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Interest rates at 7%
Comments
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Perhaps it's me, but I don't see why people say BTL puts FTBs out of the market?
Surely the FTBs could buy the houses when they become available just as easily as the BTLs? The BTLs don't get them 20 grand cheaper or anything, do they?
Or have I missed something blindlingly obvious?(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
That's right, it is just one of the points in a quite complex debate. As I intimated, people look if they can afford a payment each month and (hopefully) also think if the rate goes up can I still afford it...so affordability is certainly key and how the banks lend these days compared to times past.0
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Yes , I think you have missed something blindingly obvious
A FTB'er "generally" tends to be between 20 and 30
A BTL'er I would guess tends to be older and would already own a house of their own and take equity from
I know some of you will come back and say this is a generalization but that is exactly how I see it
7day week, what do you think a FTB'er currently earns remember as I said before the average for the WHOLE country including every one is 23k... says it all really0 -
seven-day-weekend wrote: »Perhaps it's me, but I don't see why people say BTL puts FTBs out of the market?
Surely the FTBs could buy the houses when they become available just as easily as the BTLs? The BTLs don't get them 20 grand cheaper or anything, do they?
Or have I missed something blindlingly obvious?
Tax relief on their interest payments."Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
seven-day-weekend wrote: »Perhaps it's me, but I don't see why people say BTL puts FTBs out of the market?
Surely the FTBs could buy the houses when they become available just as easily as the BTLs? The BTLs don't get them 20 grand cheaper or anything, do they?
Or have I missed something blindlingly obvious?
2 things:
1. Most BTLers are middle aged baby boomers. They are withdrawing niflated equity from their homes or savings with 30 years compound interest on to put down a deposit. FTBers tend to be younger with less savings and (by definition) no house equity.
2. FTBers can only borrow 4x (or whatever) their own income if they don't want to commit fraud. BTLers are borrowing against the projected rental income from the house/flat. In a rising market, the banks will allow a pretty generous interpretation of what that projected income should be - they've got at least 2 places they can reposess if needs be.0 -
seven-day-weekend wrote: »Perhaps it's me, but I don't see why people say BTL puts FTBs out of the market?
Surely the FTBs could buy the houses when they become available just as easily as the BTLs? The BTLs don't get them 20 grand cheaper or anything, do they?
Or have I missed something blindlingly obvious?
The typical BTL purchaser is richer than the typical FTB, so they can afford to out-bid the FTBs they are likely to be competing with.
As an extreme example, if the prices of two bedroom flats in a run down area have reached £150,000 are appreciating by 8% a year, then people with cash can buy these properties and make a profit. But the typical FTB who would usually buy properties in that area would be unable to afford a mortgage for, say, £140,000, and hence can't compete.0 -
yeah, i get the maths bit... (mathematical background!!)
I'm just a positive person who has more exciting things to do in life than constantly fret about interest rates. I'll leave that to those who have borrowed more than they can really afford.
Life is one big game of chance; you win some, you loose some, but in reality, what's the worst that can happen?? Bancrupt? loosing your home? ok, it'll be crap for a while, but it's only money. family and friends are far more important, whether you're living in a palace, or in a council house.
There's no guarentees in life, so of course interest rates MIGHT rise. Just like we MIGHT get hit by a terrorist nuclear bomb and all get wiped out, or you MIGHT get run over tomorrow... You can constantly spend your life worrying about these things, or you can just live, have fun, and take life as it comes.Should've = Should HAVE (not 'of')
Would've = Would HAVE (not 'of')
No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)0 -
Right, yes....age and equity.... thanks all.
Although....if the house prices are too high for FTBs anyway, well does it matter if BTLs buy them? I don't see how this is putting the prices up, unless the BTLs pay over the odds?
If a FTB can't aford a mortgage on a house for £150k, well they can't afford it, so how is the BTL stopping them having the place?
Sorry to be so dim, economics is not my strong point!(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
There's no guarentees in life, so of course interest rates MIGHT rise. Just like we MIGHT get hit by a terrorist nuclear bomb and all get wiped out, or you MIGHT get run over tomorrow... You can constantly spend your life worrying about these things, or you can just live, have fun, and take life as it comes.
Much more likely to get a dirty bomb attack on London. Most of London would still be livable, but I think it would have a depressive effect on London house prices.0 -
Much more likely to get a dirty bomb attack on London. Most of London would still be livable, but I think it would have a depressive effect on London house prices.
:-) I like your sense of humour!Should've = Should HAVE (not 'of')
Would've = Would HAVE (not 'of')
No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)0
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