Message to TTRTR

[Who Knows]

Don’t you think that living in Sweden clouds your judgement somewhat!

Like you I was fairly bullish in that I thought a crash was unlikely - that is until I was relocated to the South West. Since then I have travelled through the area and to Wales. My opinion has now changed massively. In the London area there is a good infrastructure (trains and road), good schools and access to a multitude of highly paid work.

This is not the case throughout the country and in many areas house prices to salary are massively skewed. The market can not stay as it is under these circumstances and personally I would NEVER buy here at the current levels. When rental costs are a fraction of mortgage costs (even after putting down a big deposit) you would have to be an utter fool to buy in many parts of the south west. Even if you could affort it which most people cant. FTB's are priced out, BTL makes no sense as you can't even cover costs. Flat owners can't move up the chain!

A correction has to happen to get things back on track – don’t say you haven’t been warned!

[Time to raise the rents.]

People have tried that one on me before.

If location is important, why was it that I was the only one discussing 4.75% as a peak 12 weeks ago?

Maybe stepping back for a while is what's needed by many posters here. I have the unique situation of being a London landlord, but able to see outside the UK picture myself.

[Who Knows]

Fair enough but just a quick example:

You can rent a 4 bed georgian house in Clifton, Bristol for £2000 a month - to buy the same property would cost £695,000 - £3707 A MONTH AT 4%

The property I am currently renting is £675 a month - a similar one 3 doors away is on the market at £280,000

How can the market continue in these circumstances?

[Time to raise the rents.]

Well it's all about location isn't it. Maybe there are a large number of OO's in your area & few tenants & therefore rents are lower & prices are higher. I don't know because I don't know your area.

Things seem to be broadly in balance in Wandsworth, where I rent my places out. Rent of 640pw for a place of mine that's roughly worth 530K is fair IMO.

Where I live in Sweden, the area is very popular with OO's, but not tenants. The houses are worth more than they could justifiably be worth to a landlord. There's nothing wrong with that IMO. However 20km away, I could buy a similar sized house for one tenth the price of my house here. That doesn't mean everyone's moving to the area, it just means that this area is more popular.

[Who Knows]

Its a university city with more tenants than you can handle

The areas highlighted are the best in the city and were rental paradise

- Prices in the South West no longer bear any resemblance to what people earn, nor what investers can rent them for - in other words they are totaly unsustainable and a crash has to occur to get things on track. In my view it has gone on this far as people relocated here as Bristol boomed and helped fuel the property price increase. Now its no longer worth buying here and will soon end in tears

[Time to raise the rents.]

Its a university city with more tenants than you can handle

The areas highlighted are the best in the city and were rental paradise

- Prices in the South West no longer bear any resemblance to what people earn, nor what investers can rent them for - in other words they are totaly unsustainable and a crash has to occur to get things on track. In my view it has gone on this far as people relocated here as Bristol boomed and helped fuel the property price increase. Now its no longer worth buying here and will soon end in tears

<{POST_SNAPBACK}>

Any website's I can look at to see?

[Who Knows]

Rightmove will be a good indication of cost to buy compared to cost to rent

though if you check these areas: Clifton, Cotham,Redland,Henleaze,Bishopstone

You will also see if you check Bristol as a whole there are what looks like bargains - but most of these are family homes - in areas where the school achievement is well below the national average - indeed Bristol has the unenviable reputation of 1 in 8 leaving school with no qualifications at all - so in other words family homes where no family would buy! Even then they are 140K + for a 3 bed.

Costs bear no relation to wages earned - there are some well paid jobs without a doubt but a hell of a lot of very low paid call centre type jobs and a road structure that does not make commuting a pleasant alternative. Coupled with limited rail links. Its a great city that has boomed but having moved here and sold my Surrey place I have a large deposit and would still consider buying in London/Surrey - making a low offer as these areas have the infrastructure, public transport, schools and wages to support the costs of homes - the South West and many parts of the North and Midlands dont - and in London and the South East if you have no equity - you have now chance of buying - it is coming to an end. Thats not doom-mongering just simple rational thought.

