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KieranE

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Posts posted by KieranE

  1. 2 hours ago, spyguy said:

    Wooh there IO mortgages are basically banned for 95%+ of the population.

    Where as IO are still available  for LL the S24 rules means leverage is whacked.

    Also LL mortgage mind have a teaser fix but the SVR is high - 5%.

    And, again, S24 kills LL leverage.

     

    Mortgage has to repayment.

    Not if the mortgage takes over ~30% of your take home @ the stress test -  6%/year

    Say, split 60k in 2 - 30k each, so ~50k take home.

    With no other debt  - car, , cards etc - you can devote ~15k to mortgage payments.

    Inrelality most banks tend to remoe 5k-10k just for cost of 'life'

     

     

     

     

    Yeah true maybe I shouldn't trust everything these mortgage comparison sites say! Perhaps when you apply it's not so generous.

    My example was meant to be two people both earning 60k each - so 120k joint. Think that's about 80k take home. Possibly that is pretty rare though apparently 10% of workers earn that much!

    Anyway I just thought it might be interesting to others since it surprised me how apparently "cheap" it could be per month to buy a 800k house provided you have a 25% deposit.

    Especially the BTL one - even a 5 year fix I/O is £950 per month with Barclays to borrow 600k - I'd expect one could rent out a £800k house for £2000 per month, so even after a rather OTT 50% for S24 tax / voids / maintenance it's still ahead. Agree that might not be pretty in five years time mind you ...

  2. So wait ... with two incomes of £60k each and a (admittedly large) £200k deposit it's perfectly possible to borrow £600k to buy an £800k house.

    And you'd pay a little under £2000 per month initially if you borrow over 30 years and fix for 2 years at 1.0%.

    Though some lenders (e.g. YBS - https://www.ybs.co.uk/mortgages/interest-only-new-customers/index.html ) will accept part-repayment + part-I/O with sale of house as repayment strategy if you have a high enough income (£100k joint) and large enough deposit (25%) and keep the I/O bit to 50% of the loan. 

    With that it's possible ( according to https://www.landc.co.uk/partners/thisismoney/?icid=thisismoney ) to get the initial monthly payment down to under £1200 per month for an 800k house (200k deposit, 300k repayment, 300k I/O).

    But - according to https://www.comparethemarket.com/mortgages/buy-to-let/ - if you're a landlord with a 200K deposit, you can take out a purely interest-only mortgage at just over 1.5% fixed for two years - which is only about £800 per month! For an 800k house.

    Insane - I'm beginning to see why ordinary houses start at £800k round these parts in London ...

  3. Thought this was mildly interesting ... not sure how massive the drop is but could be fairly sizable.

    It's apparently a "contract reassignment" which seems to mean someone wants out of a off-plan purchase!

    £585k for 914 sq.ft. on 3rd floor of "Jasmine house"

    https://www.rightmove.co.uk/properties/110421506#/ (map location is slightly off - it should be next to the new stadium by kew bridge)

    Compare to glossy developer sales website where two similar but smaller ones are £655k and £670k (unsold) ...

    https://ecoworldlondon.com/places-to-live/current/verdo-kew-bridge
     

  4. 6 hours ago, kzb said:

    I'm sure there is truth in this, but proving it is a problem.  The housing benefit bill for London is a lot, but is it really enough to support the prices we see?

    Yes, in some cases.

    Local Housing Allowance Rate for a two-bed property in this part of Inner West London is £339.45 per week:

    https://www.hounslow.gov.uk/info/20072/housing_benefit/1255/local_housing_allowance/2

    That's £17,650 per year.

    Landlords seem to be willing to accept gross yields as low as 4% at the moment, presumably because interest rates on mortgages are 2-3%. And because savings interest is so low.

    4% of £400,000 is £16,000 per year.

    So housing benefit does support a price of up to £400,000 for a 2-bed flat.

    Which, funnily enough, is what a fairly basic two-bed property in Inner West London will cost.

    Not sure the numbers add up so well for a 4-bedroom house mind you.

     

     

  5. 15 minutes ago, morty said:

    32 years left and 11k service charge, is this some sort of error?

    Maybe for some of these short leases you can just think of it like rent? £1,000,000 / 32 + £11,000 = £42K per year, £4K per month.

    Given the location, then pre-Covid the maths might have worked ok? Either as a AirBnB (if you don't care about 90 day rule), or for some, err, "escorts", or for some spoilt overseas students.

    I mean, you are next to hyde park, royal albert hall, imperial college, a whole bunch of embassies ...

