Britain's deflating buy-to-let bubble

mystic_trev

IveSeenTheLight wrote: »

I have 2 BTL properties, one bought three years ago, the other at the start of this year.
The property I bought three years ago has a Rental yield of 9.387% and has increased in value by 88%.
The property I bought at the start of this year has a rental yield of 6.154%
This property has also increased in value by 27% in 10 months

I can't make up my mind if this blokes for real :rolleyes: or just showing the average intelligence of the recent BTL punter

In his first post, he says he's just got one BTL bought at the begining of this year.

At the beginning of this year, I had saved up a little money and was considering placing it all into my mortgage.
I realised though that I could make the money work harder for me, so I re-mortgaged my home to release some capital.
With the released equity and my savings I now had enough to put down a maximum benefit deposit on a buy to let property.
So in short, while I had some money to reduce my mortgage, I have in fact doubled my effective mortgage by now having two properties.

http://forums.moneysavingexpert.com/showthread.html?p=6312135#post6312135

So - You've got two properties and one's your home?!

Then last week he decided to tell us how big his yields were......wait for it, wait for it........

You say you only get a 2% nett yield, however my two properties are returning a 9.49% and 27.16% nett yields.

http://forums.moneysavingexpert.com/showthread.html?p=6533069#post6533069

:rotfl: :rotfl: :rotfl:

IveSeenTheLight

I am real and let me explain.

I released capital from my home to buy a BTL (property 1), since then I have moved abroad and my home became leased property 2. (Mortgage company advised).

I had miscalculated my nett yields,so sorry, they are 9.387% and 6.154%.

Do I make a profit, yes.
Will my properties house prices continue to increase in the long term, yes
Would I consider buying another property to let out at this economic time, yes, however it is important to choose the right property in the right area.

So my situation has changed over the months.
I do try to keep the topic with the thread and dont cross forums ublike some.

It would be good if you had something positive to say rather than doom and gloom rumour mongering

Doc_N

mystic_trev wrote: »

I can't make up my mind if this blokes for real :rolleyes: or just showing the average intelligence of the recent BTL punter

I think he's just trying to protect the value of his property(s) by trying to reassure potential buyers that everything's OK really. If you tell enough people that it's all OK, maybe they'll all tell their friends, and the property price crash won't happen after all. Yeah, right.

Apart from a very small number of unusual places, prices are actually now falling across the UK, and it takes a very brave person to buy an investment property in a falling market.

Pobby

How right you are Trev.Just been looking at these

http://www.rightmove.co.uk/action/publicsite.PropertySearch

Typically these properties sell for around £130k to £150k.At say 5.4,fairly typical interest,On a IO mortgage you are not going to cover the rent.It gets even more of a worry when you factor in repairs,times when they are not rented and all the other downsides.

Doc_N

IveSeenTheLight wrote: »

It would be good if you had something positive to say rather than doom and gloom rumour mongering

It's very difficult for anyone to say anything positive about a market in which house prices, post Northern Rock, are falling across the board, and in which sentiment has now changed completely.

IveSeenTheLight

Doc_N wrote: »

I think he's just trying to protect the value of his property(s) by trying to reassure potential buyers that everything's OK really.

Apart from a very small number of unusual places, prices are actually now falling across the UK, and it takes a very brave person to buy an investment property in a falling market.

I'm not sellling, so no problem there.
I've said many times I'm in for the long term.
Just can't stand doom and gloom merchants trying / hoping / begging to talk the prices down.

Properties in the area I have invested in is still showing an increase, just returned the largest increase for a long time.

I acknowledge there may be a slowing down of the market, a stagnation, small drop in prices. I just don't go along with the crash theory and am confident that my long term investments will stand good.

History shows that property prices always increase in the long term

Pobby

How right you are Trev.Just been looking at these

http://www.rightmove.co.uk/action/publicsite.PropertySearch

Typically these properties sell for around £130k to £150k.At say 5.4,fairly typical interest,On a IO mortgage you are not going to cover the rent.It gets even more of a worry when you factor in repairs,times when they are not rented and all the other downsides.

carolt

History does not always show that prices always increase in the long term. Try telling that to someone who bought at the peak of the Japanese market and is still 50% out of pocket......

Who can say how far things will go? Why is it that you find increases of over 300% in a decade, far outstripping wage inflation, perfectly reasonable and rational, but the idea that prices could go into reverse, and fall by say a modest 50% over a similar period, outrageous 'doom and gloom merchants trying / hoping / begging to talk the prices down'? Far from doom and gloom, that would simply see a return to the long term mean for house prices. The only people for whom it would spell doom and gloom, obviously are those who've overstretched themselves, like those greedy idiots who've just remortgaged their own homes to buy a buy-to-let - but I don't know any of those, do you?!

Remember guys - IveSeenTheLight (not) isn't a disinterested observer - he's someone with a very desperate personal need to talk the market UP. So take his advice that now is a great time to buy with a pinch of salt.....