[Time to raise the rents.]

There you go, there's something for everyone!

[hra]

Rightmove will be a good indication of cost to buy compared to cost to rent

though if you check these areas: Clifton, Cotham,Redland,Henleaze,Bishopstone

and Holby.

[Who Knows]

Ok then lets pretend all is OK - Prices will just keep going up regardless of earnings - so who is going to buy??

If a property costs 280K and lets say you have 100K deposit

mortgage of 180K @ 4% = £960.17

YOU DONT NEED TO BE AN ECONOMIST TO WORK OUT THIS IS NOT A GOOD IDEA when you can rent the same place for less than £700!

[Time to raise the rents.]

Fair enough, but that's also why many people start with small flats & try to work on the amount thay have in cash for their eventual family home.

It sounds smarter to rent in that area, but like I said before, it just may be unpopular with tenants there and popular with OO's.

[Who Knows]

Fair enough, but that's also why many people start with small flats & try to work on the amount thay have in cash for their eventual family home.

It sounds smarter to rent in that area, but like I said before, it just may be unpopular with tenants there and popular with OO's.

<{POST_SNAPBACK}>

Its increadibly popular with tenants - I also have sold a flat and have 150K in hte bank I WOULDNT BUY HERE AT THESE PRICES WHICH IS WHY THE MARKET IS STATIC AND STARTING TO FALL - ITS OVER -

[rentboy]

Any website's I can look at to see?

<{POST_SNAPBACK}>

You could read the FT article on Cherie's BTL's in Bristol if you like?

Blairs could lose £50,000 from sale of flats

By Jim Pickard, Property Correspondent

Published: October 2 2004 03:00 | Last updated: October 2 2004 03:00

Tony and Cherie Blair could face a loss of up to £50,000 after deciding to sell the two Bristol flats that landed them in controversy two summers ago.

They are among many property speculators who have been left exposed by a combination of excessive supply and faltering demand for flats.

In 2002, the prime minister and his wife haggled down the price of the two-bedroom apartments at the Panoramic development from £295,000 to a reported £269,999 with the help of Peter Foster, a convicted conman.

But Bristol was already close to the peak of its property boom then, and prices for luxury flats in the city have barely risen since.

A two-bedroom flat at the Panoramic with good views sold recently for only £250,000, while another failed to find a buyer and is now being let.

Downing Street confirmed yesterday that the Blairs, who have bought a £3.6m house in Connaught Square near Hyde Park in London, wanted to sell the Bristol flats, which are held through trusts.

The sale of the properties at the current market level, taking into account stamp duty and estate agents' fees, could add up to a loss of £50,000. One agent said: "It is quite difficult to get high prices at the moment. The Blairs are unlikely to get their money back."

Another said: "I think those prices have remained at best static . . . the flats have had a few years of wear and tear, and have lost some of their gloss."

Bristol epitomises the potential for oversupply of flats right across the country. Like many other cities, it has seen a boom in inner-city residential development, because of government policy which encourages high-density brownfield schemes and frowns on sprawling suburban estates.

New flats have sprung up across the country, often alongside canals or harbours. Many have been bought for their rental income by pension funds or investment companies.

In 2000, 51 per cent of new buildings registered were detached homes, compared with 21 per cent flats. For the year to June 2004, only 32 per cent were detached houses, while 37 per cent were flats.

"In the centre of cities it has been predominantly flats," said John Stuart, director of economic affairs for the House Builders Federation. City Lofts, a listed company with urban property schemes across the country, said yesterday that demand was still strong.

But in Bristol at least, institutional investors are definitely starting to rein back their spending, according to Paddy Sykes, head of residential property at King Sturge, the agents.

He said it would be "silly to pretend" that the market had not cooled in the past six months, adding: "The investor market has dropped away. Not completely, but previously if a block of 100 flats came on the market, 90 per cent of the buyers would be investors. Now it would be more like 30 or 40 per cent."

Meanwhile there was speculation yesterday that the Blairs may have bought their new house at Connaught Square at the wrong point in the property cycle.