FunkyGibbon

I completely agree that yield is part of the equation but you do need to consider interest rates as well. In my opinion, the correct price is one where it's cheaper long term to buy with a mortgage rather than rent. At the moment it's cheaper to rent than buy so prices are too high. Either rates need to drop by 2-3% or prices need to fall 20-30% to make house buying a viable proposition, either for the landlord or the owner-occupier.

Thanks for your help and advice. I value your contributions - particularly the Marmite starfish.

Your advice on this matter would be appreciated. Through idle curiosity, I chanced upon yourpropertyclub.com who offer assistance and advice on building a buy-to-let porfolio of 1-10 properties. Now they have got hold of my email address and telephone numbers and keep ringing and emailing me with property 'opportunities'. The problem is, none of these so called opportunities appear to be particularly attractive. When I put the numbers into my spreadsheet, they all seem to generate vast amounts of commissions for the property club, solicitors and mortgage brokers and have negative cashflows (i.e. losing money) from day one. I am assured that the capital growth of the properties will outweigh the cashflow losses but I just can't seem to make the numbers add up. I have told them repeatedly that it won't be worth investing in property until prices fall 20-30% and interest rates are 1-2% lower than they are today but they still keep ringing me. Having made money from BTL property in the past, I can't help but be fascinated with the idea of pulling off the same trick again. I can't help thinking that there may be an element of common sense about the reinvesting in property again at some point. This is especially due to the pathetic performance of some of my other investments - particularly pension investments. Does anyone else have any experience of property clubs and maybe this property club in particular? Thanks in advance.

YOY Negative at last!

I don't believe it! * £815,000 * 1 bedroom and NO BATH!!! £815,000 1 Bed aprtment in Chelsea with NO BATH

MY SOLUTION: 1) Contact your lender and get permission to rent your house in negative equity (NE); 2) rent your existing house through a reputable letting agent allowing the rent to cover the mortage repayments; 3) move into rented accomodation of your choice and wait for the housing market to crash; 4) when the housing market has bottomed out, obtain a mortage decision in principle on a buy to let mortage on your existing NE house; 5) find a new house of your choice - ideally a distressed sale (auction) needing work at a deeply discounted price; 6) purchase the new house using the finance agreed on the buy to let mortgage; 7) move from your rented accomodation into your new house; 8) wait for property prices to rise again until your old house is out of NE and into significant profit - this may take several years; 9) give the tenants notice, sell your existing house and bank the profit (subject to capital gains); 10) pay off the mortage on your new house using the profit from the sale of your old house; 11) enjoy life debt free

A fantastic mine of information regarding UK aution results for 2007. RAPID - Residential Auction Property Investment Data Enjoy!

I just completed a meeting with my financial advisor and he informed me that it is becoming virtually impossible to source competitive mortgage products for his clients. For example, I was quoted a 3% arrangement fee on a 4.99% fixed rate mortgage + £1,000 application fee. My advisor said that he believed that there was now an 80% chance of a sigificant downturn in the property market aas a result of all this. I asked him if he would be selling his property portfolio and he told me that it was already too late.

Hi Headmelter I too have a poorly performing unitised endowment that I have held for 19 years and intend to continue to maturity. Yes, I agree that the returns seem to be decidedly below expectations. However, one item nobody has mentioned and worth bearing in mind is that if you keep the endowment to maturity, any gains should be entirely free of UK taxation. Especially if you have maxed-out your ISA allowances - it may be worth a second look. Another point worth considering is that most of the dramatic gains in value should be in the later term of the endowment (e.g. the last 5-6 years) so the 10K you have after 10 years may be no accurate indication of your future savings pot. If you draw up a spreadsheet of the lifetime of the endowment, you may be able to see this illustrated in more detail.

I have been dithering regarding an investment in property for some time now, and the more I look at it, property looks like a bad investment decision at the moment. If I strip away the distractions of a mortgage to buy this property, exactly what is the average residential property investment in the UK offering?  Average yield (after expenses) of between 3-4%;  Limited opportunity for capital growth – especially in today’s market;  All the administration associated with becoming a landlord. I, for one, will certainly not be jumping into property at the moment. My money's in shares - although this class of investment has also been looking decidedly ropey over the last three months as well.

Hey Could the tide be turning in Bradley Stoke? I just took this photo of the shop window of Halifax in Bradley Stoke. 4 properties out of 32 are now showing the distinctive "New Price" (reduction) marker. See attached photo for evidence.

Yes, I have direct (and painful) experience of this issue. Bought in November 1989 in Leytonstone, East London for £94,500 House valued in 1992 at £65,000. Having lived through one crash, it's not an experience I would like to repeat.

Boiling the frog - I wonder how much longer until he's well and truly cooked? I'm 90-10 for a raise tomorrow. 2.8% CPI compared to a target of 2% - that's 40% above target.

