A question re: the housing market....

obsessed_saver

Again, true - if the BTL now can afford a mahooossive deposit (or subsidise the mortgage payment with other income than the rental), then it might still make sense as a long term investment.

(but, try not to think that you're the only one to be working hard in this country of 65 million, or your head might grow too big).


Edit: BTL is definitely the way to go forward towards your pension - it's a passive income and should be part of anyone's portfolio. But it must add up for each individual, otherwise, it's loss making.

carpetbelly

obsessed_saver wrote: »

(but, try not to think that you're the only one to be working hard in this country of 65 million, or your head might grow too big).

I don't at all... But it's not just the working hard. It's the being realistic as well with the property you can purchase.

I look at my fiance's brother and see what he and his girlfriend have done.

I've bought a 2bed that;s affordable for me, the misses and her nipper. We have enough space. It's ex council and not the best of areas but it's still nice and a first home and is better than I ever expected for a first home. And all on a repayment.

Her brother and his misses. Overspent. He's even told me they cannot afford what they've bought on an interest only. They've made no provisions for paying capital down the line.

**edit**
they also have no plans for children and have bought a large 3bed house which they both admit isn't a dream house and not in their dream location. But they wanted a 3bed though they're not using the spare rooms as they thought they would get equity from it.

When I was growing up I remember the advice my father gave me. You're first house will always be hard work. It won't be the nicest house and probably not in the nicest area either. But it will be your home. Enjoy it, love it, decorate it how you wish to. You might make money if and when you come to sell it, you might not. Just don't think of it as an investment and remember it's your home. It's like your first car or love, you'll never forget it.

Saying that, my old man did waffle on at times
**edit**

It's just not sensible what some people are doing.

Guy_Montag

carpetbelly wrote: »

I get rather annoyed that every man and his dog seems to think it's their divine right to purchase a house. I worked really really hard to get a deposit together and sacrified a lot to get my first house which I am now in.

Yes, you're right people shouldn't think they have a divine right to buy a house, on t'other hand it should be a realisable aspiration for everyone who works.

If we are going to have a rentier society, we need strong rights for their tenants - stronger than we have today. See, for example, the 4 threads in the last fortnight to the effect of "Help, my LL's being repossessed & I'm being evicted".

sm9ai

Ms_Piggy wrote: »

But if all these people are renting, then surely things will start looking up for BTL? I'm not being awkward, just interested!

Not entirely, how many people do you know who have a spare room?

Probably quite a few. When hard times come these will be let out.

Therefore increasing the supply of rental.


This might not happen of course, its all unknown, but it seems likely

pamaris

As far as BTL goes, the trouble is that the market has been a bubble fed bubble for at least the past year, probably longer... Many BTLs can only afford the massive deposits required for those FTB type homes because they bought their own home at the "right time (5+ years ago)... so they take equity out of that, and buy more properties that give them more equity to buy more BTLs. In the meantime, FTBs in their late 20s and 30s are living with parents and renting, saving their cold hard cash earned from their wages. The wages just do not stack up as quickly as the instant equity that in many cases adds up to £100's a day.


In regard to BTLs jumping into the market after prices drop... well if they can fuel the deposit with surplus rental income or capital gains then more power to them. However if they are counting on equity withdrawal to finance the deposit, it just will not be easy to come by if the assets which secure that equity are falling in value.

Guy_Montag

carpetbelly wrote: »

I don't at all... But it's not just the working hard. It's the being realistic as well with the property you can purchase.

I look at my fiance's brother and see what he and his girlfriend have done.

I've bought a 2bed that;s affordable for me, the misses and her nipper. We have enough space. It's ex council and not the best of areas but it's still nice and a first home and is better than I ever expected for a first home. And all on a repayment.

Her brother and his misses. Overspent. He's even told me they cannot afford what they've bought on an interest only. They've made no provisions for paying capital down the line.

It's just not sensible what some people are doing.

But why should we not all have "nice", big McMansions? There's plenty of land (contrary to popular belief), plenty of cheap Polish workers to build them. The only constraint is planning permission.

obsessed_saver

Guy_Montag wrote: »

But why should we not all have "nice", big McMansions? There's plenty of land (contrary to popular belief), plenty of cheap Polish workers to build them. The only constraint is planning permission.

Seriously, you don't want high rise blocks of flats every where.

obsessed_saver

carpetbelly wrote: »

Her brother and his misses. Overspent. He's even told me they cannot afford what they've bought on an interest only. They've made no provisions for paying capital down the line.

It's just not sensible what some people are doing.

That's the bubble we're talking about. Banks giving massive multiple income mortgages just so people can reach that much further. Their customer have to save every penny just to pay the interest (ie. working hard for the bank), and the bank just sits back and see the money roll in... until some thing tips the scale and people lose jobs, have a baby, can't afford payments, house price goes down, the word "sub-prime" gets thrown around, Citybank writes off $11bn dollars, etc. :eek:

pamaris

Another thing– Perhaps this is slightly OT... but anyway we do need a government that has a bit more of a long term balanced view of this... if their policy is to inflate house prices at any cost and keep prices artificially high, they will lose the workforce that they expect to finance their pensions. Young people will seek opportunities and a better quality of life further afield.

sm9ai

carpetbelly wrote: »

I get rather annoyed that every man and his dog seems to think it's their divine right to purchase a house. I worked really really hard to get a deposit together and sacrified a lot to get my first house which I am now in.

Everyone works really hard(well sort of). You are almost suggesting those who cannot afford a house don't work hard.

And remember that shelter is one of the essentials of live.

In my opinion it is criminal that some houses sit empty.