House Prices Up....

cells

economic wrote: »

so it continues to be a good time to buy in london - as long as one has enough deposit.

Two of the big BTL lenders, BM the biggest, and TMW also quite big and competitive have reduced their BTL rates this week. Possibly other lenders too but I tend to keep an eye on BM&TMW

Will possibly help on the margins for sure

The financial system seems to be working correctly, when an unknown hits credit gets cheaper. This is the correct response rather than the crash wisher hoped for response which is that when things get though the government and regulators will act in a way to make them worse

cells

Crashy_Time wrote: »

You are sounding increasingly silly, I take it your illiquid investment is losing money?

That is doubtful the risk for BTL at the moment is not negative cash flow. BTL mortgage rates are down towards the 2.1% fixed for 2.25y mark with £2k fee which means a £500k BTL property has a finance cost of £949 per month vs typically more than double that in rent.

Once in cashflow is positive and quite healthy

Admittedly this is now against the big negative that is the £30k stamp duty on such a £500k purchase.

economic

cells wrote: »

That is doubtful the risk for BTL at the moment is not negative cash flow. BTL mortgage rates are down towards the 2.1% fixed for 2.25y mark with £2k fee which means a £500k BTL property has a finance cost of £949 per month vs typically more than double that in rent.

Once in cashflow is positive and quite healthy

Admittedly this is now against the big negative that is the £30k stamp duty on such a £500k purchase.

exactly. my investment is my home (i dont own btl) and its just so much better then renting. my mortgage costs are fully covered by my flat mate.

for btl i think cashflow even at <5% yields are not the problem as Cells illustrated. the question is future capital growth and future margins (rents falling and rates rising) since a BTL is at least a 5 year maybe 10 year investment specially wit hthe extra stamp you have to pay up front. with brexit fears, economy looking weak for the forseeable future i think now could be a good opportunity to buy another for cashflow but i have my doubts on capital growth in real terms (in london). so i rather look at other asset classes.

economic

Crashy_Time wrote: »

You are sounding increasingly silly, I take it your illiquid investment is losing money?

actually its worth more then i paid still. even if i lose 20-30% it doesnt eevn matter as i can buy another or upsize. being a home owner with mortgage costs covered means i can retire earlier. i feel sorry for you - always scared something might happen and so risk averse that you just dont do anything. you have lost out financially big time. i hope you can learn from your mistakes.

cells

economic wrote: »

exactly. my investment is my home (i dont own btl) and its just so much better then renting. my mortgage costs are fully covered by my flat mate.

for btl i think cashflow even at <5% yields are not the problem as Cells illustrated. the question is future capital growth and future margins (rents falling and rates rising) since a BTL is at least a 5 year maybe 10 year investment specially wit hthe extra stamp you have to pay up front. with brexit fears, economy looking weak for the forseeable future i think now could be a good opportunity to buy another for cashflow but i have my doubts on capital growth in real terms (in london). so i rather look at other asset classes.

You can still get 5-6% on the lower end.

In your circumstances it might be more worthwhile to apply for permission to let and buy the new one as your main residence. There are some perk to that. You would get some capital gains relief on both. Your new mortgage will be at residential rates of 1-1.5% instead of BTL of 2-3%

cells

economic wrote: »

actually its worth more then i paid still. even if i lose 20-30% it doesnt eevn matter as i can buy another or upsize. being a home owner with mortgage costs covered means i can retire earlier. i feel sorry for you - always scared something might happen and so risk averse that you just dont do anything. you have lost out financially big time. i hope you can learn from your mistakes.

Yep extreme risk aversion is what did them in
I do sometimes wish the UK banks offered competitive USA style 15 or 30 year fixes which seem to be the norn over there. That way the house prices will crash in a few months cheerleaders could do a simple rent v 30 year mortgage comparison

When they do a rent v 2 year comparison they freak that in two years time what if rates are at 10%. They don't seem to realise the system is self correcting and self stable. That is to say rates can't and won't reach levels where they are crippling the £6 trillion in depositors will always accept lower rates from the £6 trillion in borrowers over defaults.

economic

cells wrote: »

You can still get 5-6% on the lower end.

In your circumstances it might be more worthwhile to apply for permission to let and buy the new one as your main residence. There are some perk to that. You would get some capital gains relief on both. Your new mortgage will be at residential rates of 1-1.5% instead of BTL of 2-3%

i was thinking about this and decided not to yet. i want to concentrate efforts in moving to a part time job first then maybe in a year will reassess. i currently have half my net worth tied up in my property. i dont want any additional exposure yet.

economic

cells wrote: »

Yep extreme risk aversion is what did them in
I do sometimes wish the UK banks offered competitive USA style 15 or 30 year fixes which seem to be the norn over there. That way the house prices will crash in a few months cheerleaders could do a simple rent v 30 year mortgage comparison

When they do a rent v 2 year comparison they freak that in two years time what if rates are at 10%. They don't seem to realise the system is self correcting and self stable. That is to say rates can't and won't reach levels where they are crippling the £6 trillion in depositors will always accept lower rates from the £6 trillion in borrowers over defaults.

for me it would be good for 30 yr fixed as i dont need to worry about remortgaging if for some reaon i have no or little income.

economic

interesting post by the only person i take seriously on investment and economic matters:

https://www.armstrongeconomics.com/markets-by-sector/real_estate/real-estate-turning-down/

have you Cells or anyone else heard of Martin Armstrong? ive been reading him for a whilst now and hes made calls that have come true.

interestingly hes saying the decine in real estate has begun. if you believe what he says, now is not the time to load up on property. i tend to agree with him. own home is ok. but having a lot of your wealth tied up in property just does not seem like a good idea to me.

chucknorris

economic wrote: »

interesting post by the only person i take seriously on investment and economic matters:

https://www.armstrongeconomics.com/markets-by-sector/real_estate/real-estate-turning-down/

have you Cells or anyone else heard of Martin Armstrong? ive been reading him for a whilst now and hes made calls that have come true.

interestingly hes saying the decine in real estate has begun. if you believe what he says, now is not the time to load up on property. i tend to agree with him. own home is ok. but having a lot of your wealth tied up in property just does not seem like a good idea to me.

We have started to offload property now, my wife has sold (subject to contract) our most expensive property. I intend to sell my 4 Battersea flats as the tenants vacate, if they don't soon, I might increase the rent a little more, so it would be win win, if they stay I get more rental income, but if they give notice I can sell.

We are however going to upsize our home, probably next year, but we will be patient as we want something that we consider perfect for us.