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observingthedebate

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About observingthedebate

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  1. I beg you pardon? Not quite sure what your point is and why the wink? As if I am making things up....
  2. Wow good memory! Yes only 3.That one was sold to pay down debt in 2010 back to pay down mortgages elsewhere. Did not mention as not part of the ling term picture.
  3. Caveat: we (me and wife) live in London so prices and incomes are relative to the market here. We are luckily both in good jobs (we used to receive bonuses - no we are not bankers!!!- which we have always used to pay down debt quickly). Plus I think we have been lucky to have spotted a good area where values have (nominally) gone up considerably. So our numbers are maybe going to look unusual and we believe the market around us is highly inflated, we have just tried to make that work for us!! Our plan as it played out: We started in Jan 2003 buying a small maisonette for £210k. 85% mortgage which we worked hard to pay down quickly. We still own the place (next door has sold for £400k last year) which we have rented since. We owe just over £50k for this mortgage. In 2006 (October) we upgraded to a small 3 beds town house in the same area. Price paid was £420k. We paid a £70k deposit saved up and used a lot of resources to pay the mortgage as fast as we could. Woolwich in 2008 (literally days before the BoE started reducing IR to 0.5%!!!) was kind enough to offer me a 0.69% above base for the lifetime of the loan. We kept repayments to the originally quoted amount so have been killing the capital over time. Currently we owe £220k to the bank for the house and are paying capital down to the rate of about £1k a month. Thanks Barclays! We kept this place also and rent it as from this Jan. Next door house just sold for £640k. In 2012 we bought again (our family also had increased by then) we bought another place. Big one, this is for life, for £775k (5 beds Victorian) in same sort of area. We had again saved every penny we could and used every resource to raise a £200k deposit and got a 75% on a 2 year fixed 2.34%. So we now sit on a portfolio with some money in it, we are also almost (nominally) mortgage free. We receive an income from rentals that is the same as our mortgage outgoings. So effectively what we have to meet is the cost of keeping the two rentals going (maintenance, fees, income tax etc!) and this is a commitment about the same as before we bought our last place in 2012. Now we have one big decision, as we both believe that a HPC is coming. Out LTV for the overall portfolio is about 40%. We could sell the two rentals and live mortgage free. We however would like to hold on to the portfolio to pass it onto our kids when they grow up. On the one side we are exposed to IR escalating and if that couples with a crash then the maths would not work anymore, we would be screwed. On the other, we do get a really good income from rentals and are starting to save again to pay down debt aggressively. I am really not sure what is the right call…
  4. Ah ok. Thanks for that and congrats for doing so well with it. A very high risk investment though, not for everyone.
  5. I think you are perfectly describing the attitude of the many Accidental Landlords that have sprung up these last few years. Although, truth to be said, if they can keep it going until mortgage is paid up could end up making some money out of it. I agree biggest risk is an IR escalation, which is coming in the not too distant future.
  6. That's a very impressive return (assuming you do rent in this country?). Would love to have a glimpse of what you are doing...
  7. Lol. Quite! Round where I live (sw London) so many beautiful family victorian homes have been converted into 2 or 3 one or two beds flat, some actually nice but a crime from an architectural and heritage stand point...
  8. I am no expert but certainly housing average size is a function of density of population and available land. If you cannot build horizontally you build vertically.
  9. They only have to convert the big house into two flats. Live in one and sell/rent the other. Job done!
  10. I was thinking that percentage drops are not really indicative as it is very difficult to work out what price to take as a baseline? So really is to what year do you all think prices will revert to? My guess (based on nothing much more than gut feeling) is price levels at periods of mid 2001. What is the general view?
  11. I do get it and was being provocative a little. I agree that the article is not very balanced. However, I read this pages (the forum I mean) a bit and I find that balance is not always present in the comments posted. This is not a criticism to anyone just an observation that being excessively unilateral in opinions never really helps. Not sure I am making much sense. I mean, the IMF report yesterday was totally rubbushed also on these pages. That is not right either, would you agree?
  12. It's just a different opinion, what's wrong with that?
  13. maybe I had to add a 4th reason to the lack of debate (friendliness of average response to your question). apologies if I didn't express myself correctly I am not an economist. Howver having stacks of cash with high inflation is not a good idea is it? Isn't that when the nominal value of your debt reduces? said that, I do think I will go out more and stop depressing myself with all this doom and gloom. Thanks for the advice.
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