Bruce Banner Posted June 19, 2009 Share Posted June 19, 2009 VI Alert! (just for the tinfoil hat brigade)According to the latest CPI figures, rents are down 0.2% on last month but 1.1% up on a year ago. As they represent over 10% of the index, if they seriously start to drop, inflation is less likely to rise much and interest rates can stay low longer. Quote Link to comment Share on other sites More sharing options...
MrB Posted June 19, 2009 Share Posted June 19, 2009 Slightly dodgy figures, ignoring maintenance (i.e lack of if renting), and the transient nature of interest rates (and price falls). That said i always felt the STRs would bite first. They never earned the money, they won it. Wheras an FTB pile feels a lot more 'real'. Quote Link to comment Share on other sites More sharing options...
andykn Posted June 19, 2009 Share Posted June 19, 2009 Real world alert!Base Rates are officially irrelevant now. Haven't you heard the news this week - lenders are stampeding to increase rates. It's over, mate - you're screwed. I think "irrelevant" is going a bit far, saving rates are based on the base rate too. And the mortgage rate increases haven't been huge. 3-month LIBOR is down on a month ago too. And I don't see how a decoupling of retail residential mortgages from the Bank of England base rate "screws" me. But, like all good bears, I'm sure no rational explanation will be forthcoming. A smiley appears to be what passes for bear reasoning these days. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted June 19, 2009 Share Posted June 19, 2009 A smiley appears to be what passes for bear reasoning these days. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted June 19, 2009 Share Posted June 19, 2009 OK, in theory cash holders are still just about gaining. Not by much though, and when you consider the fear factor of holding cash while Gordon is printing, plus the uncertainties of renting, it's easy to see why people with funds are buying. Potential cash buyer here. I'm perfectly happy renting and have absolutely no intention of buying for another year, probably longer. Quote Link to comment Share on other sites More sharing options...
enrieb Posted June 19, 2009 Share Posted June 19, 2009 (edited) I have a 25k mortgage, when interest rates were around 7-7.5% I was paying £240 a month in interest, now that the government have cut rates down to 0.5 I am paying £60 a month. If £60 a month were a realistic long term figure then it would make sense to borrow £100,000 or even £200,000 it would be easily affordable. Of course this is based on the assumption that rates will never rise back to normal long term levels, in which case your in a world of hurt for 25 years. Edited June 19, 2009 by enrieb Quote Link to comment Share on other sites More sharing options...
MrB Posted June 19, 2009 Share Posted June 19, 2009 I think "irrelevant" is going a bit far, saving rates are based on the base rate too. And the mortgage rate increases haven't been huge.3-month LIBOR is down on a month ago too. And I don't see how a decoupling of retail residential mortgages from the Bank of England base rate "screws" me. But, like all good bears, I'm sure no rational explanation will be forthcoming. A smiley appears to be what passes for bear reasoning these days. Guess you got a decent tracker before it was too late! The sucker who you would like to buy your home can't get one of these sadly, hence your house being worth a lot less than when these deals were available. Quote Link to comment Share on other sites More sharing options...
Godley Posted June 19, 2009 Share Posted June 19, 2009 The point the OP is making is that for those STR's who need to leverage to buy now is as good at time as any, I agree with this along with a growing number of people. Interest rates increasing will put further pressure on house prices, but I suspect that as the government is now gambling on inflation helping it out of its hole and so is the nation, they will revert back to RPI. Thus, forcing the increased mortgage repayments on to employers through wage increases. This government will do anything...........it's sick but true. If you are cash buyer then carry on as you were and hold out for your day. Quote Link to comment Share on other sites More sharing options...
HAMISH_MCTAVISH Posted June 19, 2009 Share Posted June 19, 2009 That's exactly right. I don't know why this simple comparison is not used more...My LL bought at the end of 2008 and is loosing money every month. It's so dumb. "Loosing" money??? One would assume you meant "losing" money..... Clearly you have no grasp of reality. BTL's with negative cashflow, still have someone else buying 70%, or 80%, or 90% of their asset for them. If you could have £300K worth of an asset class in 25 years, and someone else paid for 70% of it...... Would you consider that you had "lost money" along the way????? Quote Link to comment Share on other sites More sharing options...
scuuzeme Posted June 19, 2009 Share Posted June 19, 2009 "Loosing" money??? One would assume you meant "losing" money..... Clearly you have no grasp of reality. BTL's with negative cashflow, still have someone else buying 70%, or 80%, or 90% of their asset for them. If you could have £300K worth of an asset class in 25 years, and someone else paid for 70% of it...... Would you consider that you had "lost money" along the way????? Go on then, give us the figures. Quote Link to comment Share on other sites More sharing options...
Sour Mash Posted June 20, 2009 Share Posted June 20, 2009 Bears need normal interest rate levels. Sibley and Rinoa will be happy until we get them. You seem to believe that one is either a bull or a bear based on some sort of internal, unalterable point of view. I'm bearish right now because on the housing market because I see prices falling further over the near to mid term. There's simply nothing that supports an upturn in the market other than the possibility of general, strong inflation. As soon as I see a better outlook for prices, I'll be bullish. (So sad that intelligent debate is so often made impossible because of a need for people to fall into intransigent schools of thought as soon as there is a difference of opinion.) Quote Link to comment Share on other sites More sharing options...
ShedDweller Posted June 20, 2009 Share Posted June 20, 2009 Clearly you have no grasp of reality.BTL's with negative cashflow, still have someone else buying 70%, or 80%, or 90% of their asset for them. If you could have £300K worth of an asset class in 25 years, and someone else paid for 70% of it...... Would you consider that you had "lost money" along the way????? Well I'd be pretty pissed off to honest .. as I would have had to pay interest on the money all those years .. Quote Link to comment Share on other sites More sharing options...
Jack2 Posted June 20, 2009 Share Posted June 20, 2009 Slightly dodgy figures, ignoring maintenance (i.e lack of if renting), and the transient nature of interest rates (and price falls).That said i always felt the STRs would bite first. They never earned the money, they won it. Wheras an FTB pile feels a lot more 'real'. How do you know how real someone elses money feels? Quote Link to comment Share on other sites More sharing options...
SMAC67 Posted June 20, 2009 Share Posted June 20, 2009 I am in no position to buy now that the job situation is getting desperate. Already taken a paycut and the STR fund is safely tucked away for impending unemployment. I keep hoping for Hamish's "green shoots", but he is the only one that can see any. Squeeky bum time for me I'm afraid................... Quote Link to comment Share on other sites More sharing options...
InternationalRockSuperstar Posted June 20, 2009 Share Posted June 20, 2009 "Loosing" money??? One would assume you meant "losing" money..... Clearly you have no grasp of reality. BTL's with negative cashflow, still have someone else buying 70%, or 80%, or 90% of their asset for them. so you're not bothered about holding a depreciating asset with negative cash flow Quote Link to comment Share on other sites More sharing options...
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