Invest in properties now or wait?

[hgllgh]

Recession in 2021 caused by continued job losses from the fallout of global 'lockdown' should mean house prices coming down. You need a recession for house price deflation and you need job losses for a recession, so that's still the key metric but there are others...

Even the property 'gurus' and pros also seem to be forming a consensus of house price deflation next year with a perfect storm caused by:-

* landlord tax changes biting harder than in 2020 and increasing beyond 2021 (if you BTL now, seems like SPV company is the way to go).... more BTL's on the market
* Rishi's SD holiday coming to an end
* Coronavirus lockdown continuing.... more airbnb's on the market
* lenders tightening their criteria (which means they see prices coming down too)
* Fear based on hard brexit

If you buy now, leave a 25% - 30% discounted offer on the table and see if you get any takers.

[NowPermOutsideUK]

And no 10% furnished allowance trick
And CGT likely to go up to income tax rate lavels
And evictions now almost impossible for a long time

Not a good time unless you really find a deal

[PCTNN]

How refreshing to see other people out there able to value investments properly ... I thought I was the only one.

To the OP, why this strange affinity for fixing broken toilets at 2am? Why not buy a tax-efficient, low-cost, liquid, balanced and globally-diversified portfolio of stocks, bonds & REITs? Oh, I see, you want to be a sitting duck for the coming wave of tax rises with an immovable, tax-inefficient asset with a P/E ratio above 30 and a pile of headaches known as "tenants". Good luck then matey!

So much truth.

I briefly considered buying a house (2nd property, so huge Additional Dwelling Supplement) and renting out my current flat in the city centre of Edinburgh.
I dodged the bullet big time. The rental market here is crap at the moment; hundreds of ex airbnb flats have flooded the rental market and it's a true race to the bottom!

Flats that would find tenants within a couple of days you see them now stay on the market for weeks and weeks and then progressively lowering the asking price.

So factor in:
- lower rental income
- 1 month without rent while you find/vet tenants
- 10% cut for the letting agency
- rental income now taxed at 40% and who knows next year
- increased mortgage because I'd have to switch from residential to buy-to-let

Investing in buy-to-let would be for me worse than just dumping money down the toilet.

[Lance]

How refreshing to see other people out there able to value investments properly ... I thought I was the only one.

You do realise that is confirmation bias don't you?

[NowPermOutsideUK]

How refreshing to see other people out there able to value investments properly ... I thought I was the only one.

To the OP, why this strange affinity for fixing broken toilets at 2am? Why not buy a tax-efficient, low-cost, liquid, balanced and globally-diversified portfolio of stocks, bonds & REITs? Oh, I see, you want to be a sitting duck for the coming wave of tax rises with an immovable, tax-inefficient asset with a P/E ratio above 30 and a pile of headaches known as "tenants". Good luck then matey!

Couldn’t have said it better then the previous two posts. There is still money to make in property but you have to be a whole lot more selective then just buying a three bed semi and letting it out. I’m talking planning changes office to residential splitting the flats etc

I wouldn’t be buying now and frankly I don’t understand who the hell is buying to keep prices up

[v6g]

there are 0% chances that the property prices will still go up in 2021.
We've been having this discussions for ages now, the fundamentals are just not there.
Price to earnings ratio at least for SE has been continuously going up while inflation has been eroding the value of money at the same time. Salaries have stagnated for more than 12 years.

How refreshing to see other people out there able to value investments properly ... I thought I was the only one.

To the OP, why this strange affinity for fixing broken toilets at 2am? Why not buy a tax-efficient, low-cost, liquid, balanced and globally-diversified portfolio of stocks, bonds & REITs? Oh, I see, you want to be a sitting duck for the coming wave of tax rises with an immovable, tax-inefficient asset with a P/E ratio above 30 and a pile of headaches known as "tenants". Good luck then matey!

[GigiBronz]

there are 0% chances that the property prices will still go up in 2021.
We've been having this discussions for ages now, the fundamentals are just not there.
Price to earnings ratio at least for SE has been continuously going up while inflation has been eroding the value of money at the same time. Salaries have stagnated for more than 12 years.

I am still surprised of how it had such a sudden jump but you cannot underestimate good sales people... "a nation of shopkeepers" only that nobody is selling anything productive. It's just a rentier economy.

My opinion is that the parties with vested interest have colluded with the estate agents and the gov to give the property market a "one last spin". And offload the stock they had onto the naives.
People getting cooked up in their homes, mainstream media spinning wishful narratives that we've all heard, has gotten everyone very excited again. And they've all starting running like kids after the icecream truck waving their fists full of notes.

The only way that I could see this to continue: another package of stimulus, even lower interest rates and hyperinflation.
But that would not be capitalism anymore, it will be some frankenstein between capitalism and feudalism that myself I do not want to be part of.
What will be next, central banks owning 100% of GDP? Will those obligations default with them or will they sell them back to the free markets?
But I do imagine the leading class to be so corrupt that they would just prop it up to infinity, negative interest rates with no regard to young people, meritocracy or economic theories.

Overall I still believe that there are good chances for a harsh economic crisis and 30-40% house price correction. There is still hope in me that this is still capitalism.

[hugebrain]

I've good warchest currently , thinking of buying 2x BTL in North West.

Just buy one obviously. If it works out, then congratulations. If not you can pat yourself on the back for being so smart you didn’t get two...

[GitMaster69]

Or it could mean retiring at 40 and not ever having to deal with any managers or timesheets again! Just think optimistically

So what's the plan, you're looking at properties that offer discount because they are close to maturity on the lease? Is mortgage even possible on such ?

[NowPermOutsideUK]

7% yield - wow, you are a long time deed counting a 7% yield, comparing with the fun you could have with the capital with your family and friends

You might be the richest man in the graveyard


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Or it could mean retiring at 40 and not ever having to deal with any managers or timesheets again! Just think optimistically