Boomed - House prices to return to (2007) peak

[BarbarianAtTheDoor]

Because they're stupid, that's why anyone does anything

Rental prices on the long run must follow mortgage costs. If I'm renting a flat that would cost 200K, I'm not going to pay the mortgage equivalent of 360K, at least no longer than half a year or so.

Won't seem like such a great idea when you have to cough up 30-40% of the mortgage for a flat you're not even living in.

[Francko]

Rental prices on the long run must follow mortgage costs. If I'm renting a flat that would cost 200K, I'm not going to pay the mortgage equivalent of 360K, at least no longer than half a year or so.

Won't seem like such a great idea when you have to cough up 30-40% of the mortgage for a flat you're not even living in.

Shhhhh.. now some people are trying to convince themselves that rental prices can never go down.

[Stan.goodvibes]

This Time It's Different ™

Hey cool, how do you get the 'tm' logo like that??

[Stan.goodvibes]

2023's not that far away. It'll be Xmas 2022 before you know it...

[Bob Dalek]

Bloody stupid academics. Thats bollox and you know it
Looking at the London market, rental yield is now approaching 6-7% in some areas - this will pull the BTL punters in, thus providing a floor to the house price falls. Don't forget there's still a lot of money out there looking for a home that's not a bank.

Like those twots from the Royal Society whose Global Warming theories you love so well?

[BigTime]

only another 15% to go according to the torygraph
http://www.telegraph.co.uk/finance/e...ght-Frank.html

[expat]

Rental prices on the long run must follow mortgage costs. If I'm renting a flat that would cost 200K, I'm not going to pay the mortgage equivalent of 360K, at least no longer than half a year or so.

Won't seem like such a great idea when you have to cough up 30-40% of the mortgage for a flat you're not even living in.

You've forgotten the effect of old-fashioned tight lending criteria: there will be a lot of people who would like to buy, because a mortgage would cost them less than their current rent - but nobody will lend that much to them because "they couldn't afford to repay the mortgage".

[sasguru]

You've forgotten the effect of old-fashioned tight lending criteria: there will be a lot of people who would like to buy, because a mortgage would cost them less than their current rent - but nobody will lend that much to them because "they couldn't afford to repay the mortgage".

Indeed. The effect of the credit crunch is to create a whole new class of renters - otherwise credit-worthy young couples/singles who would have stretched themselves to buy, but cannot now get mortgages.
That will lead to greater demand for rental property at the "good flat" end of the market.
Still not worth investing in the rental market if you have to get a BTL mortgage, but if are a cash buyer, this is beginning to look like a better and safer return on your money over 10-15 years than a bank, stock market etc etc.

[rootsnall]

Indeed. The effect of the credit crunch is to create a whole new class of renters - otherwise credit-worthy young couples/singles who would have stretched themselves to buy, but cannot now get mortgages.
That will lead to greater demand for rental property at the "good flat" end of the market.
Still not worth investing in the rental market if you have to get a BTL mortgage, but if are a cash buyer, this is beginning to look like a better and safer return on your money over 10-15 years than a bank, stock market etc etc.

10-15 years it probably is a good bet but why not put your cash on 6% and wait a couple of years and pay substantially less for the property ?

Are we talking London ? I reckon rents will stay level or go down while the recession is on and then start to climb the other side of the doom. Another reason to wait a few years