The Next Nail in the Coffin

westernpromise

economic wrote: »

it has a place if you can time the market well.

The evidence is that nobody can. There is whole nother forum inhabited by people who didn't.

You are still thinking over horizons that are far too short IMO.

westernpromise

Filo25 wrote: »

The idea of timing the property market is great in theory but very hard to do in practice, I just bought as a FTB myself, well aware of the prospect of greater challenges for London property this year than there have been previously, but its a long way from that to saying a collapse is likely this year, more likely scenarios are slower price growth or a moderate correction.

And as long as you're paying the mortgage off faster than the property's price is falling you'll have no negative equity to worry about anyway.

An FTB who takes a 5-year fix needs to care only about the price in 4.5 years' time, when s/he starts to think about remortgaging and the LTV that will apply. Lower LTV = better mortgage rate. What the nominal value does in between is of academic interest only because if you're on a fix you can't sell anyway without incurring penalties that alter the economics.

And if you're paying 3% over 5 years then in 5 years' time you'll have paid off 15% of the loan. As long as the property value then is 85% of what you paid or more, you're in the clear.

economic

i think excluing own homes (as everyone needs a place to live and theres obvious huge benefits of this vs losses in value of your home) buying investment properties or any other investment for the long term is a risk i truly believe taking a long term view is a gamble as anything can happen during that time. look at japan.

westernpromise

cells wrote: »

Also at 18% corp tax vs 40-45% income tax you must think more than half of landlords dont declare.

I'd be astonished if they pay even 18%. Don't forget that in Germany a corporate landlord can offset depreciation against income, which typically is depreciation over 40 to 50 years. A BTL landlord can't do that.

So spend EUR 100 million on flats in a market where prices don't go up and you can knock 2.5% of that off the rental income every year (and loan interest or bond payments as well). That leaves you cashflow positive but with very little net profit on which you can be taxed.

Filo25

westernpromise wrote: »

And as long as you're paying the mortgage off faster than the property's price is falling you'll have no negative equity to worry about anyway.

An FTB who takes a 5-year fix needs to care only about the price in 4.5 years' time, when s/he starts to think about remortgaging and the LTV that will apply. Lower LTV = better mortgage rate. What the nominal value does in between is of academic interest only because if you're on a fix you can't sell anyway without incurring penalties that alter the economics.

And if you're paying 3% over 5 years then in 5 years' time you'll have paid off 15% of the loan. As long as the property value then is 85% of what you paid or more, you're in the clear.

That was pretty much my thinking when I locked in for 5 years, push the remortgaging down the road a little so that I have paid a fair amount of equity down, hoping to overpay and pay about 25% down in the first 5 years, although time will tell if that is overoptimistic!

Generali

chucknorris wrote: »

I think some of them will probably look back with bitterness, but really they have to take that responsibility themselves for not buying, but of course it doesn't help if a group of people are trying to convince you otherwise. At least those people eventually woke up, what is truly amazing is those that have been there from the start, if there are any long term HPC members like that, maybe not.

It's a classic example of groupthink.

Nick0101

Sorry to come into this thread on page 11 and with a tagent, but aren't mortgages becoming a bit "old hat" these days? Are there now advantages to purchasing property through 'crowd lending' where capital is equally (if not more) available than through a bank, and the same rules on mortgages would not apply?

An example company that currently operates in this space (in place of a bank) would be Landbay.co.uk

wotsthat

chucknorris wrote: »

I've just looked at the figures more closely, when Crashy first advised me to sell up (July 2014) our property values were £300k lower than they are now, and if we had invested the equity in the stock market back then, that investment would now be £340k lower (the market is currently down about 8.5% since then). That is a total difference of £640k.

As long as Crashy's been here he's being saying the time to sell is now. Funny how he doesn't mention he thought the same thing in July 2014, 2013, 2012, 2011 etc.

That he sold in 1998 and rented ever since can't be taken into account either because he wasn't into houses before he found HPC. The rent he paid prior to that doesn't count.

At least Crashy won't ever be buying and we get to keep him. Not like the rest of the crashalcoholics - very noisy non-buyers but oh so quiet when they slink off and buy.

westernpromise

Nick0101 wrote: »

Sorry to come into this thread on page 11 and with a tagent, but aren't mortgages becoming a bit "old hat" these days? Are there now advantages to purchasing property through 'crowd lending' where capital is equally (if not more) available than through a bank, and the same rules on mortgages would not apply?

An example company that currently operates in this space (in place of a bank) would be Landbay.co.uk

Landbay rather undermines its own pitch by going big on the fact that investment is secured on bricks and mortar while conceding that unfortunately said investment isn't protected by the FSCS.

cepheus

BRITAIN has pledged to do all it can to help the country’s hard hit buy-to-let landlords. As of today, anyone buying a home that is not their main residence will face a three percent surcharge in stamp duty, prompting calls for support networks and public subsidy. Landlord Martin Bishop said: “I bought this house specifically to rip off students. Now I’m going to have to pay a little bit more than I previously would have paid......

http://www.thedailymash.co.uk/news/society/britain-rallying-round-buy-to-let-landlords-20160401107696