  6. 27 minutes ago, KieranE said:

    Unfortunately - like it or not - family homes with gardens where I am in outer west london (brentford/northfields/isleworth) do seem to be selling quickly and often at prices higher than 2 years ago.

    Recent examples of the sort of properties I mean:

    https://www.rightmove.co.uk/properties/83733064#/
    https://www.rightmove.co.uk/properties/102208586#/
    https://www.rightmove.co.uk/properties/74550774#/

    Possibly some will fall through but plenty do seem to be showing up on the land registry at houseprices.io.

    True though that flats are not shifting!
     

    OK, I checked. Of the 60 houses sold in Brentford in Sep-Dec 2020, 59 of them are green (real terms increase) on https://houseprices.io/?q=brentford .

  7. Unfortunately - like it or not - family homes with gardens where I am in outer west london (brentford/northfields/isleworth) do seem to be selling quickly and often at prices higher than 2 years ago.

    Recent examples of the sort of properties I mean:

    https://www.rightmove.co.uk/properties/83733064#/
    https://www.rightmove.co.uk/properties/102208586#/
    https://www.rightmove.co.uk/properties/74550774#/

    Possibly some will fall through but plenty do seem to be showing up on the land registry at houseprices.io.

    True though that flats are not shifting!
     

  8. 10 hours ago, btl_hater said:

    If anyone can explain how non U.K.-resident foreign nationals being allowed to buy up our housing is a good thing for the average U.K. worker then I’m all ears.

    OK, here goes a devil's advocate argument - if you look at it as:

     - OtherCountry sells Britain useful things like laptops, trainers, fridges, toothpaste, phones, lightbulbs, engines, and so on.
     - Britain gives OtherCountry British Pounds in return.
     - OtherCountry uses those British Pounds to buy ugly "luxury" cladding-covered apartments in Battersea or Deansgate and very expensive degree courses.

    Then maybe it's not so bad for the U.K. worker? Cheap useful stuff in return for some ugly apartments no-one really wants anyway.

    It does of course depend on the extent to which the inflation "leaks out" from ugly apartments and overseas student tuition to normal housing and U.K student tuition ...

  9. 3 hours ago, spyguy said:

    Since S24, ~30-50% of rental income now goes in tax.

     

    Most IO BTL were skimming ~100/m on  ~1000 of rent.

    A fair few were actually subbing the mortgage.

    Having to pay 300/m tax on rental income sinks them.

    Vast majority of rentals have been bought with mortgage, mainly IO.

     

     

     

     

    Oh good point - forgot about that. It's already down to just 20% of interest claimable this year I think.

    In that case I just can't understand why mortgaged landlords are not selling up left, right, and centre? Or is that about to happen!

  10. 9 minutes ago, TheCountOfNowhere said:

    Man, you estate agents need to get a calculator and you had to go all the way back to 2004 to prove you point, pretty much the last time anyone not on the pyramid could afford to buy a house.

     

    Hang on, I was replying to a comment by Pop321 where he said:

    Quote

     

    But my son has his mind made up and even if there is a crash it’s a super spot...it’s the best road in the whole of his search area and we aren’t a million miles away from 2005 prices. That 2005 target is almost impossible at the moment in London ..

     

    I was merely agreeing that a house "not a million miles off 2005 prices" might actually not be a bad price.

    I think we are in agreement that house prices became somewhat divorced from normal economic reality sometime shortly after 2004/2005!

    I'm not sure yet about the trend 2016 - 2021 round here, there's too few sales to say. Hopefully you are right.

  11. 2 minutes ago, TheCountOfNowhere said:

    Weird, London's going though the floor and no one's buying

    London house prices have been declining since circa 2016.

    Perhaps you're confusing asking prices with selling prices.

     

     

    I would like to be wrong, but I was replying to a post that said 2005, not 2016.

    I am looking on houseprices.io, so I am talking about selling prices.

    Examples of houses (not flats) that sold in 2020 and also sold in 2004-2006 from first couple of pages on houseprices.io for TW7:

    image.png.7c4d08393bf0f04c83743a20d0b90694.png

    image.png.fa1026f6b90707f7356e319fbddb09bc.png

    image.png.b5a57ee1862d4bf7d020d6e9e241eddf.png

    image.png.65804f623304ebf3581476cb5c066743.png

    Sadly it's hard to argue with the numbers - I agree that prices have softened in some areas in the last 5 years or so, but it seems silly to pretend that they are not way up on 2005 ...

