Reply to: A first-time buyer's story

[NickFitz]

You thought a 3-bed was cheap at £469k? Surely there is a detachment from good sense here?

WHS

[contractor79]

I live in a flat bought for £200k 3 years ago. I pay £585/month all-in rent i.e. rent + all bills. It's gone on the market for £200k asking price. If I were to buy it, then I'd have to borrow a lot and living here would cost me double what it does now, at least!

[expat]

a three bedroom round the corner from me went up at £469k and sold for £405k, even at £469k I thought it was cheap.

You thought a 3-bed was cheap at £469k? Surely there is a detachment from good sense here?

[tim123]

Yet another reason to not believe what you read in the Mail.

It may possibly be the case that, in the small towns in Surrey and Hampshire where Mail readers live, there is a case for investing in BTL properties, but in all cities there is a glut of rental properties and you'll be very lucky to cover the cost of the mortgage.

Rents are in fact plummeting, and returns after the cost of ownership are taken into account are tending towards the negative.

I'm currently in a small town in hants and stuff seems to be empty between lets for weeks (pity I didn't know this before I grabbed the first place I saw that was half nice).

What's more, they don't see the need to be reducing rents to encourage renters, so perhaps this isn't a solution?

tim

[Cyberman]

Rents are still less than an interest only mortgage on todays house prices in most cases.

Agreed !! The Mail article was arguing that buying BTL from NOW ON could be a good bet, due to the much greater affordability of BTLs due to falling prices.

Obviously those that bought at the peak are in deep doodoo !!!!

[Bagpuss]

I wonder how low all those oversupplied flats in Birmingham , Manchester Leeds etc will go. Most are 50% of the top of the market, some have auctioned as low as a third.

[DimPrawn]

Doomed

http://www.citylofts.co.uk/
http://www.propertyweek.com/story.as...de=3117668&c=1

Residential developer City Lofts has gone into administration.

Ernst & Young was appointed administrator by the company, which is one of Bank of Scotland Corporate’s joint venture partners, on Friday.

Receivership

Last week, Property Week revealed that City Lofts had appointed LPA receivers on six assets across the country.

City Lofts Group Ltd and City Lofts Development Ltd have been placed in administration. Individual holding companies carrying out specific developments in Liverpool and Sheffield have not been placed in administration, and Ernst & Young said it will review the companies in administration with the aim of continuing the current developments under construction.

[Bagpuss]

Rents are still less than an interest only mortgage on todays house prices in most cases.

[Cyberman]

Yet another reason to not believe what you read in the Mail.

It may possibly be the case that, in the small towns in Surrey and Hampshire where Mail readers live, there is a case for investing in BTL properties, but in all cities there is a glut of rental properties and you'll be very lucky to cover the cost of the mortgage.

Rents are in fact plummeting, and returns after the cost of ownership are taken into account are tending towards the negative.

You are wrong, according to Paragon !!!

Data from lender Paragon, on which the Mail article is based shows rents rising throughout the country with the exception of London.

Biggest Increases are: East Anglia 24 %, South West 27 %, North 17 %

[Sockpuppet]

Rents are in fact plummeting, and returns after the cost of ownership are taken into account are tending towards the negative.

Exactly.

The "price" of the place I am renting is around £250k ish.

The rent is £750.

The service charges (that the landlord has to pay) are £1800 a year.

So £9000 a year they have £7200 left after the service charges.

Even at 5% they are going to be paying £12,500 a year in lost interest/mortgage payments.

They they are funing me to live there by at least £5300.


Now in the past that didn't matter due to the capital appreciation. Another flat in here sold for less in 2006 than it did in 2003. Heaven knows what they are worth now.

[ratewhore]

It's all a moot point anyway. As contractors, surely we all pay cash?

[DimPrawn]

Brother in law is a property developer (Property Ladder stylee). He's just converted a house into flats in central Swindon.

No chance of selling at a profit now, so he's renting them out.

Be interesting to see if he can get tenants and if the rent covers the debt he has on buying the property, converting it and doing it up to a high std.

Somehow I doubt it, be interesting to see.

[bobhope]

Daily Mail is about a good a contrarian indicator as you can get, apart from Gordon Brown of course.

[NickFitz]

An interesting article in the Mail on Sunday today arguing that BTLs are becoming a good investment again due to price drops and demand for rented accommodation increasing. Rents are increasing and returns are not much less than from cash in the bank.

If returns, which are now 6.4% on average, can match or even better returns on cash, then the market will start to improve, and thus all this 'crash' nonsense will prove to be overdone.

Yet another reason to not believe what you read in the Mail.

It may possibly be the case that, in the small towns in Surrey and Hampshire where Mail readers live, there is a case for investing in BTL properties, but in all cities there is a glut of rental properties and you'll be very lucky to cover the cost of the mortgage.

Rents are in fact plummeting, and returns after the cost of ownership are taken into account are tending towards the negative.

[Cyberman]

An interesting article in the Mail on Sunday today arguing that BTLs are becoming a good investment again due to price drops and demand for rented accommodation increasing. Rents are increasing and returns are not much less than from cash in the bank.

If returns, which are now 6.4% on average, can match or even better returns on cash, then the market will start to improve, and thus all this 'crash' nonsense will prove to be overdone.