House prices up? But asking prices are falling!

AnotherJoe

cells wrote: »

the UK private rental sector is about 5 million units, and there are about 2 million landlords most of whom only have 1 BTL

These people who have rentals are not that different a profile from owners. eg roughly something like 1/3rd own outright. 1/3rd have small mortgages and 1/3rd have bigger 50-80% LTV mortgages.

the UK private rental sector is not that high a percentage its close to the French levels and lower than the German levels.

Now now we cant be having any actual facts here, especially ones that dont fit the agenda of the crash proponents.

Anyway they will just rubbish your facts by saying vthey met a bloke in the pub whose cousin owns two BTLs, and they also have a mate that got into difficulties, had to sell his BTL and as a result had huge capital gains to pay so that proves BTL is awful as the mate is in a quandry, doesn't know whether to buy a Porche or a yacht with the money.

pop_gun

http://hiring.careerbuilder.co.uk/news/almost-one-third-of-british-workers-live-paycheck-to-paycheck-careerbuilder.co.uk-survey-finds

I wonder how many people are living 2 pay cheques away from homelessness?

Everything is affordable until it isn't.

cells

I am wondering if we are entering a buying opportunity?

I've seen a few properties that look like they are well priced. a flat that looks to be a possible good rental and it would fetch ~5.6% gross yield or effectively closer to ~5.1% if you amortize the initial transaction costs (stamp duty and solicitors fees) and initial refurb over 25 years or a house at ~4.8% on the same terms

One side of me is tempted the other side is fearful of the recent changes in politics and taxation.

economic

cells wrote: »

I am wondering if we are entering a buying opportunity?

I've seen a few properties that look like they are well priced. a flat that looks to be a possible good rental and it would fetch ~5.6% gross yield or effectively closer to ~5.1% if you amortize the initial transaction costs (stamp duty and solicitors fees) and initial refurb over 25 years or a house at ~4.8% on the same terms

One side of me is tempted the other side is fearful of the recent changes in politics and taxation.

what areas?

if they are in inner london then i would say its worth it (unless there is a catch).

otherwise yes politics and taxation are very likely to keep prices from rising a lot or even to fall. another thing that scares me and to think about is buying a property you will no doubt have an investment in sterling of some size (even 20% deposit on a 3-500k property). brexit has taught us about currency risk and the need to be globally diversified. so the 5-6% yield sounds good but overall return in say dollar terms compared to another investment may be very poor....

p1212

chucknorris wrote: »

I don't buy into your 'trend'

http://www.telegraph.co.uk/business/2016/09/06/londons-million-pound-homes-hit-hardest-by-brexit/

http://www.telegraph.co.uk/business/2016/09/06/redrow-shrugs-off-brexit-burden-to-secure-record-profit/

Everything apart from "below 150K" is worsening (=getting better).

Also the average london house is on the green line.

By the way very clever, while you are trying to talk up the market here, you are selling your properties. Are you scared of a crash?

cells

economic wrote: »

what areas?
if they are in inner london then i would say its worth it (unless there is a catch).

Z2 Hackney. Certainly achievable prices look a lot better today than asking prices did 6 months ago.

otherwise yes politics and taxation are very likely to keep prices from rising a lot or even to fall.

A £500k purchase already has an inbuilt £32k 'house price crash' in the form of the higher stamp duty and legals. That is quite a big hit although in my case I think I may be holding for 30 years so its a lower hit annually than someone who might be thinking of holding for 10 years

another thing that scares me and to think about is buying a property you will no doubt have an investment in sterling of some size (even 20% deposit on a 3-500k property). brexit has taught us about currency risk and the need to be globally diversified. so the 5-6% yield sounds good but overall return in say dollar terms compared to another investment may be very poor....

I dont think that is much of a risk. maybe I have missed something you can point out?

If putting say £200k down to buy a £500k property the alternative is to put that £200k sterling down in some foreign assets at the current exchange rate of $1.32. There is a risk that sterling falls but also a potential upside that it gains. Also if you live in the UK most of the fall in the value of sterling is covered by the same dollar falls in the stuff you buy within the UK likewise with any gains in sterling is mostly lost in domestic goods costing more in dollars.



