Is a Buy to Let worth it in the current political/economic climate?

theartfullodger

Martico said:

............

Dumping a substantial proportion of your savings into Premium Bonds may not be not the wisest investment decision.

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Max holding is £50k, usually not a substantial proportion of assets, but I agree, don't have too many eggs in (any) one basket.

I've got £50k in premium bonds, usually get something every month, but assets spread widely elsewhere also...

silvercar

People go into BTL for the income and capital growth, has to be part of a balanced portfolio. 
When the government was limiting the amount people could put into pensions by punitive tax measures, it was an attractive part of an investment strategy. But it is only a part of the picture.

Problem is that for people who chose their location wisely they have now seen capital growth, so selling out means a CGT bill that not all are prepared to face.

Sarah1Mitty2

theartfullodger said:

Martico said:

............

Dumping a substantial proportion of your savings into Premium Bonds may not be not the wisest investment decision.

............

Max holding is £50k, usually not a substantial proportion of assets, but I agree, don't have too many eggs in (any) one basket.

I've got £50k in premium bonds, usually get something every month, but assets spread widely elsewhere also...

So in line with what I said, 50k in PB`s and the rest widely diversified (not BTL IMO, but you bought yours long ago?)

Sarah1Mitty2

silvercar said:

People go into BTL for the income and capital growth, has to be part of a balanced portfolio. 
When the government was limiting the amount people could put into pensions by punitive tax measures, it was an attractive part of an investment strategy. But it is only a part of the picture.

Problem is that for people who chose their location wisely they have now seen capital growth, so selling out means a CGT bill that not all are prepared to face.

Another big problem is that the people who would have bought an ex-BTL two years ago can no longer afford to do so without a big price cut, the landlords still looking to exit will be doing so at much lower prices than they had hoped.

CSI_Yorkshire

So the big problems are that the prices have gone up and that the prices have gone down?

Hmmmm.

MobileSaver

Sarah1Mitty2 said:

silvercar said:

People go into BTL for the income and capital growth, has to be part of a balanced portfolio. 
When the government was limiting the amount people could put into pensions by punitive tax measures, it was an attractive part of an investment strategy. But it is only a part of the picture.

Problem is that for people who chose their location wisely they have now seen capital growth, so selling out means a CGT bill that not all are prepared to face.

the landlords still looking to exit will be doing so at much lower prices than they had hoped.

The landlords still looking to exit will be doing so at much higher prices than they originally paid all those years ago, in part thanks to people like you paying their mortgage for them for all those years... I don't think many will be upset at the prices they achieve!

Sarah1Mitty2

CSI_Yorkshire said:

So the big problems are that the prices have gone up and that the prices have gone down?

Hmmmm.

No, borrowing costs have gone up and sales volumes have gone down, meaning it is far harder to just pop an ex-BTL flat on the market and get a buyer, and nearly impossible to get a new landlord buyer because all the legal changes plus falling house prices and rising debt costs make it a losing investment, you would be better off sticking money in a money market fund now.

Sarah1Mitty2

MobileSaver said:

Sarah1Mitty2 said:

silvercar said:

People go into BTL for the income and capital growth, has to be part of a balanced portfolio. 
When the government was limiting the amount people could put into pensions by punitive tax measures, it was an attractive part of an investment strategy. But it is only a part of the picture.

Problem is that for people who chose their location wisely they have now seen capital growth, so selling out means a CGT bill that not all are prepared to face.

the landlords still looking to exit will be doing so at much lower prices than they had hoped.

The landlords still looking to exit will be doing so at much higher prices than they originally paid all those years ago, in part thanks to people like you paying their mortgage for them for all those years... I don't think many will be upset at the prices they achieve!

I would suggest that those trying to exit are more recent landlords who can`t cover the mortgage debt from rent and they are going to lose a ton of money, I suspect many people with no mortgage debt on the property and long term tenants will hang on to the revenue stream, especially if they are older.

CSI_Yorkshire

Sarah1Mitty2 said:

CSI_Yorkshire said:

So the big problems are that the prices have gone up and that the prices have gone down?

Hmmmm.

No, borrowing costs have gone up and sales volumes have gone down, meaning it is far harder to just pop an ex-BTL flat on the market and get a buyer, and nearly impossible to get a new landlord buyer because all the legal changes plus falling house prices and rising debt costs make it a losing investment, you would be better off sticking money in a money market fund now.

These money market funds that you keep recommending appear to be considered almost the worst of all possible options by the people (including many IFAs) on the savings and investments board.

MobileSaver

Sarah1Mitty2 said:

MobileSaver said:

Sarah1Mitty2 said:

silvercar said:

People go into BTL for the income and capital growth, has to be part of a balanced portfolio. 
When the government was limiting the amount people could put into pensions by punitive tax measures, it was an attractive part of an investment strategy. But it is only a part of the picture.

Problem is that for people who chose their location wisely they have now seen capital growth, so selling out means a CGT bill that not all are prepared to face.

the landlords still looking to exit will be doing so at much lower prices than they had hoped.

The landlords still looking to exit will be doing so at much higher prices than they originally paid all those years ago, in part thanks to people like you paying their mortgage for them for all those years... I don't think many will be upset at the prices they achieve!

I would suggest that those trying to exit are more recent landlords who can`t cover the mortgage debt from rent

So even in your worst case end-of-the-world housing market apocalypse (which is definitely going to be much more bigly than all the other housing market Armageddons you have wrongly predicted over the last 15 or so years) you are talking about a tiny fraction of the 2.5 million private landlords in the UK being affected...