John Doe Posted September 19, 2012 Report Share Posted September 19, 2012 IMO you need to consider the following: 1. Size of the deposit - the lower the LTV the better, but this incurs an opportunity cost 2. Type of mortgage - it must be repayment for your scenario to work. If you're IO you're relying on rising prices. 3. Future rises in mortgage rates 4. Voids 5. Bad tenants, general hassle 6. The unpaid time you will spend managing the property 7. Taxes on income, but more importantly future taxes. I'm pretty sure that R&C will come after landowners eventually, they are currently under taxed and cannot move their assets. 8. Potential nominal falls when QE eventually fails. 9. Real value falls due to inflation 10. Owning an asset you cannot defend when QE eventually fails and the local constabulary are no longer being paid. 11 Changes in tenancy law giving renters more rights, the law is weighted in favour of landlords at the moment. If you already own a BTL and have a 100% repayment mortgage and it's making money I would keep it. If its on IO then I would be looking to sell. Personally I wouldn't invest in BTL for a few years yet. Yep, good points, and I pretty much agree on all of them, but regarding my particular situation...... I'm in the (lucky) position of having a regular stream of full time post-grad students (who get paid quite well, tax free, and are far more sensible/reliant than many undergrads) that are always looking for half decent accommodation (no voids over summer etc) and usually only for 3-4 years. Repayment mortgage has to be in place for this to work, as you say. As such, nominal price falls not really relevant. Future taxes = possible problem, but not likely while most of our mp's have BTL interests No problem in more rights to tenants, I would like to offer a good value, safe, decent property (especially as some of the tenants might well be my PhD students). Possible to now get 25 year fixed rate mortgages (5.25% seen yesterday). Weighing up all the pros and cons, it still looks a decent proposal (maybe better in a few years as you say). Thing is, a part of me has trouble feeling comfortable with the whole BTL thing (in it's current form) and, together with the fact that we'd like to move back down south in the near to mid future, I won't be going for it (at least for the foreseeable future). Perhaps when we're more settled, back down south. Cheers anyway JD Link to comment Share on other sites More sharing options...
BoldAsBrass Posted September 21, 2012 Report Share Posted September 21, 2012 Dimitri Orlov has a sensible idea. He talks about how : + Because of the poor jobs market, children are moving back with their parents, + With a single household: children have little savings, and parents have pensions + The family is being "intermediated" by banks - the parents savings is doing poorly, and children cannot borrow The FAMILY SHOULD DISINTERMEDIATE THE BANKS - and act as their own bank, because the banking system is going to fail them. The parents might consider buying a bigger home, or even a farm or business with their pension money, that would provide a job for the children. This would have a better chance of working out, than "trusting" the banking system Plans are afoot chez BoldAsBrass ... we have a 4 bed detached house with a load of room on the side ... for a double storey extension which will provide about 1000 sq ft of living space. Myself and my good wife will occupy this (2 bed, 1 bath, I open plan living area) and the rest of the house will be divided, in due course, to provide (almost) separate 2 bed units - one each for our sons. We'll build this ourselves over the course of the next few years and not take on any debt. My (2) sons will be able to live mortgage free and with up to 2 kids (sharing a bedroom) at a pinch - and we'll be on hand for baby sitting duties when that time comes. It's not ideal - we had hoped to have a bit more freedom when we retire - and I'm sure the kids would prefer to strike out on their own - but, life is not ideal and, from the kids point of view, being able to start out in life mortgage free is a huge bonus. Plus, we will not be creating actual separate residences, so they won't be able to sell up and buy somewhere bigger, without us all doing it - and the same applies to us of course. As I say, not ideal, but not too bad either. Link to comment Share on other sites More sharing options...
TrueNorth Posted September 21, 2012 Report Share Posted September 21, 2012 That is a very sensible idea Bold as Brass. I commend your ingenuity. Link to comment Share on other sites More sharing options...
