Looking on the positive side: Why falling house prices are a good thing

Really2

StevieJ wrote: »

I am a bit confused about that, are rents now only the same now (adjusted for inflation) as they were in 1994/5 when the housing market was at rock bottom? Any LL answer that one?

Pass, but if we saw flat nominal prices from then or 50% falls now it stands to reason there would be little reason to increase rental rates (or scope to do so) .

If it is far cheaper to buy than rent it is iron on that rents cant move up.

StevieJ

Emy1501 wrote: »

What my parents get is pretty much the same if inflation is taken out.

So yields were treble what they are now?

Emy1501

chucky wrote: »

let me get this right... they're only in it for the yield...

they earn a yield of 5% but property drops by 10%.... they're really going to be exclusively into BTL just for the yield...

sorry to put it so bluntly but you're parents were in it to make money and to make profit through investing in property.

nothing else - they were fueled by wanting to make money.

The average mortgage on the the properties are about 40-50K each property rents for 650-850 each. At 2.2% mortgage I will leave you to work out the yield.

As i say they will not sell the properties they will just leave them when they die.

chucknorris

StevieJ wrote: »

So yields were treble what they are now?

The first investment property I bought in 1991 had a yield of 13% but don't forget interest rates were very high then too. Another reasom why buying back then turned out to be a good investment

Really2

Emy1501 wrote: »

The average mortgage on the the properties are about 40-50K each property rents for 650-850 each. At 2.2% mortgage I will leave you to work out the yield.

As i say they will not sell the properties they will just leave them when they die.

At least £4K-£5K PM income. Nice if you can get it for no work.

So do you think they would be making that if HPI never kicked off?

Emy1501

Really2 wrote: »

At least £4K-£5K PM income. Nice if you can get it for no work.

So do you think they would be making that if HPI never kicked off?

HPI has meant more BTl which has kept rental yields in check. Rents have not risen in line with HPI. They should be much higher when you take into immigration and short stay workers etc.

julieq

Maybe look up SPECIAL PLEADING on wikipedia Emy.

Anyway, if your parents won't sell, it'll end up being down to you to sell them for less then they're worth at that time to help younger generations.

I'd be willing to wager you won't.

MINDBLOWING hypocrisy.

Emy1501

julieq wrote: »

Maybe look up SPECIAL PLEADING on wikipedia Emy.

Anyway, if your parents won't sell, it'll end up being down to you to sell them for less then they're worth at that time to help younger generations.

I'd be willing to wager you won't.

MINDBLOWING hypocrisy.

As I have said before I will give my share to my kids. Only way they will be able to own if some of you get what you want.

Also what exactly would me selling 2 houses at less than worth achieve at the costs to my Kids? I want prices fall back in real terms which makes them more affordable. I have never suggest that I am some rich bloke that can make things better for the future generations.

julieq

I'm sorry, you really are a disgrace. You have parents with their snouts deep in the property speculation trough - and yeah right, they DEFINITELY want prices to reduce for other generations, that's why they're pocketing 90% capital growth and 5x average rental monthly income, I bet I'd be able to afford a social conscience on that sort of money - but you're perfectly happy to justify what they're doing even if they don't match their warm words with substantive action.

And you dare come here and lecture other people on the evils of HPI.

Nothing wrong with being a BTL landlord. It's a form of investment. No problem with parents passing on the benefits of their investments to their children or onwards to grandchildren. But I really do have a bit of a problem with someone who wants it every way possible, a reduced cost house, wealthy parents, and wealthy children. It's hypocrisy on the grand scale.

If you want to reduce HPI, then start yourself. Persuade your parents to sell at a discount. Sell at a discount yourself. Rather than hoping that other people will suffer the misery of negative equity so you get what you want.

System

I hope prices drop, I own a small country with a few thousand properties in and it's really unfair that people there can't afford to buy houses off me.