Reply to: Pay off mortgage or BTL

[MarillionFan]

I've got everything crossed for you. Seriously WGAS ?

Clever, aspirational and entrepreneurIal contractors. Losers would most likely not be interested

[Evil Hangover]

Second one didn't get accepted. But met with my builder yesterday. Seen a plot for planning for four flats, so having him work through the numbers for the build. Hopefully he'll come into make it worth while going to the auction.

I've got everything crossed for you. Seriously WGAS ?

[MarillionFan]

Even given the £2k fee on that mortgage, it's a cracking deal. 1.23% above their Bank Rate on 60% LTV. I got one with Virgin earlier this year at 2.39% on 70% LTV (only £500 fee though) and I thought that was a good deal! This one property is yielding 20% however so it's all good

I'm guessing Natwest don't deal with contractor types?

Second one didn't get accepted. But met with my builder yesterday. Seen a plot for planning for four flats, so having him work through the numbers for the build. Hopefully he'll come into make it worth while going to the auction.

[ChimpMaster]

Put an offer in on a 3rd property today - 1.73% mortgage and seeing another tomorrow again for borrowing at 1.73%
Return is 6.7% and 7.8% after agency fees.

Fill yeh boots.

Even given the £2k fee on that mortgage, it's a cracking deal. 1.23% above their Bank Rate on 60% LTV. I got one with Virgin earlier this year at 2.39% on 70% LTV (only £500 fee though) and I thought that was a good deal! This one property is yielding 20% however so it's all good

I'm guessing Natwest don't deal with contractor types?

[AtW]

Put an offer in on a 3rd property today - 1.73% mortgage and seeing another tomorrow again for borrowing at 1.73%
Return is 6.7% and 7.8% after agency fees.

Fill yeh boots.

You dirty spekulant, repent!!!

[MarillionFan]

Put an offer in on a 3rd property today - 1.73% mortgage and seeing another tomorrow again for borrowing at 1.73%
Return is 6.7% and 7.8% after agency fees.

Fill yeh boots.

[Lightwave]

The only thing that will cause a big crash is a World War, where most of the prospective buyers are blown to pieces.

We have the 2nd most crowded country in Europe, with a steep rising population from immigration every year, coupled with low interest rates, and QE "funny money" plus foreign "dirty money" looking for a safe haven. We have some of the most protectionist property laws in the world plus low taxes on property.

Safest bet in the World.

150% of that has been priced into the market?

[unixman]

I am LTB rather than BTL.
We will be letting our current house and moving into the one we've just completed on, in a few months.
Not much mortgage.

The highly leveraged BTL empire model is absolutely great, provided you can wind the clock back 15 years and get in at a sensible price.
IMHO.
I think there is medium term risk now, but we don't care if price falls in a 5 year window, we are looking to have a solid asset and a bit of income for 15 years, perhaps more. Also the option to move back to current abode in South East.
So, I've probably jumped in near the peak of the market, but it's mostly ill-gotten gains from buying an expensive(ish) place in the mid 90s.

The BTL model is probably still fine so long as you hold on to the house long enough.

I am in quite a comfortable position finance-wise, no dependents, mortgage paid off long ago and substantial savings. Entering the BTL or LTB market is very tempting, if only as a plan B. However, after so long without a mortgage, the prospect of having one is very unattractive, even scary. Especially as a contractor.

[DimPrawn]

They always go up in the longer term, just keep hold of the house long enough.

The only thing that will cause a big crash is a World War, where most of the prospective buyers are blown to pieces.

We have the 2nd most crowded country in Europe, with a steep rising population from immigration every year, coupled with low interest rates, and QE "funny money" plus foreign "dirty money" looking for a safe haven. We have some of the most protectionist property laws in the world plus low taxes on property.

Safest bet in the World.

[SandyD]

I thought that too, but apparently it's not the case.
At least not heavily mortgaged.
A lot are foreign owned.
A significant number are inherited houses. People inherit their parents house, rent it out, maybe with small finance on it.

Funnily enough foreign property owners are effing exempt or have a very high allowances unlike UK residents ..... isn't it enough that most of the prime locations in central London properties are owned by foreign investors that are keeping them empty !! They are just penalizing UK small property landlords...

[unixman]

Over at housepricecrash dot com they seem secure that house prices are going to slump big style in the near future

They always go up in the longer term, just keep hold of the house long enough.

[DimPrawn]

A significant number are inherited houses. People inherit their parents house, rent it out, maybe with small finance on it.

Or do what my dumb @rse friends did, inherit the house, sell it to a "we buy any house" merchant at low price, and rent it back off the landlord. Then splurge the cash on iCrap and cars and designer clothes.

[Lightwave]

No I do think most of the private lets are mortgaged, ....!!

I thought that too, but apparently it's not the case.
At least not heavily mortgaged.
A lot are foreign owned.
A significant number are inherited houses. People inherit their parents house, rent it out, maybe with small finance on it.

[SandyD]

The trouble is, a high proportion of private lets are not mortgaged and more still are very lightly mortgaged.
So hoping higher interest rates will drive rent up is wishful thinking.
Rents will probably rise with demand in many places of course.

No I do think most of the private lets are mortgaged, also career land lord are mortgaged to the hills, its a business, they invest any surplus cash into new properties all the time.
Many are thinking of leaving the UK to a country that will offer tax free overseas income to stop them from getting bankrupted ... for me once 2020 comes, I may also either leave the UK or give up my day job so I am not pushed to be a higher tax payer... 3rd option is to keep working as a contractor and not touch a penny of the income from my Ltd until I retire, any money I take out means half of it will go to the tax office, but considering I already paid company tax, its more or less 70% of anything I make as a contractor would be gone to the HMRC ... what is the point of working !!

[Lightwave]

Over at housepricecrash dot com they seem secure that house prices are going to slump big style in the near future

There's always a few predicting that.

Personal observation, was looking at £500k+ houses near the West Sussex coast earlier this year.
Got offered a lot of discounts on brand new houses.
The best houses sell quickly, others have lingered on the market.
Take the train along the coast. It's building site after building site. Some of which seem to have slowed progress.
Mortgage rules are tighter this year than last, and last year was tighter than the year before.
(Our mortgage is based on SWMBO's permie salary, so I see how 'civilians' get treated).
Plenty of people want nice houses.
Very few people have £300k+ of actual money.

OTOH, 100 years ago, 90% of people lived in private rental houses they couldn't afford to buy, a model repeated the world over across the years.