Sunday, May 27, 2007
This won't surprise many of us
Financial Times: Rate rise puts brakes on investment property sales
Anybody who has done the calculation on BTL recently will know that its very hard to justify renting the average £250,000 1 bed flat in London. £375/week required on a 6% mortgage with 30% slack for voids and maintenance, given that there are plenty of rental flats for 200 to 250/week. Add the risk of interest rates and the investment is fanciful. There are some bargains still to be had, but tend to be limited to local authority. Eventually these will also be unviable if house prices keep rising.
Posted by pr @ 12:09 AM (183 views) Add Comment
1 Comment
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1. tyrellcorporation said...
Knight Frank believes rents could rise as much as 12-15 per cent this year, although not all landlords will be able to pass on these rises immediately.
Nigel Terrington, chief executive of Paragon Mortgages, argues that increasing interest rates can drive up demand for rental accommodation as tenants may be forced to delay purchasing a property.
“Landlords often have the ability to cope with rate rises better than owner-occupiers as they can pass on the rises to tenants,” he says. “Tenant demand is currently high, and rental levels are going up quite strongly.”
CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP! CRAP!
This is all a load of bullsh*t, rents are plummeting in Exeter. A 4 bed house for a list price of £1200 a month can easily be negotiated down to £950-£1000 a month. Over supply is finishing these parasites off nicely.