John Doe Posted September 21, 2012 Report Share Posted September 21, 2012 Plans are afoot chez BoldAsBrass ... we have a 4 bed detached house with a load of room on the side ... for a double storey extension which will provide about 1000 sq ft of living space. Myself and my good wife will occupy this (2 bed, 1 bath, I open plan living area) and the rest of the house will be divided, in due course, to provide (almost) separate 2 bed units - one each for our sons. We'll build this ourselves over the course of the next few years and not take on any debt. My (2) sons will be able to live mortgage free and with up to 2 kids (sharing a bedroom) at a pinch - and we'll be on hand for baby sitting duties when that time comes. It's not ideal - we had hoped to have a bit more freedom when we retire - and I'm sure the kids would prefer to strike out on their own - but, life is not ideal and, from the kids point of view, being able to start out in life mortgage free is a huge bonus. Plus, we will not be creating actual separate residences, so they won't be able to sell up and buy somewhere bigger, without us all doing it - and the same applies to us of course. As I say, not ideal, but not too bad either. Fair play BaB. How much rent you gonna charge them, you sectret BTL'er Link to comment Share on other sites More sharing options...
stunlee Posted September 21, 2012 Report Share Posted September 21, 2012 Great idea! Did you need to obtain planning permission for that? Link to comment Share on other sites More sharing options...
BradleyWong Posted September 22, 2012 Report Share Posted September 22, 2012 Build cost? Link to comment Share on other sites More sharing options...
John Doe Posted September 22, 2012 Report Share Posted September 22, 2012 Build cost? Good point. Probably between 80k and 140k depending where you live and how much you do yourself. That would = two hefty deposits on two smaller houses for the kids, which, if security is your goal, could be bought with a 25 year fixed rate mortgage (~5.25%), might be a better option. Link to comment Share on other sites More sharing options...
BoldAsBrass Posted September 24, 2012 Report Share Posted September 24, 2012 Fair play BaB. How much rent you gonna charge them, you sectret BTL'er Rent? Errr, rent from children ... sorry, no comprendo. Never had any rent from my children! Not one penny. Have have a few digs ... 'living here scot-free, treat the place like a hotel, hot water sir? yes, no problem, please allow me to pay the electricity bills, house heated 24/7 in the winter, that would be my pleasure sir. Link to comment Share on other sites More sharing options...
BoldAsBrass Posted September 24, 2012 Report Share Posted September 24, 2012 Build cost? Academic. I spent 20 years in the construction industry, son No. 1 works as a builder ... so, labour free. Materials - I don't know, haven't priced it yet. At least 60k I should think. As opposed to each of the lads having to find a quarter of a million for a 2 bed house in the same area. Link to comment Share on other sites More sharing options...
John Doe Posted September 24, 2012 Report Share Posted September 24, 2012 Rent? Errr, rent from children ... sorry, no comprendo. Never had any rent from my children! Not one penny. Have have a few digs ... 'living here scot-free, treat the place like a hotel, hot water sir? yes, no problem, please allow me to pay the electricity bills, house heated 24/7 in the winter, that would be my pleasure sir. You sound like a great dad. Will you adopt me Link to comment Share on other sites More sharing options...
borassic Posted September 24, 2012 Report Share Posted September 24, 2012 CS and BaB as builders what are Unity construction houses like? Guess the words "barge pole" is in the answer. Gaff in Chesham been on since about 2001. Lots of space. £180 large. We are looking to buy but its a zombie market, just like the wider economy. Nothing has changed in our financial world - that pillock Clegg has even suggested that pensions are used for security for children's deposits. This surely reveals the motives at top level to keep the whole charade going a bit longer. Link to comment Share on other sites More sharing options...
BoldAsBrass Posted September 25, 2012 Report Share Posted September 25, 2012 CS and BaB as builders what are Unity construction houses like? Guess the words "barge pole" is in the answer. No comprendo? What do you mean? If you mean that a house built by me should not be touched with a bargepole - I spent 20 years in construction. Everything from dual carriageways, tunneling, high rise offices, hotels and, at the end of my 20 years when I stopped working in London, housing. I have built loads of extensions over the years, fitted my own central heating (not allowed any more - well, not the gas bit), done my own wiring (not allowed any more), dug foundations, laid bricks, cut roofs and so on. I know more about the technical side of construction than any local builder and most site agents you get in commercial house building. If you buy a house from me - or a house that has had an extension built - you can rest assured it was built by a fanatical nutter who made sure everything was right. I even put fixings into plasterboard at the recommended 150mm centres - as opposed to the one a foot you get from a tacker. Link to comment Share on other sites More sharing options...
