Can I possibly buy 2 properties???

beer_tins

SquatNow wrote: »

Also worth pointing out that ARLA the Association of Residential Lettings Agents none-the-less say rents have dropped 7-9% in the last 12 months. yes that's DROPPED NOT RISEN!!!



I calls 'em as I sees 'em.



No wait... YOU'RE stupid! I hereby appologise to the OP, who by comparison is Albert Einstein.

A couple of points... firstly it's not possible to INVEST using borrowed money... "Investing" using borrowed money is merely speculation. You can only invest owned money.

Secondly house prices are THE ONLY factor. Even if the OP never sells the place, his ability to get a good mortgage deal depends on the houses value. In addition any BTL loan would be a commercial loan on commercial terms with commercial LTV rules.

On top of that, his rental income would be dependant on prices too... if prices dropped 50% he would have to compete against the option for possible renters to buy, and more importantly he would have to compete against landlords that had bought after the crash who could undercut his asking rent by 50% bankrupting him.

There are a whole raft of other reasons, but basically, BTL wont stack up again financially until prices have droped 50%.

Cretin.

When did I say you should invest only using borrowed money? I said specifically only to do this if you had enough capital yourself.

You don't think other factors like interest rates, inflation, rental yields etc. have any influence at all in the cost of borrowing?

BTW, the jury is out on whether rents are up or down. It depends on your area, so it's something you have to research, as suggested in my post.

Housing prices are NOT the only factor. As you plainly don't understand this I'm not going to bother answering your posts any further. You seem to be very confident of your own knowledge for someone so clueless.

MissMoneypenny

MissMoneypenny wrote: »

That is because London and the SE is the area where ARLA say they had the most ARLA member offices responding. 6 out the 10 members responding came from London and the SE. (4.1 page 7).

IveSeenTheLight wrote: »

That's fine as long as people understand this.
from above it would seem that they hae benched 40% of responses together as "The Rest of the UK"

Have they. Where do they say that? I did list another area's response percentage in my post that you are quoting from. Not sure why you have assumed "that they hae benched 40% of responses together as "The Rest of the UK". Actually, on the link you gave us, the report says it is 39% and they list all 8 areas responses percentage, with London and the SE being 3 of the areas.

IveSeenTheLight wrote: »

P.S. you must have missed in the report and my post that the ARLA have said on page 31 and 32 that achievable rent is up all over the UK. The only thing I saw down with regards to rents was the percentage of members showing an increase in rents

The achievable rents was over the last six months.

Average weighted rental returns are down from 3 months ago "this time more that reversing the earlier change".
http://www.arla.co.uk/news/0906ARLAMembersSurvey1.pdf

prudryden

I actually had a tenant wanting to know why I hadn't raised the rent when he renewed his AST for another 12 months. He wasn't kidding either, he was concerned. Maybe he thought I was going to sell or something. Anyway, good demand for rentals in my area.

That survey by whats his name - where he got 20% response, probably filled out by a part time student, was positive for rentals at least on the first page.

IveSeenTheLight

MissMoneypenny wrote: »

The achievable rents was over the last six months.

Average weighted rental returns are down from 3 months ago "this time more that reversing the earlier change".
http://www.arla.co.uk/news/0906ARLAMembersSurvey1.pdf

And this was highlighted by myself on http://forums.moneysavingexpert.com/showpost.html?p=11594417&postcount=1

Quote:
Greater London and the South East saw the biggest imbalance.
But Arla said rents were falling as there had been a surge in the number of new two-bedroom flats on the market.

Which is why you must take into context that the ARLA report is heavily biased towards the London and South East area

Full BBC article here http://news.bbc.co.uk/1/hi/business/7443439.stm

Please realise that there are regional variations and I am seeing much more evidence that London and the South East is very different from the rest of the UK

rjgb

As I've learnt from others on this forum, for buy to let to be desirable it needs to give you a (much) better return than simply popping the money into a savings account.

A few fixed rate bonds out there are now 7% ( = 5.6% interest after tax). So, for every £1000 in the bond, when the bond matures that £1000 will have grown to £1056. If interest rates go up, as they are expected to, then better rates should be available in the next few weeks.

With buy to lets, you would need to find somewhere where rent will cover costs (i.e. the mortgage repayment costs and not just the interest payments, letting agents' fees, maintenance, ground rent, service charges, periods when the propery is empty and you have to cover utility and council tax bills, and costs associated with buying and selling the property) AND make 5.6% profit ON TOP. That is hard to come by at the moment, although perhaps you could buy somewhere below market value at auction?

As the value of the property itself will be stagnant or falling for maybe up to two years hence, you cannot currently rely on the value of the increasing value of the property helping you to gain this "profit".

Anyway, I'd say stick the money into savings. Maybe a 1 year fixed bond. Then see if property has settled and begun climbing again in 12 months, and reconsider if it would be a better option.

R

MissMoneypenny

IveSeenTheLight wrote: »

Which is why you must take into context that the ARLA report is heavily biased towards the London and South East area

I have answered that in post 19.

IveSeenTheLight wrote: »

Full BBC article here http://news.bbc.co.uk/1/hi/business/7443439.stm

Please realise that there are regional variations and I am seeing much more evidence that London and the South East is very different from the rest of the UK

Yes I have said before that there will always be regional differences. However, if you are using the ARLA report for your evidence, then read my post 19 again.

Don't rely on those BBC reports for facts, if that is what you are looking for.

I appreciate that you have only become a landlord in the last 18 months and you say that the if the figures are still working for you in your area of Scotland(?), but I just don't think that now is a good time to get into BTL. Falling house prices and falling rents, just doesn't make it a good time to buy.

IveSeenTheLight

Let's call it a day Miss Moneypenny.
I'm getting tired of re-explaining things to you time and again.
I'm happy with my research and the position I am in, if you are then lets all enjoy a happy day

P.S. I was not using the ARLA for evidence, I was correcting the miss quote of Arla's figures

MissMoneypenny

IveSeenTheLight wrote: »

P.S. I was not using the ARLA for evidence, I was correcting the miss quote of Arla's figures

My quotes all came from the ARLA report.

prudryden

I wouldn't call that an ARLA report. It was prepared by an individual who lives in Yeadon, Leeds near the airport (possibly a council estate). I've done surveys myself albeit on a smaller scale and they are totally useless unless you know who answered the survey.

You can send a request to an estate agent. Whoever opens the general post, generally a part timer working their way thru school, may have filled out the questions. A franchise owner doesn't have time for such nonsense.

tbs624

...and around two thirds of LAs are not members of ARLA. Combine this with the low reporting rates from those who are members and it's not really a comprehensive set of stats on which to pronounce a verdict, is it?