BTL vs Bigger House?

missile

stphnstevey wrote: »

Nationwide statistics

Average house prices increase per 10yr period from 1960 to 2010, with 10yr % change and average % change per year:

Amount 10yr % Yr %
1960-1970 £2,189 100% 10%
1970-1980 £18,2994 18% 42%
1980-1990 £36,910 163% 16%
1990-2000 £18,111 30% 3%
2000-2010 £85,189 110% 11%
Average 10yr 164% 16%

I have no idea where you get those figures or what you think they mean, but as the IFAs always say, past performance is no guarantee.

Your business plan seems to be based entirely on the assumption that house prices will increase 10% year on year. That seems like very risky gamble to me:eek:.

stphnstevey

missile wrote: »

I have no idea where you get those figures or what you think they mean, but as the IFAs always say, past performance is no guarantee.

Your business plan seems to be based entirely on the assumption that house prices will increase 10% year on year. That seems like very risky gamble to me:eek:.

You said very few people would agree with my assumption of 10% increase per year. So I posted statistics which to prove this
Statistics from Nationwide - as it says in post
Statistics over 50 years - average yearly house price increase over that 50 year period = 16%, so 10% is a conservative assumption.

Past performance is no garantee, but you either use previous statistics to make an intelligent guess (the longer period the better, here half a century's worth of data) otherwise your simply left with just guessing!

I was comparing the return between BTL and investing in your own home - the % house price increase makes no difference as it's applied to both - so use 1% if it makes you more comfortable !!! the returns will still be similiar

mjdh1957

stphnstevey wrote: »

You said very few people would agree with my assumption of 10% increase per year. So I posted statistics which to prove this
Statistics from Nationwide - as it says in post
Statistics over 50 years - average yearly house price increase over that 50 year period = 16%, so 10% is a conservative assumption.

Past performance is no garantee, but you either use previous statistics to make an intelligent guess (the longer period the better, here half a century's worth of data) otherwise your simply left with just guessing!

By all means ignore what other people are saying, but in that case why post on an Internet forum for people to advise you?

Again, do those figures take into account inflation?

Loopgames

Why have you ignored the income from a btl prop.?

geoffky

stphnstevey wrote: »

Over the long term that has been true, even with recessions, over ten years house prices vertially double, sometimes more than this so this is not unusual.

Oh dear, you are deluded...These are not normal times...far from it..
This is a depression..look at the figures..

summerholiday

The figures you use may well be correct.

All I know from what I have seen is that the expenditure and energy to maintain a larger property is higher by quite a bit - you could say a bottomless pit.

From having a gardener to needing a cleaner just to stay on top.

In addition, I,ve seen perfectly good kitchens and bathrooms ripped out on a whim, walls taken away, rsj's put in, and £1000's more spent - thrown at it - in the process of refurbishment, updating or whatever excuse!

Also every time you need to price up a job to be done: flooring/carpeting areas, curtain sizes - much larger, window cleaning, decorating, tiling, fencing, walls, requires much more than a one-person tradesman to get the job done properly and in time.

Even the furniture that looked oversized before reduces to minuscule in larger rooms and in older properties, nothing is of standard sizing and requires experts to manufacture more expensively.

Just a thought. Not trying to rain on your parade as they say!

stphnstevey

geoffky wrote: »

Oh dear, you are deluded...These are not normal times...far from it..
This is a depression..look at the figures..

You must be the deluded one if you don't understand that over the past 50 years there has been several depressions, hence why you look at the figures over as long a time as possible - here 50yrs - look at the figures, even with depressions there are booms which counteract the depressed times and over a long period smooth out the peaks and troughs to show an average HP increase of well over 10% I choose

SkyeKnight

stphnstevey wrote: »

I was comparing the return between BTL and investing in your own home - the % house price increase makes no difference as it's applied to both - so use 1% if it makes you more comfortable !!! the returns will still be similiar

The BTL will win if you use 1% house price inflation so I think you haven't done your maths properly:

BTL:
£5k increase in value - £10k running costs (which you used before?)
= -£5k loss per year

HOME
£10k increase in value - £50k mortgage = -£40k loss/year

missile

I am always surprised when posters asking for advice, get belligerent toward those trying to help them.

anselld

stphnstevey wrote: »

You said very few people would agree with my assumption of 10% increase per year. So I posted statistics which to prove this
Statistics from Nationwide - as it says in post
Statistics over 50 years - average yearly house price increase over that 50 year period = 16%, so 10% is a conservative assumption.

Past performance is no garantee, but you either use previous statistics to make an intelligent guess (the longer period the better, here half a century's worth of data) otherwise your simply left with just guessing!

I was comparing the return between BTL and investing in your own home - the % house price increase makes no difference as it's applied to both - so use 1% if it makes you more comfortable !!! the returns will still be similiar

Your maths is also incorrect.

100% increase in 10 years equates to an annual rise on 7.2% per year for example. You cant just divide by 10.