John Doe Posted September 25, 2012 Report Share Posted September 25, 2012 No comprendo? What do you mean? If you mean that a house built by me should not be touched with a bargepole - I spent 20 years in construction. Everything from dual carriageways, tunneling, high rise offices, hotels and, at the end of my 20 years when I stopped working in London, housing. I have built loads of extensions over the years, fitted my own central heating (not allowed any more - well, not the gas bit), done my own wiring (not allowed any more), dug foundations, laid bricks, cut roofs and so on. I know more about the technical side of construction than any local builder and most site agents you get in commercial house building. If you buy a house from me - or a house that has had an extension built - you can rest assured it was built by a fanatical nutter who made sure everything was right. I even put fixings into plasterboard at the recommended 150mm centres - as opposed to the one a foot you get from a tacker. Think he means these non-tradtional classed concrete panel houses http://www.msol.co.uk/main/h5093.htm Link to comment Share on other sites More sharing options...
drbubb Posted September 25, 2012 Report Share Posted September 25, 2012 NOT IMPRESSED ! The brokers of Luxury London properties talk a good game, But when I look at the charts and prices, I am unimpressed / Key : Red= Rightmove, Greater London, Green= Knight-Frank Prime Central London / THEIR COMMENT (excerpt): Luxury London property price rise in September with a year on year increase of 10% High-end London property prices in September rose at their fastest rate in three months, property firm Knight Frank said today. According to the “Prime Central London Index” compiled by the London-based firm, the price of the capital’s most expensive properties climbed by an average of 0.7% since August. Prices in the upper property band have risen by 10% over the last 12 months, Knight Frank said. Knightsbridge, Hyde Park and Marylebone performed the best with an annual growth of more than 14%. “Average prime property values in central London now stand at a new record high, some 15% above their pre-crisis peak in March 2008,” the report said. Prices seem to have not been hit by the March 40% increase in stamp duty for top bracket properties and expected changes on tax rates for homes owned by non-residents. However, the reforms have hurt sales volumes in the £2 - £5million band, which decreased by 20 per cent in the last three months, in comparison to the same period last year. But the drop has been countered by buoying demand in the under £2million tax threshold where sales rose by 23 per cent in the last three months, compared to 2011. Luxury prices continue to be aided by foreign interest, with foreign nationals - namely Russians, Indians, Italians, US citizens – accounting for just over 40 per cent of London homes, purchased for £1 million or more. /source: http://www.londonlov...er/3486.article LOOK AT THE ACTUAL DATA (& the chart above) Mo.: Rt'mov : GrLondon : KfPCadj : Kf-PrimeC : MoM% : YoY-% 2012 J. : : 224,060 : 438,324 / 432,125 : 5,185.5 : +0.92% : +11.91%: F. : : 233,252 : 449,252 / 435,167 : 5,222.0 : +0.70% : +11.59%: M : : 236,939 : 455,159 / 439,908 : 5,278.9 : +1.09% : +11.31%: A : : 243,737 : 464,944 / 444,850 : 5,338.2 : +1.12% : +11.43%: M : : 243,759 : 469,314 / 448,175 : 5,378.1 : +0.75% : +10.73%: J. : : 246,235 : 477,440 / 451,592 : 5,419.1 : +0.76% : +10.53%: Jl : : 242,097 : 460,304 / 453,683 : 5,444.2 : +0.46% : +10.27%: A : : 236,260 : 454,875 / 456,083 : 5,473.0 : +0.53% : + 9.92% : S : : 234,858 : 456,237 / 459,167 : 5,510.0 : +0.68% : + 9.96% : ================================== mom:- 0.59 % : +0.30 % // +0.68 % : What they do NOT tell you is... xx Link to comment Share on other sites More sharing options...
John Doe Posted September 25, 2012 Report Share Posted September 25, 2012 CS and BaB as builders what are Unity construction houses like? Guess the words "barge pole" is in the answer. Gaff in Chesham been on since about 2001. Lots of space. £180 large. If you get one cheap enough, you can have them converted to traditional build. http://www.mbeconsultants.com/unity.html We did this with another type of "non-taditional" build house (K-Lath construction) by essentially adding an exterior skin of stone/block walls. Link to comment Share on other sites More sharing options...
borassic Posted September 25, 2012 Report Share Posted September 25, 2012 Thanks JD - this one's a semi so could be tricky adding an extra skin. Link to comment Share on other sites More sharing options...
