Something to cheer the renters up

Pobby

Whilst cells has proved himself an !!!-le I have thanked dopester for this,
``There are a lot of people who've seen the property market rise well beyond any measure of actual affordability compared to earnings over the past 11 years, fuelled by a torrent of cheap money which people chose to borrow at 5, 6 and 7 times past their earnings

That's priced out anyone with any measure of logic about the value of money & anyone who knew the HPI mega-bubble could not continue in this way.

And it's made all the worse by a million amateurs and speculators who fuelled the HPI on cheap money who bought more property for their 3 year old kids as an investment - leaving many young professionals still renting, when in previous decades they would be home-owners getting on with their lives.``

Yep, the whole darn hpi stinks!!!!

ali82

Pobby wrote: »

Whilst cells has proved himself an !!!-le I have thanked dopester for this,
``There are a lot of people who've seen the property market rise well beyond any measure of actual affordability compared to earnings over the past 11 years, fuelled by a torrent of cheap money which people chose to borrow at 5, 6 and 7 times past their earnings

That's priced out anyone with any measure of logic about the value of money & anyone who knew the HPI mega-bubble could not continue in this way.

And it's made all the worse by a million amateurs and speculators who fuelled the HPI on cheap money who bought more property for their 3 year old kids as an investment - leaving many young professionals still renting, when in previous decades they would be home-owners getting on with their lives.``

Yep, the whole darn hpi stinks!!!!

Thats very true!!

count_rostov

cells wrote: »

question: why didnt you just put cash aside and save up to buy.

answer: houses go up in value.

i hope you lose your house along with your 3 x BTL.
if that makes you smarter to risk and gambling, its worth every penny!

also vote for gordon, since his national bank is now fleecing you :rotfl:

I can't belive these posters! There's no need to be so nasty and vindictive.

confused_landlord

If you can rent out a room in your house you could get around 6,000 tax free. I would also do away with the estate agent. Its good that you are looking at alternative sources of income.If you could just hang in there, it could get easier. Other countries are experiencing wage inflation, no reason why the UK cant too.

As inflation picks up, a loan with a fixed rate of interest is a great investment. However, since your rate is not fixed things will definitely not get any easier. But, it is a valuable learning curve as some of the others have pointed out. Having said that, HousePriceCrash was set up around 2000 or 2003 to state that houseprices were due a big to fall. I would be surprised that if the current crash in prices took them back to even 2003 levels, so 'brocken' and 'clock' spring to mind.

guyrulius

confused_landlord wrote: »

If you could just hang in there, it could get easier. Other countries are experiencing wage inflation, no reason why the UK cant too.

I'm sorry but that is a spectacularly poor suggestion.

It could get easier, it could get very much worse.

Where is the evidence to suggest the UK will experience wage inflation?

People should deal with what they do know and not idle speculation.

We know the OP has a shortfall between her btl mortgage and the rent.
We know that at the moment her credit rating is intact.
We know that the market has experienced some falls in house prices.

General inflation is rising but so far wage inflation is not and for the time being there is no indication that will change.

The sensible course of action would be to minimise any potential losses whether that's increasing income or selling the house.

Sometimes the truth is a bitter pill, but better to make a tactical withdrawl to fight another day rather than spend years trying to extracate yourself from the war of attrition that is serious debt. I've been there and it's not pleasant.

minimoocow

I can't believe some of the responses on here - talk about kicking someone when they are down!

I just wanted to offer some support to the OP as we are in a similar situation. Bought a BTL a few years back on a repayment mortgage with the intention of using the income to pay off the mortgage so that if we ever had children the income could be used to pay their uni fees if they wanted to go and then after that fund our retirement - we are talking a long term plan and for us it was always about the income not the capital growth for us.

I am sorry some people have been priced out of the market but don't feel I have any other choice than to fund my own retirement or to assist any potentional children through uni give the high level of fees these days and BTL was a good option at the time.

We were "amateurs" but did do a lot of research and attended a landlords course so we knew what we were getting into.

Having said that after a nightmare with some tenants we have reassessed and put the property on the market, found some buyers and will hopefully exchange soonish. To the OP I would say - is this something you could consider - it does truely feel like a weight has been lifted not having to worry about tenants anymore!

MMC

kazd

OLS wrote: »

Am I one of the few who reads this as her NOT doing it for monetry gain i.e being greedy? Maybe Im missunderstanding something but surley if she was doing it for money and greed she would have got the BTL and be planning on selling it in a year or so and reaping the 'profit' she made from it, from what Im reading her kids are young and she was wanting to get a house to give to them when they finish UNI which Im gathering will be about 10 years (more for her youngest 8yrs old) so that THEY had their foot on the ladder, so reading between the lines she would be signing the house over to them at this point therefore gaining no profit from the property - its just unfortunate for the OP they can't afford the mortgage on the SVR

Maybe Im reading it wrong

Hugs to OP though and hope you figure it out soon - all I can suggest is going to Debt Advice or CAB and see what they advise - Oh and the best advice I can offer is to ignore Cells as he is coming accross as a !!!!!! and TBH I think he is doing it for the attention!

