenance on average. He does occasionally call a professional, but does all the easy stuff and redecorating between lets, etc, himself.
The current rent is £650 a month, and the current value is around £110K.
Explain to me why he would need to spend another £5300 a year, on top of what he already spends, each and every year, on "repairs and maintenance" for a wee flat. :rotfl:
You really seem to have no clue what it costs to maintain a flat. Even though those costs increase with inflation, they are now, and always have been, a tiny percentage of total returns over the course of a mortgage.“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 -
Yes but you are talking from a point of view when you could buy a house years ago for nowhere near what you have to pay now thanks to the huge HPI of the previous decade this no longer looks like it will happen again.
So basically BTLers today are taking out huge capital loans in comparison to what they would have years ago, which in turn puts them at higher risk with interest rate rises.
By the way Hamish I do see what you are saying but I just think that circumstances are different now and I don't see the capital gains on property that we had over the past decade happening again for a long, long time.0 -
Go on then Hamish, I'll ask you the question again.
If BTL is so fantastic why don't you put your money where your mouth is and start your own little BTL empire now instead of just talking about it?0 -
shortchanged wrote: »So basically BTLers today are taking out huge capital loans in comparison to what they would have years ago, which in turn puts them at higher risk with interest rate rises.
In the very short term, I would partially agree with you. Interest rate risk is greatest in the first few years, before inflation has driven up rents. But it always has been.By the way Hamish I do see what you are saying but I just think that circumstances are different now and I don't see the capital gains on property that we had over the past decade happening again for a long, long time.
I would disagree.
I think 15 years from now you'll look back on the prices of today as ridiculously cheap.
But regardless, capital gains are of little relevance in assessing the remarkable headroom above mortgage and maintenance costs provided by rising rents over 15-20 years. Which is what we're discussing.“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 -
shortchanged wrote: »Go on then Hamish, I'll ask you the question again.
If BTL is so fantastic why don't you put your money where your mouth is and start your own little BTL empire now instead of just talking about it?
I've put in a half dozen offers this year.
Keep getting outbid by those pesky owner occupiers.
“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've put in a half dozen offers this year.
Keep getting outbid by those pesky owner occupiers.
Are these the FTBs that cannot get mortgages due to rationing?0 -
HAMISH_MCTAVISH wrote: »I've put in a half dozen offers this year.
Keep getting outbid by those pesky owner occupiers.
That's the problem though Hamish. BTL'ers need to get properties for rock bottom prices, which in turn I suppose puts downward pressure on house prices.0 -
Are these the FTBs that cannot get mortgages due to rationing?
No, these are the FTB-s with a rich daddy to buy them a house while they go through Uni.
I'm looking in a very specific area.“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 -
Interesting article Hamish, thanks. So reading this, as part of my cunning plan to build a BTL empire I need to invest in two bedroom properties in Milton Keynes at a cost of under £100k per property.
Joking aside, where I live there is quite a shortage of two-bedroom homes, so interesting to see that they are higher yield more widely.Please stay safe in the sun and learn the A-E of melanoma: A = asymmetry, B = irregular borders, C= different colours, D= diameter, larger than 6mm, E = evolving, is your mole changing? Most moles are not cancerous, any doubts, please check next time you visit your GP.
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HAMISH_MCTAVISH wrote: »No, these are the FTB-s with a rich daddy to buy them a house while they go through Uni.
I'm looking in a very specific area.
Blimey. Were you Kate and Wills's landlord?Please stay safe in the sun and learn the A-E of melanoma: A = asymmetry, B = irregular borders, C= different colours, D= diameter, larger than 6mm, E = evolving, is your mole changing? Most moles are not cancerous, any doubts, please check next time you visit your GP.
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