I have been following this guy's blog with a sort of morbid fascination for the past couple of months now. Looks like his ISP has now foreclosed on his webspace. If anyone has any news please post here!

If anyone cares to look at the bottom end of the London property market (<100k), it is now being propped up by a vast number of new build flats being sold using shared ownership schemes where the buyer typically buys a 25-40% share in the property and then pays a monthly 'rent' to the developer for the balance. When (and if) property prices head south, this may leave many vunerable FTB's not only owing thousands, but also locked into rental agreements and totally unable to move. In my opinion, yet another shameful financial scandal in the making. Thoughts anyone?

Grads are ten a penny at the moment. My advice - stay on for a few more years and take a research/teaching post with a view to gaining an MSc/PhD. That really would be something to put on your CV.

Guide prices don't mean too much. However, take a look at this luverly lot ALL UNSOLD AT THE RECENT ALLSOP AUCTION and available at the quoted prices (or below if you would consider a cheeky offer). Sign of the times? ALLSOP UNSOLD AT AUCTION LIST

Realistbear There are people with severe financial and emotional problems out there having lost their homes. Please show a bit more compassion. I am sure there will be shattered lives and dreams out there as the result of this.

Hi Yes, auctions can be great. I bought my current property in an auction and despite needing some work, it was a fantastic bargain. However, prices are absolutely manic at the moment so expect to pay 20%+ over the guide prices at the London auctions. I also think auction sites are a really good barometer for what's happening in the property market in general and at the moment all the signs point to a very over-valued market - even in auction land. Please feel free to check out the following links for some free auction sites: propertyauctions.com Allsop Barnard Marcus

I'm really annoyed by this article. The main thrust of the argument appears to be as follows: Affordibility ratios have now entered a new paradigm being based on interest rates instead of overall property price The supply of homes is not keeping pace with the overall demand prices are likely to keep on rising indefinitely However, in my opinion, property prices have now entered some sort of weird twilight zone where the laws of economics just don't work anymore. Interestingly, as property prices have risen, rental yields have fallen, quite dramatically in some cases. It is now virtually impossible to earn more than 4-5% rental yield anywhere in the country. Property investors are now desparately seeking investments overseas where prices are lower and yields are perceived to be higher - despite the greater risks. You only need to look at the middle section of the Sunday Times property supplement as evidence of this; pages of advertisements for overseas property. Question for buy-to-letters; why would anyone want to take on the risks of becoming a property owning landlord in the UK when they can leave their money in the bank and earn quite a nice 3-4% with very little risk to their capital? From the point of view of the tenant, it is now possible to rent a property for considerably less than the costs of taking on a mortgage for the same property. Renting is cheaper than buying. This is a reversal of the situation that existed in the 90s whereby it was cheaper being a property owner than a renter. So what appears to be happening is exactly what happened in the dot com share price bubble in 1999-2002. People are investing in property for one reason alone - as a gamble that property prices will continue to rise and that they will make money gambling with what invariably is borrowed money. So much for the learned opinion of the Sunday Times economics correspondent. I'm sorry, but these oft quoted arguments for continued property price rises just don't wash.

This nanny government is meddling in every aspect of our lives including decisions about personal relationships. I utterly despair for the future of this country and I am filled with contempt for the dour Scot Gordon Brown who will undoubtedly be backing this legislation to the hilt.

No, I'm deadly serious. In the 90s I was earning 7k pa on a 90k investment property (7.7%). I sold quite recently and reinvested in shares. I wasn't the member of any "guild". However, I purchased quite a nice potted plant for the letting agent as a farewell gift and he wished me good luck.

To be honest, I think prices would need to drop by 50% before I would consider moving into BTL again. I know the hassle involved in being a landlord, and for 5% yield, it's just not worth the effort.

Zero Debts. 0.5m of assets including property, UK and overseas equity, bonds, antiques, gold and cash. I could probably afford a couple of investment properties at the moment, but with yields < 5%, the game's not worth the candle. The stock market is a far more rewarding proposition at present. Just waiting for house prices to reach a more realistic level before I invest in property again.

It's 2008. You have a £240,000 mortgage on your "dream" house after purchasing in 2006, after ignoring the sage advice of your rightmove pals. Interest rates have just risen to 8%. You have just received a revised repayment notice from the building society. Your monthly repayments have just risen to £2036.12 per month. Ouch! You decide that due to financial commitments you need to move to a smaller house. You contact an estate agent and ask for a valuation. The estate agent says; "based on properties in the surrounding area, we recommend an asking price of £179,995". Now, if you sell, then you have to repay your mortgage of £240,000. After estate agent's fees, that means that you owe your building society £63,000! There's only one solution, it's bankrupcy . Nine months later, you're living in a Bed and Breakfast, unemployed. Your wife has divorced you due to your financial situation and you think back to 2006 when you made a posting on rightmove.com about being depressed and wish you had not ignored the advice you got that day.