Something to cheer the renters up

slipthru

I also say price to sell and cut your losses. Keeping hold of that property will lose you to much money and time spent worrying.

moneysavinmonkey

yield is calculated on the annual rent divided by the value of the house.
it is quick way to compare property with other types of investments.

the reason the income is negative is because the OP has a mortgage... if the interest on the loan is greater than the yield that's when the trouble starts!

edited to say the term 'yield' in relation to property has a very specific meaning and is not the same as a crop yield!!

neas

So the OP intended to buy cheap so her kids were fine... hoping that the market would inflate more.....

So.. her kids are fine but less fortunate ones have to live in cardboard boxes?

Its everyone for themselves mentality... so i have some sorry for you op.. but not full sorrow sorry.

Most likely the prices you bought the houses at.... which your thought could only rise were already out of my limit as a couple FTBer.... you shoulda seen this coming.

Sell em cheap realise the loss you made and the wealth gets redistributed back to those that it was stolen off.

Rick62

ncooper1974 wrote: »

You're saying that anyone, not just the OP, can clear a BTL mortgage and still claim relief on the interest element as if the mortgage was still in place?

What I am saying is that any loan for the BTL can be claimed, it does not have to be a loan secured on the BTL property. If you just paid it off (from a bonus/inheritance) there would be no interest to claim. If however you took a further advance secured on your main residence and you used this to reduce your BTL mortgage, keeping a clear audit trail, then you could offset that interest against your rental income for tax purposes.

Personally, for protection, I would also tell the IR in advance what I was doing and get their written confirmation that it would comply.

sikejsudjek

I too am from HPC. I got out of BTL in 2005, and paid off my main mortgage.

Whatever you do is a gamble. But I believe house prices are headed for a major correction, and ultimately a drop in rents. Most people will try to hang on on the hope that the market will recover. However there are several reasons why that won't happen.

Banks can't find a market to sell on their dodgy loans - so its a return to historic lending models of 3.5x income and proof of earnings. As long as that stays in place house prices are massively over valued at present. We are seeing massive rises in the cost of living which aren't being matched by wage inflation. Food, energy and fuel are likely to continue to rise. None of this makes homes more affordable - and no matter how many people want houses, they will not be able to afford them at anything like today's prices.

So when you put all this together, risking a hit now by selling could be a smart move. If you get out of this by keeping your main residence, you'll be doing better than many others. Sadly this is going to be a very difficult time for the UK economy. It has the potential to rival the great depression of the 1930's.

Super_Ted_2

Hi OP, I will declare I am also from HPC. (you will find me there under the same name)
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I'm sorry on a personal level that you have got into trouble with your BTL purchase. I hope that you are able to resolve your position with the minimum of loss and disruption to your family.
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However I will honestly say that I do hope you loose your BTL property one way or the other to free up your property for owner ocupyer purchase and to bring prices down. I am not interested or making any judgement call on what your motives were on the purchase. Even if we assume the very best of intentions then the mechanics of BTL would be the same, which is to use leveraged capital to mortgage the income of your tennants.
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The access to capital for use in this manner is most common amongst the older property owning generation who have been able to withdraw equity from house purchased pre-boom and borrow greater sums (leverage) on the back of it. This has lead to a massive transfer of wealth from the young to the old from the have nots to the haves this is not sustainable.
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It is precisely becuase of widespread behavior such as yours that you feel you must help your children in this way. Ironic huh? But at a wider level you and your actions are a symptom not a cause.
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Unfortunately the ability to highly leverage capital has been a feature of a massive global credit expansion which you may also have noticed in the 0% credit card deals, low rate loans, equity withdrawel etc... of the last decade. That period is now over, we are entering the phase of the economic cycle known as credit contraction (credit crunch is baby talk), mortgages will be more expensive and harder to get, 0% credit card deals will disapear and with less borrowed money sloshing about the highstreet we will all become a bit poorer. Sound familiar?
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Anyhoo best of luck, i know that might sound odd from someone hoping you loose a house which I am sure you are attached to. I hope you come out financialy nuetral, I don't believe someone needs to be bankrupt to learn a financial lesson.
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ST
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(As a BTL I think you should head over to HPC and read some topics by a poster called "paddles" on BTL LTV margin calls)

olibrofiz

I cannot believe how nasty and scornful some posters on here have been!

So what if the OP bought the house with the idea it would go up in value - she'd earmarked the profits to help her kids in the future. And it's ONE house, unlike people who make a living out of BTL, surely it's them who should be the target of the nastiness, not someone with ONE BTL house?

And just an idle thought, but if people can't afford to buy, won't rents go up as more people will have to rent?

MissMoneypenny

Quite a few BTLs for sale in my area (just outside zone 6) and they have been priced to sell.

Some of them are also trying to rent out their empty properties, at the same time as they are trying to sell.

TGXbuyer

Kazd

I cannot add to the advice on your specific situation wrt the BTL, although (as a renter myself) I'd recommend putting the rent up a little - I'd put up with a modest increase if it was less than than cost of moving (£500?) + avoid hassle of moving furniture, myself and family (particularly if they have kids). Every one has their limits, but I'd suggest a £30-£40 is unlikely to push it?

One area I may be able to offer some specific advice is around your jewellery business - I help to run a successful indie e-tailer and may have a few pointers for you? The business is run after the kids go to bed for the most part also - one thing you really need to be careful of is compromising quality time with the nippers so is second job really worth it, particularly when you'll probably be able to make just as much with your business ?

Best of luck
TGX

ncooper1974

BLOO_LOO wrote: »

No, hes saying you can claim back the interest on some of the COST of the remortgage, as if the original were still in place. Remortgaging hasnt removed the NEED for the finance, and its this need that counts as a business cost.

Thanks for clearing that up. I thought he meant that but wanted to double check