Radio5 - houses to rise 40% in 4 years.

Running_Horse

Doc_N wrote: »

Just found this old thread. Still not getting any better, is it? At least, not if you're a BTL merchant who bought at the peak!

Except many are doing fine. I'm no cheerleader for the BTL brigade, but interest rates have been slashed, and as long as the rent comes in, the "value" of the house doesn't really matter. Anyway, look forward to this being bumped again next year.

phlash

Running Horse has a point.

I am a bear, but I still made a BTL property purchase last month. The sums can still add up.

Personally I still believe we have another down leg to come, post election. So above I think I stated -24% from peak within 18 months and we did that depending on your measure.

In the next 12-16 months I think we may see -15% from here. Which should bring us somewhere into the -30 to -35% from peak (Aug 2007).

property.advert

The argument is surely the link between rent and purchase costs. Very simply, if rents equalled mortgage repayments over the term, then one would be stupid to rent. The fact that mortgages often lag rents makes buying even more attractive. Where mortgages outpace rents, then one can factor in an investment yield, tax free, to see which would be best. If renting still comes out ahead, then house prices are too high or, less likely, rents are too low.

Outside of short term flexibility, I have not seen a time when buying and retaining the property for some years did not prove a better option than renting. I do not see that maxim changing going forward.

zet_2

Turnbull2000 wrote: »

Renting works on the continent...

But I do agree that they shouldn't whinge. They should f*cking riot.

I agree with the broad strokes of Turnbull's post. However, the problem, and the difference with some (but not all) continental countries is clustering.

In the UK, the well paying jobs are highly concentrated in London and the South East. Until the jobs are more evenly spaced out throughout the country, then nothing will make housing affordable for young people.

However, all changes have winners and losers, unwinding the London and South-East bubble will be good for the UK in general, however the beneficiaries of the bubble will aim to prevent change.