My main concern is that the future of London is more fuzzy than it has been for a while. If the old trend of +100,000 continues then buying today especially in inner London is going to look very smart in 25 years time. If on the other hand London goes to +0 we could well see 25 years of stagnant nominal prices and if London goes to negative population growth then we might see a long drawn out HPC and even if its a 15% crash over 25 years the way taxation is that would be a bad investment. I wouldnt delay buying my own home if I was a renter for 15% crash over 25 years but as an investor if that was what was going to happen it would be a terrible investment

cells

Does anyone here have a rightmove account? If so could you post some data

I used to have one a few years back and there used to be very good data on it like how many properties each agent in town has and how long it takes them to sell/rent it.

You can probably get very good almost real time data and if you keep a record you can look at local trends.

economic

cells wrote: »

Z2 Hackney. Certainly achievable prices look a lot better today than asking prices did 6 months ago.



A £500k purchase already has an inbuilt £32k 'house price crash' in the form of the higher stamp duty and legals. That is quite a big hit although in my case I think I may be holding for 30 years so its a lower hit annually than someone who might be thinking of holding for 10 years


I dont think that is much of a risk. maybe I have missed something you can point out?

If putting say £200k down to buy a £500k property the alternative is to put that £200k sterling down in some foreign assets at the current exchange rate of $1.32. There is a risk that sterling falls but also a potential upside that it gains. Also if you live in the UK most of the fall in the value of sterling is covered by the same dollar falls in the stuff you buy within the UK likewise with any gains in sterling is mostly lost in domestic goods costing more in dollars.



My main concern is that the future of London is more fuzzy than it has been for a while. If the old trend of +100,000 continues then buying today especially in inner London is going to look very smart in 25 years time. If on the other hand London goes to +0 we could well see 25 years of stagnant nominal prices and if London goes to negative population growth then we might see a long drawn out HPC and even if its a 15% crash over 25 years the way taxation is that would be a bad investment. I wouldnt delay buying my own home if I was a renter for 15% crash over 25 years but as an investor if that was what was going to happen it would be a terrible investment

i just think as has been mentioned many times on mse that as part of ones investment portfolio it is best to be globally diversified and therefore to avoid home bias. buying an investment property, given prices of property, is a huge chunk of ones total assets denominated in sterling and based in the uk. i just think its better to be more diversified, but of course i dont know how wealthy you are, for all i know you may have billions outside of uk so buying uk property wont even create any sort of bias.

i think when buying to let, the focus should be on rental income and how to get the est return through that. capital appreaciation is a bonus but the main aim is to generate positive cashflow. so prices shouldnt matter too much unless you plan to sell at a certain time. not sure your age but i am in my early 30s and so even at these sky high prices its probably worth it to invest as i have a large time horizon. however i would also be putting all my eggs in the uk pretty much, which i want to avoid as want t ostay globally diversified.

chucknorris

p1212 wrote: »

By the way very clever, while you are trying to talk up the market here, you are selling your properties. Are you scared of a crash?

Talk up the market :rotfl: you mean to the 20 odd posters on here, are these other examples of me talking up the market:

chucknorris wrote: »

I think shares are now a better investment than London property. Due to the current high price of London property (lower yield and less scope for real term capital gain)

chucknorris wrote: »

London house prices might have already reached an all (real term) high, I think that it is possible that I will not see house prices doubling in London within my lifetime (I'm 59 in Jan).

chucknorris wrote: »

I can't help thinking that property prices in London (where BTL is more prevalent) will dip or at least stagnate

chucknorris wrote: »

I've said this already, if I was starting out today, I wouldn't invest in property, I would of course buy my own home, but I wouldn't buy investment property.

I could go on, but I think my point is made, don't you?

cells

i think when buying to let, the focus should be on rental income and how to get the est return through that. capital appreaciation is a bonus but the main aim is to generate positive cashflow. so prices shouldnt matter too much unless you plan to sell at a certain time.

I dont agree, the capital side is just as important as the rental side, up or down. Of course I would accept that the rental side of the equation is more known and the capital side is more crystal ball future prediction

I think it would be a bad call to invest in London residential if I thought prices were going to fall by even small amounts say just 10% in 10 years. If that were the case it would surely be better to invest elsewhere via far more tax efficient methods eg shares in ISAs or even just to pay down debt

not sure your age but i am in my early 30s and so even at these sky high prices its probably worth it to invest as i have a large time horizon.

Right now my crystal ball is cloudy. A year ago I would have said that in 30 years London will be at least +3 million population and booming. Right now I think it could be +0 million if the brexit kicks in with tough migration rules.

however i would also be putting all my eggs in the uk pretty much, which i want to avoid as want t ostay globally diversified.

Yes I suppose it makes sense although I dont personally see it as a necessity not unless I had >£10m net which I dont.