London Has Peaked

chucknorris

Bubble_and_Squeak wrote: »

surely not
if someone BTLs at todays prices?

What yield would you expect? Don't forget the initial yield is exactly that, i.e. the year one yield which will rise (and often offset by discount mortgages, although I must admit I don't tend to go for those products).


http://www.rightmove.co.uk/property-for-sale/property-47280716.html


http://www.rightmove.co.uk/property-to-rent/property-47141216.html


Those 2 houses have prices/rents in the area that you are/were looking at (Tottenhan Hale) provide a yield of over 4.7%. When we were buying we usually worked on a min of 5%, but it isn't that far way and the alternatives are very poor, that said though, because we are happy with what we already have, we wouldn't be tempted to buy again.


EDIT: I actually viewed that house in 2008, it was very nice, but I wasn't happy with the type of tenants that were viewing the house round the corner that we were attempting to let at the time.

Bubble_and_Squeak

chucknorris wrote: »

What yield would you expect? Don't forget the initial yield is exactly that, i.e. the year one yield which will rise (and often offset by discount mortgages, although I must admit I don't tend to go for those products).


http://www.rightmove.co.uk/property-for-sale/property-47280716.html


http://www.rightmove.co.uk/property-to-rent/property-47141216.html


Those 2 houses have prices/rents in the area that you are/were looking at (Tottenhan Hale) provide a yield of over 4.7%. When we were buying we usually worked on a min of 5%, but it isn't that far way and the alternatives are very poor, that said though, because we are happy with what we already have, we wouldn't be tempted to buy again.


EDIT: I actually viewed that house in 2008, it was very nice, but I wasn't happy with the type of tenants that were viewing the house round the corner that we were attempting to let at the time.

hmmm
i think we need crashy and hamish to have a calculation duel to sort this out!

Bubble_and_Squeak

theEnd wrote: »

I agree. We'll start to see a downward trend on LR in Aug. It won't fall as much as asking prices as I don't think it rose as much as the mad asking prices late '13 / early '14.

i think its significant that new builds are not included in the LR data.
i'm expecting the price of newbuilds fall significantly over the next few months as the chinese and russian money well runs dry.
also, there are loads of newbuilds going up all over london.
the old supply and demand gambit again...

Conrad

Bubble_and_Squeak wrote: »

surely you need to sell up to turn the paper gain into real geld?

And invest it in what? Remember property can be geared so your £50k can be exposed to a £200k asset. Many property investors already have equity ISA's etc anyway.


Long term property investors just sit tight and do well in the round, no need to panic sell. I did sell in 2006 / 7 thinking I was clever. Massive mistake. I did not benefit from falling interest rates and getting back into B2L has been quite a pain in the butt.


I will never sell again (apart from to offload something to buy another or pay off a mortgage perhaps), just sit tight and slowly watch the income rise.

Crashy_Time

Conrad wrote: »

And invest it in what? Remember property can be geared so your £50k can be exposed to a £200k asset. Many property investors already have equity ISA's etc anyway.


Long term property investors just sit tight and do well in the round, no need to panic sell. I did sell in 2006 / 7 thinking I was clever. Massive mistake. I did not benefit from falling interest rates and getting back into B2L has been quite a pain in the butt.


I will never sell again (apart from to offload something to buy another or pay off a mortgage perhaps), just sit tight and slowly watch the income rise.

You would probably do just as well tracking the FTSE? No need to have all the hassle of tenants then?

Crashy_Time

Bubble_and_Squeak wrote: »

hmmm
i think we need crashy and hamish to have a calculation duel to sort this out!

The only calculation I need is the amount of money that leaves my bank account as a rent payment every month. No amount of Hamish pulling out charts or thinking that Rightmove is an absolute barometer of Edinburgh rental prices can change that.

ukcarper

Crashy_Time wrote: »

The only calculation I need is the amount of money that leaves my bank account as a rent payment every month. No amount of Hamish pulling out charts or thinking that Rightmove is an absolute barometer of Edinburgh rental prices can change that.

But it's much more than the interest on a mortgage would be.

Crashy_Time

ukcarper wrote: »

But it's much more than the interest on a mortgage would be.

What about the outstanding debt? I am debt free, I won`t change that to "buy" into an overheated Ponzi.

ukcarper

Crashy_Time wrote: »

What about the outstanding debt? I am debt free, I won`t change that to "buy" into an overheated Ponzi.

Debt free maybe but if you had bought 16 years ago and paid as much on a mortgage as you have rent you could be debt free with a property.

Can you explain how the property market is a Ponzi scheme.

In_For_A_Penny_2

Crashy_Time wrote: »

What about the outstanding debt? I am debt free, I won`t change that to "buy" into an overheated Ponzi.

Except that you will owe at least £400 per month for the rest of your life.