New thread: house prices

[Rantor]

What happens when he (& all the other landlords) raise the rents?

It has been tried in various areas - the market tends not to support it and they end up with an empty property.

The pressure on rents is actually downward in many areas because of over-supply in some sectors (2 bed 'apartments' especially.)

[sasguru]

Wait till all BTL landlords form a cartel

[Bagpuss]

About the only thing in that statement that makes any sense is the word "simple" which describes you nicely.

And what is your theory then for rents stagnating while house prices rise?

and don't come up with the simple supply and demand answer because it's apparent there is lots of housing supply

[tim123]

What happens when he (& all the other landlords) raise the rents?

They're building an estate of 300 appartments aimed squarely at BTL (they have electric heating!) a few streets away from me, so that (a rent rise) just ain't gonna happen.

tim

[Clippy]

Your question would fit nicely into the forums of:

www.housepricecrash.co.uk

Those guys there spend all day and every day discussing house prices. One guy has over 10000 posts - all about the same subject. Its's amazing how they can do this and keep each posting unique text, I think.

In fact, just for a laugh, I'll put a link to this posting on that site. Expect 10 or 15 new non-IT contractors to register on ContractorUK.com to write their views...

Don't bother!

[IR35 Avoider]

But why will the new BTL buyer pay a higher price for it? Not for the rent. It must be that he too expects an increase in price that he can profit from later, even if he has to rent it at a net negative yield in the meantime.

Buyers work on the "greater fool" theory, that it doesn't matter if they pay a stupid price for something, because an even bigger idiot will be along shortly to pay even more for it.

I invest based on the real income I expect. For real assets (property and shares) I expect them to broadly keep up with inflation and the "real income" is what I expect on top of that. My current expectations are

• for cash deposits and bond funds, the real return is the interest yield less the rate of inflation (currently about 6%-3% = 3%)
• for property, the real retun is the profit on the rent (currently 4.5% for commercial property, don't know for residential as I don't have any, but it's less than that.)
• for shares, the real retun is the reciprocal of the cyclically-adjusted PE ratio. (Currently expect 4.6% annual return on shares over and above inflation.)

[Bagpuss]

Buyers work on the "greater fool" theory, that it doesn't matter if they pay a stupid price for something, because an even bigger idiot will be along shortly to pay even more for it.

I invest based on the real income I expect. For real assets (property and shares) I expect them to broadly keep up with inflation and the "real income" is what I expect on top of that. My current expectations are

• for cash deposits and bond funds, the real return is the interest yield less the rate of inflation (currently about 6%-3% = 3%)
• for property, the real retun is the profit on the rent (currently 4.5% for commercial property, don't know for residential as I don't have any, but it's less than that.)
• for shares, the real retun is the reciprocal of the cyclically-adjusted PE ratio. (Currently expect 4.6% annual return on shares over and above inflation.)

You talk too much sense, you need some BTLs before it's too late

[King Cnvt]

http://news.bbc.co.uk/1/hi/business/6730809.stm

UK house prices could rise to the equivalent of ten times average salaries by 2026, a newly-established think-tank has said.


Buy now whilst they're cheap!

[ASB]

aimed squarely at BTL (they have electric heating!)

Electric heating doesn't mean they are squarely aimed at BTL. It just means they are complying with current building regs.

Given the size of the development there will also be social housing on it. Can the housing association deal with those - round my way they can't get HA tenants on subsidised rents in the new build either.

[VectraMan]

There's a big new development just near my house, and they've just put up "assisted living" signs. Yes it's retirement flats.

I don't know what that says about the house market.