John Doe Posted September 25, 2012 Report Share Posted September 25, 2012 Thanks JD - this one's a semi so could be tricky adding an extra skin. I think the process is different for the Unity constructed places (they take the concrete away and replace with brick), but yes, I guess you'd have to get your neighbour to agree too. I saw a guy buy one in Plymouth really cheap, to let out, on one of those TV Property Pawn shows once. He got about a 15% yield AFAIR, as it was so cheap relative to other properties there. Link to comment Share on other sites More sharing options...
G0ldfinger Posted September 25, 2012 Author Report Share Posted September 25, 2012 Back down to 150oz the average UK home. Still ways to go to the 50oz target. http://gold.approximity.com/gold-silver_watch.html Link to comment Share on other sites More sharing options...
Jake Posted September 26, 2012 Report Share Posted September 26, 2012 2016 or 2020,GF? When is your best guess? Link to comment Share on other sites More sharing options...
drbubb Posted October 2, 2012 Report Share Posted October 2, 2012 London as "a gate community" - Mind the Gate, whoops: The Gap A different story The stagnation of average UK house prices disguises the fact that they have been falling sharply in some parts of the UK, particularly in the North of England and the Midlands. It is a different story in London. The capital can give the impression of being a gated community, with prices at record levels due to the influx of foreign money seeking a safe home away from the troubled eurozone economies of Greece, Spain and Italy. But even in London there is a lot of variability, according to Simon Rubinsohn of the Royal Institution of Chartered Surveyors (Rics). "For the last 12 months places like Kensington and Chelsea and Westminster have seen double-digit increases, while in parts of East London, such as Redbridge and other boroughs out that way, prices have fallen," he says. "So there might be a 15% gap in terms of the change in the last 12 months between the weaker and stronger parts of London," Mr Rubinsohn points out. http://www.bbc.co.uk/news/business-18722069 Link to comment Share on other sites More sharing options...
John Doe Posted October 2, 2012 Report Share Posted October 2, 2012 Nationwide out! Prices fell by 1.4% in the year to the end of September, the Nationwide said. A 0.4% drop compared to August left the average UK home valued at £163,964, the lender said. While house prices had fallen by 0.3% in England, they were down 4% in Scotland, dropped 4.7% in Wales and were 9.3% lower in Northern Ireland. Now, as I live in Scotland, my 5% down for the year prediction might be good after all, well at least on a local level http://www.bbc.co.uk/news/business-19792133 Link to comment Share on other sites More sharing options...
Van Posted October 2, 2012 Report Share Posted October 2, 2012 Prices fell by 1.4% in the year to the end of September, the Nationwide said. A 0.4% drop compared to August left the average UK home valued at £163,964, the lender said. 5 more years of real term glacial real falls. Guaranteed. Intervention is turning what should have been a 5 year bear market into a 10 year one. The last one took 7 years to bottom. Why did we think this one would ever be any quicker? Link to comment Share on other sites More sharing options...
drbubb Posted October 3, 2012 Report Share Posted October 3, 2012 Housebuilding "disaster" - per Evening Standard ====== + Worst month for housebuilders since Dec, 2012 + Worst month for commercial builders since Feb. 2010 + House prices in shock 0.4% September fall, -1.4% down on a year ago + The longest continuous decline (in Orders) for three years ====== http://standardonline.newspaperdirect.com/epaper/viewer.aspx Link to comment Share on other sites More sharing options...
John Doe Posted October 3, 2012 Report Share Posted October 3, 2012 Housebuilding "disaster" - per Evening Standard ====== + Worst month for housebuilders since Dec, 2012 + Worst month for commercial builders since Feb. 2010 + House prices in shock 0.4% September fall, -1.4% down on a year ago + The longest continuous decline (in Orders) for three years ====== http://standardonlin...per/viewer.aspx So don't expect a massive rise in the number of properties being built to support our massively increasing population any time soon Link to comment Share on other sites More sharing options...
drbubb Posted October 3, 2012 Report Share Posted October 3, 2012 So don't expect a massive rise in the number of properties being built to support our massively increasing population any time soon Two opposing trends: + Wealthy foreigners buying properties they live in part-time, if at all (Visit Mayfair sometime, and you will see what I mean) + People sharing more, or moving in with parents, to save money Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now