  12. 3 hours ago, Pop321 said:

    But my son has his mind made up and even if there is a crash it’s a super spot...it’s the best road in the whole of his search area and we aren’t a million miles away from 2005 prices. That 2005 target is almost impossible at the moment in London and perhaps shows everyone must factor in bull and bears on these threads depending on the different geographic areas we all live in

    Quite - houses selling for more like 2.5 x 2005 prices round here in zone 4 west london!

  13. On 7/15/2020 at 5:27 PM, PropertyMania said:

    Nope, rents have barely risen in real terms over the last decade. House prices meanwhile...

    That's been my experience where I am over the last 10 years (2010 -> 2020).

    Rent: 1400 pcm -> 1700 pcm (up 20%)

    Buy: 320K -> 550K (up 70%)

    According to the bank of england overall inflation from 2010 to 2020 has been about 30% so rent has gone down in real terms!

    I guess the missing factor here is interest rates of course.

    2010 BTL mortgage rates were about 4%
    2020 BTL mortgage rates were about 2.5%
    .. so the rental income can support a much higher mortgage now

    2010 savings rates were about 2%
    2020 savings rates were about 0.6%
    ... so the rental income on a much higher purchase price is attractive compared to savings now

    For prices to fall you need rents to fall AND interest rates to stop falling ...

  14. 3 hours ago, rantnrave said:

    Rental demand falls as EU tenant numbers hits four-year low

    https://propertyindustryeye.com/rental-demand-falls-as-eu-tenant-numbers-hits-four-year-low/

    ...During 2017, the average proportion of London tenants who were originally from EU countries stood at 29%. In 2018, this dropped to 24% and then further to 22.5% in 2019. In 2020, EU tenants accounted for just 22% of London residents – a total decrease of 7%...

    "decrease of 7%" makes it sound less dramatic than it is - looking at it another way, it's gone from 29 to 22 - that's a 25% drop!
     

  15. 1 hour ago, Voice of Doom said:

    Anyone know how these figures are calculated? As someone who sees only reductions in London - and many huge ones - I wonder if it is simply a function of the types of places being sold to particular types of people.

    For a long while, the banks were only lending to buyers who had a big deposit, ergo probably relatively well-off. These people wanted to buy a place with a garden, ergo more expensive type of house.

    If there are fewer flat sales to include in the figures then the average price of properties sold would, absent any other factors, go up. Do the ONS figures take account of this or is it a raw average? if the latter, it's not really surprising. The devil really is in the detail here.

    As I understand it, the ONS figures do try to take the type of property into account, to avoid - as you say - a temporary change in the mix of sales skewing the numbers. I think the Rightmove index on the other hand probably is affected by that skewing?

    But perhaps the way ONS do that is not robust as the old land registry figures that looked at repeat sales of (literally) the same property?

    Citation - might be a bit out-of-date, but this article from when the new ONS index came out explains a bit about the "hedonic regression model" used:

    https://www.ons.gov.uk/economy/inflationandpriceindices/articles/introducingthesingleofficialhousepriceindex/2016-03-30#methodological-improvements

     

     

  16. 5 hours ago, Roman Roady said:

    34.5% off of a 2 bed apartment in W6 (Hammersmith/Fulham).

    The frequency of drops would indicate another drop soon. Note the spike of optimism in Aug 2020...this and some of the stock type photos leads me to think this might be a developer selling.

    https://www.rightmove.co.uk/properties/79697071#/

    Price Change History
    22/10/2020 Price Changed: £1,100,000 £850,000
    08/08/2020 Price Changed: £950,000 £1,100,000
    17/06/2020 Price Changed: £1,150,000 £950,000
    10/06/2020 Price Changed: £1,300,000 £1,150,000
    23/05/2020 Initial entry found.

    A similar one in the same street ... that's been there for well over 2 years now!

    https://www.rightmove.co.uk/properties/56546640#/

    image.png.cc18130ca38b1d42fb39c738d856804e.png

    No music speakers or bio ethanol fireplace .. but you do get ... wait for it ... your ...

    image.png.337a3d6c063923884e328605d56d77b9.png

     

  17. I'm a little unsure here though ...

    If we want more affordable house prices ...

    Then agree we don't want government to artificially prop them up and "keep the plates spinning" forever.

    But .. thinking longer-term ...

    Is stamp duty itself something of an artificial prop?

    It does arguably discourage down-sizing and discourage moving to another area for work - would there be more supply and hence lower prices without it?

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