Tuesday, Aug 19, 2008
Don't sell - become a landlord!
Property Week: Rental market booms as July housing sales diminish
This article says more and more people re choosing not to try and sell their house at the moment - achoosing instead to rent it out until prices recover. Interesting what it says about the demand for homes.
Posted by peter whelp @ 09:34 AM (438 views) Add Comment
7 Comments
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1. shipbuilder said...
While looking at the rental market here in NI recently, the majority of rentals also seemed to be up for sale. I don't know how long this has been going on for, but to me it flags a mixture of good and pretty worrying developments -
- Greater choice of rental properties at a lower price, however -
- Increasing number of amateur landlords with no idea of the rental 'business'. The tone I noticed was that these new amateur landlords had no desire to be involved in the rental process at all, yet still saw the house as their home and tenants as 'guests'. Some rude awakenings due, I think.
- An increasing number of people who have bought their next house outright with undoubtedly a huge mortgage, deluded that they will eventually get what they want for their old house, if only they wait long enough. This is storing up (even more) huge debt problems for the future.
2. Whostolemyendowment said...
For Sale & To Let at the same time?:
This is something that has always troubled me for a sensible answer.
Your house is up for sale as you are in a chain to buy another house - but then where do you live?
Your house is up for sale because you need or wish to move and are prepared to rent elsewhere (perhaps while looking to buy a house there in the future)
Your house is up for sale as you wish to downsize, and will rent somewhere in the meantime.
Or - you are so strapped your are going to rent out your house and live in the shed in the garden or with relatives or friends.
If you are already a BTL trying to sell your property - then it is hopefully already rented out.
If you are trying to sell your house then a sitting tenant could be a problem, or you could always get back to 'Victorian values' and sell the roof from over your tenant's heads and put them on the street. If you are the tenant of a house with a for sale sign in the front garden - you know your time could be up at any moment (though in the present housing climate your tenancy could be long term).
3. doomwatch said...
There does tend to be a common perception out there, STILL, that somehow things will get back on track in a year or so. I think this must be
a sort of post denial "yes, now I'll admit it's falling, but it'll be alright soon". Again, the majority of VI media have created this perception.
But then again, what right minded journo (who's fee are paid by advertising) is actually going to come out and say. "No, you'll never again get the mortgages
that have been offered at increasing levels of stupididy over the last 10 years, and the house you thought was worth X in Aug 2007 will
be worth X/2 in Aug 2010. In fact, to you've just been conned by the biggest Ponzi scheme in history".
4. Bananasplit said...
you rent out your house and the income needs to cover the mortgage, buildings insurance, letting agent costs, boiler servicing costs, safety inspection costs etc. the remaining amount if not taxed would be used to rent another property ! I do not understand how this is financially viable and I expect that the full truth has not been revealed yet ! The property market will spiral downwards and as it does large mortgage holders will eventually join the whirlpool and sink. Eventually house prices wil fall and mortgages will be less than renting costs forcing rents lower causing more problems for BTL.
5. Eternal Sceptic said...
many moons ago the mantra was 10% down and a multiple of 3.5 times income for a mortgage.
If this sanity returns it is quite easy to see what percentage drop is over the horizon.
An unhappy time for many , I think.
6. shipbuilder said...
I'm pretty sure that these people have (in NI anyway) already bought their next house. I know some banks were pushing a deal whereby they give you the full mortgage for the new house and a BTL mortgage for your old house, on the understanding that sale of the old house would go toward both in the future.
7. shipbuilder said...
If i'm right and people are buying before selling, then we are surely looking at the formation of a second sub-prime disaster.