Sunday, Nov 11, 2007
Rip Btl
Firstrung: Firstrung, first time buyers, the week in focus
The past week saw the buy to let industry battered with more negative comment. When an organisation, with the perceived authortiy of RICS, finally calls time on this harmful practice then the so called 'investors' really need to; buy the coffee, get it home and open the bag. However, for most of them it's simply too late...
Posted by converted lurker @ 09:23 AM (372 views) Add Comment
2 Comments
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1. uncle chris said...
Let's face it - recent BTL's are stuffed whatever they do. Why would any potential buyer, assuming they could get a mortgage, pay top whack for a modern flat when they just need to wait a few months for similar properties to be repossessed, and then sold at auction for 30-40% less than they were bought for. It is quite clear that if a tenanted property is being sold, then the sums don't add up - so to have any chance of selling it, BTL's need to reduce prices drastically and take a loss.
It's alright talking about being in it for the long run, but when you are subsidising your tenants to the tune of £200 per month (I know someone local that is losing £250 per month), and have maintenance costs averaging £100 per month (conservative figure). Then even 10 years down the line, the property would have to be worth £47,000 (assuming 5 % interest) more than it is now to make it worthwhile. That said, I don't believe we will be back to where we are in 10 years.
The least painful option is to knock 20% off now and try to unload it. Make it look cheap compared to the majority, who will be left chasing down the market.
2. Sold My Soul To The Never Never Never said...
UC - I think that your comments have summed up this article perfectly!