Reply to: Moving and BTL at the same time

[milanbenes]

Ardesco I agree,

it's the same for the negative equity in shares, in 2002 they all dived, lots of people cashed out at a loss, most of those who held have now seen the prices rise above what they were before, sweeping generalisation I know but if you can afford to hold in the long term you will be ok

the worst thing will be if a crash leads to a slowing in the economy and job losses then those who have over extended themselves and finding work drying up might not be able to service their commitments

there's a very simply rule which helps avoid such scenarios, it goes something like, if you don't have the money it means you can't afford it !

Milan.

[Ardesco]

Not always true. Going back to the mid 90s, the banks got nervous about negative equity and started pressing for increased repayments to bring it down.

Several folks I knew did this by drawing extra funds from their businesses.

Double whammy, as the tax man saw that as income and wanted the tax on it.

The point that I am trying to make is that if you can afford to keep up the repayments in the long run you will be OK (Long run as in 20+ years). Also if you are going to do a BTL I would make sure you have as long a term fixed price as you can get, this is why i went for a 5 year fixed rate. I know in the next 4 and a bit years my repayments are not going to change, so hopefully we will see crash next year and it will recover a bit in 4 and i'll be able to get another decent fixed rate for the next 5

[milanbenes]

excuse me for asking a daft question, how long ago was last week's program made ?

Milan.

[andy]

She's currently saying 'sell now sell now sell now' !

On last wek's episode she is still suggesting to buy since there are quite a few 'bargains'

[Sysman]

Negative equity is only a problem if you need to sell up.

Not always true. Going back to the mid 90s, the banks got nervous about negative equity and started pressing for increased repayments to bring it down.

Several folks I knew did this by drawing extra funds from their businesses.

Double whammy, as the tax man saw that as income and wanted the tax on it.

[rootsnall]

I haven't watched this week's ep yet....

It was an interview in the Evening Standard a few weeks back. I think she has STRed ( Sell To Rent ) and is predicting a sizeable correction if the reports are correct.

[rootsnall]

I blame Sarah Beeny.

She has hypnotic breasts... "buy now buy now buy now"...

She's currently saying 'sell now sell now sell now' !

[milanbenes]

that's because Bob, things are different these days, it's like the .Com times you don't need to worry about silly little things like yields and ROI, that's old world, these days, house prices simply rise astronomically and that my friend is all you need to know

people like you Bob are sooooooooooooo not getting the point

all aboard the btl gravy train

btl and .Net what a combination !

Milan.


p.s. do your own research house prices can rise as well as fall and your home may be at risk if you cannot keep up payments on it

[bobhope]

I find it staggering the number of people, even those going into BTL that don't understand yields and ROI.

[Bagpuss]

Surely the stupid people are the ones that are spendnig the money that is thiers.

Unfortunately the debt is theirs!

[Bagpuss]

Bagpuss - have you 'dipped' in the auction market before?

I've looked into it over the last couple of years I've even done a couple of phone bids, but as you said things are going for far over estimate, so much so I can't see the value. I worked out the max spend from a rental perspective and stuck to that, bearing in mind the estimates take into yield.

I can only conclude people aren't doing the maths or thinking about what they are doing. It's probably all these daytime housing shows that are to blame. Even the properties with regulated tenancies were going for far too much (and they are a massive gamble).

Still as rates rise we could be about to see some possibilities once more.

[Sockpuppet]

There is a lot of stupid people out there madly spending money which isn't theres.

Surely the stupid people are the ones that are spendnig the money that is thiers.

[Clippy]

Bagpuss - have you 'dipped' in the auction market before?

[Bagpuss]

Allsop had their first 2 day auction in several years a few months ago. Before that there weren't enough properties

[Clippy]

I wonder if everyone "investing for the long term" will be able to hold their nerve when prices start to tank? Or will some people sell out, triggering an even bigger sell off?

I suspect the newbie Rigsbys and those with big BTL mortgages will bail out early on and leave those with a bit more experience standing.

I read a few months ago repossessions are on the up (nowhere near 90's levels, admittedly) but, surprise surprise, this isn't being widely reported.

Also the Halifax has recreated it's auction arm after closing their last one down many years ago!