Ols

You have it pretty much spot on, I don't know where my kids will end up going to uni, the idea was that a house would be sold enabling them to buy in the area that they are going to uni in. This could be here or even the USA, personally I would rather they got the hell out of this godforsaken country.

We are not overstretched as such in that my husbands salary apparently is plenty to cover both mortgages (although personally I don't agree not if you want to eat) but going by what you can actually borrow nowadays well until just recently of course. When we got married it was 3 x single income and 2.5 x joint.

However, it does mean that things will be tighter so that I won't be able to save for various things. I am the type that likes to have the money to pay not get a loan, obviously a mortgage is slightly different.

frugalista_2

Hello kazd

Disclaimer: I'm a "property bear", and a (fairly) young renter but I post on the far more sophisticated (and polite) forum globalhousepricecrash.com, rather than housepricecrash.co.uk, which I am afraid is rather full of "fundamentalists" these days.

Whether you should cut and run:

It is rarely wise to trade in and out of the property market but on the other hand you seemed to have bought at the top and we are still in the early stages of the slump so it may be worthwhile in this case. It seems to rest on the following questions

Most importantly:

(1) Do you and your partner have very secure incomes?
(2) Can you maintain a decent quality of life indefinitely whilst still funding the shortfall between the rent and the mortgage?

If the answer to both questions is yes, then consider holding on to the property. If the answer to either question is no, get rid of it asap.

To deal with the SVR the obvious thing is to remortgage your main house to say 75% LTV and use this to bring down the BTL mortgage to something where a decent deal is available. However, I wouldn't be surprised if you have to wait for some time before doing this, e.g. because the right deal is not available yet or because you cannot do a remortgage on your main property.

I would refrain from putting the rent up while the current tenants are there. The standard model is that you change the rent in between tenancies. Only amateur landlords try to raise rents with sitting tenants. Professionals know that the bad feeling it creates is not worth the very slight rental income increase.

Obviously when it is time to change the rent, you can only change it to what the local rental market will bear, not just to whatever figure suits your finances.

Eventually there will be wage inflation in the UK which will support rent increases but do not count on significant wage inflation in the short term. The UK economy is not structured for big wage increases at the moment.

If you do get rid of it, you will need to price to sell of course and recognise that the market is in free fall for certain property types and at best pretty tough for others. Even selling is a risky option in cash flow terms. As soon as it goes on the market the tenants will start making plans to move out. They may well move out before it is sold. You will then not be able to re-let it and you'll have to pay the full mortgage every month while it is on the market, which could be months and months depending on luck and the property type. If this scenario is one which will tip you into arrears or other non-linear hardships you might want to just hang on for cash flow reasons.

Best of luck.

frugalista

guyrulius

Frugalista, a small sound of reason. Good post.

kazd

johnny_storm wrote: »

The fact of the matter is, this was stupid and you are going to lose a lot of money. The amount of money will depend on how quickly you accept this fact, and take action.

You can either bleed £420 a month for some years, or sell now and take the hit in one go.

If I were you, my first port of call would be to chat to my exisiting tenants and see if they might be interested in buying the property with a generous discount. This in my mind is your easiest cheapest way out.

If not, put the property on the market now priced to sell. It will be tempting to try and hold out for more money, but there is a real chance that doing will mean that you dont sell and you will lose more and more.

You maybe tempted to weather this storm out. But ask yourself what happens if house prices do drop by 50%. The couple who currently rent will no doubt want to buy at those prices and you could really struggle to rent it out again. Imagine an empty house with 50% negative equity costing you £1000 a month. That will be the bridge point, you arent there yet thankfully.

I am one of those nasty housepricecrash people, perhaps had you actually used that forum before jumping unprepared into a market you knew nothing about you would not be in this position now.

Good luck with whatever you decide.

The first question I asked our agent was what price should we put the house up for to sell quickly. I was told that nothing at all is selling and that we should try and find another way round it ie re-mortgage. We have been offered another possible mortgage which has arrg fee but would save £100 per month but we would be tied in for three years.

The tennants we have in the house currently are very happy there and are looking to stay for the long term by that I think they mean at least a year or so and we do not want to sell the house from under them, we also are reluctant to increase the rent because whilst it might be a bit on the low side I don't think I could justify hiking up their rent to what a neighbour is asking.

So on one hand I want to just get shot but on the other we have a duty to our tennants.