Report Clouds Over The Housing Market Create A Perfect Storm For First-Time Buyers in House prices and the economy Posted October 23, 2010 · Edited October 23, 2010 by Let's get it right Rents are nowhere near that here. 3 bed semi, asking price about £190k rental £750. I'll leave you to work out the yield on that! Say you've got £40k cash. You're getting 2% on it in the bank - £800 a year. You buy a 3 bed semi with a 150k mortgage from HSBC that you pay 3% on. Mortgage interest is £4500. Rent is 9k. I'll leave you to work out how many people think it's a good idea. Tip: the answer is ... enough to sustain house prices. Even if you pay cash - that's 4.7% yield - a lot more than most bank accounts pay. And, of course, rightly or wrongly, people think that in the medium term the house price will go up. Historically, that would be true. And I know you'll all go on about voids and maintenance - well we all have to maintain our houses - no-one said BTL was trouble free - and, more worryingly, I saw some figures somewhere this week about the average size of a portfolio and the average LTV of the portfolio. It was (I think) 9 (might have been 12) properties with an average value of about £2m but with a LTV of just 37%. Seems BTL scumlords are not all borrowed up to the hilt. Which is why a mass withdrawal from the rental market is the only thing that will cause a crash. Because that would cause SOME landlords to sell at any price - just to get out. Other than that, I can't see where the crash is coming from anymore. I used to have this blind faith that the market was overvalued and must correct. Well it hasn't happened in the last 7 years which is at least how long the market has been overvalued around here.