Interest rates at 7%

CB1979_2

high IRs = happy people who THINK house prices WILL come down, but alas who STILL can't buy a home (ever heard of a second job, you lazy layabouts? )

high IRs = many happy people like me who have fixed their mortgage AND got a nice chunk in the savings account.

hurray for me

and yes before my stalker BTMan comes on, I still do live with my mummy & daddy, got a g/f a mortgage and savings. think that pretty much covers my life at the min

franklee

Gorgeous_George wrote: »

IRs are relative (not like Uncles or Aunties). 7% is great if inflation is 6% but it's pants (not like trousers) if inflation is 8%.

Equally, 7% with 6% inflation is worse than 4% with 2% inflation.

Just think, all those poor, repossessed people adding to the demand for rental properties.



GG

Can I have a pint of what you're on (beer not blood )

Perhaps I should have been clearer, savers have been screwed as interest rates have been set too low for current inflation for ages. Last time interest rates were 6% what was the CPI? Under 2% IIRC. Up the rates!

Generali

Gorgeous_George wrote: »

My business model is fine, thank you for asking.

I wasn't asking, just assuming. You seem confident about it.

Gorgeous_George wrote: »

The tenanats are responsible for the rent.

That's as may be. In a recession (or depression) LLs may struggle to find tenants capable of paying their own rent. Or may find that the tenant becomes unable to continue to pay half way through their tenancy. In that case the LL is also partly dependant on HB. It's not much use relying on a tenant with no money to pay the rent.

Gorgeous_George wrote: »

Hurdler

This is a really interesting debate... Having cleared a lot of personal debts and extensions to my current mortgage for home improvements, I am considering letting my flat and taking out the equity to help towards a downpayment on a home (and more space to house my ever breeding DVDs and CDs!)...

I did a bit of market research this week and found that in my area - rents for large 2 bed flats varied between £900 (with a particularly snotty estate agent that I am unlikely to use) to £1250 for more focussed corporate lettings. I have £50K or thereabouts on my mortgage so re-financing to BTL only really gives me about £100K equity to take out.

I have to limit myself because the rental income is the key to the amount of equity to free up and alas leaves me £100K short of the kind of place I want/need. The flat is too good an investment oportunity to just sell - it has quadrupled in value in the 11 or so years I've had it!

So MY dilemma is...
1) Do I throw my savings into the highest interest rate thingy I can find and save consistently every month (I enjoy my life to the full but make sure that at least some dosh gets squared away ... took me 37 years to grow up that much!)
2) Do I throw dosh at my current mortagage - get that down so that when I finally DO re-finance for a BTL Mortgage, I effectively get the benefit of more equity for my deposit

My recently widowed mother has FINALLY stopped nagging me to find a nice man and settle down to give her grandchildren... but her latest nag is "BUY A HOUSE!"... so she's kindly matching my savings as an incentive...
I am half tempted to put my savings sweep in to the mortgage and save her money and maybe get the best of both worlds... or am I robbing Peter to pay Paul?

Would be really interested in other people's views...

CB1979_2

if your mum's name's Peter then yes you definately are robbing Peter!

Hurdler

Arf Arf!
I tried to explain all this market research gubbins to her yesterday.... Lord I aged!
Thankfully her latest project at the moment is operation "Renovate the house"... so she's spoiling all the builders, electricians, decorators etc with regular cuppas and biccies!
She gets a kick out of the fact that my not so bright decorator recommended I soften the impact of colours on my walls with "Natural Hussain"... I think he actually meant Natural Hessian... and that tickled her so much she has gone for that in the living room!

Anyhoo - back on topic I suppose... I was flickin' back up thru the messages... and I have to say... if it hadn't been for the hikes up in the IR, I wouldn't have had the incentive to actually cut up a couple of credit cards this week (even though I pay my cards off in one go these days)...

My ex and I disagree very resolutely on the value of considering BTL as an investment. He's a salesman and thinks I'm insane for not looking at it as a making money scheme... whereas mates who are surveyors and letting agents all told me to stand in front of the mirror for a month, morning and night repeating to myself "you will NOT make money (initially) from BTL"...

mrsS_2

hi- Gorgeous George has stated that landlords dont get tax relief on the interest on their mortgages-

am confused here- as when I was in practice as an accountant a few years ago we always put the interest on the tax return and got tax relief for it if the mortgage was specifically taken out to buy a particular property. Obviously the capital repayment was excluded.

have the rules changed?

not trying to be difficult- genuinely want to know

kingkano

I think he might have been being pedantic. They dont get tax relief but they CAN deduct it from their income (ie the rent) as an expense.... atleast that's how I understood it.

savingforoz

Yes, mortgage interest on a buy to let is fully allowable against rental income to get tax relief - unless I and all the other accountants I work with have been getting it wrong all this time!