The Str Question

[Time to raise the rents.]

Do I sit on my delflating deposit earning a lower & lower return, scrambling to stay with a competetive rate, whilst my rent rises, or do I take the plunge & get back in while the market is still soft & I have a chance to limit my losses?

It all hinges on whether this is a one-off rate cut, or the start of a series of cuts.

Mmmm, dilema, it must be difficult being on the fence (being able to afford a home with a good deposit, but choosing not to buy).

[smarty]

Do I sit on my delflating deposit earning a lower & lower return, scrambling to stay with a competetive rate, whilst my rent rises, or do I take the plunge & get back in while the market is still soft & I have a chance to limit my losses?

It all hinges on whether this is a one-off rate cut, or the start of a series of cuts.

Mmmm, dilema, it must be difficult being on the fence (being able to afford a home with a good deposit, but choosing not to buy).

<{POST_SNAPBACK}>

Not difficult at all, I have saved £10,000 since January by not buying .

This is using the land registry figures and rightmove.co.uk

[echapps]

Mmmm, dilema, it must be difficult being on the fence (being able to afford a home with a good deposit, but choosing not to buy).

<{POST_SNAPBACK}>

"Sitting on the fence" describes a person who can't decide which of two courses of action he should take. Anyone who has STR'd has made a concious decision to do so and really can't be labelled as indecisive. And the main reason behind most people's STR decision is usually something other than HPC: they are relocating, need to get into a school's catchment area, they have divorced, etc.

[busta move]

Obviously you're just baiting with that question so I'll not bite but I would ask you for some clarification:

I agree that cash is not making much money (perhaps even deflating slightly) but I don't see rents rising so please provide some justification for your claim.

With house prices falling by about 5% yearly at the moment, how are they a better return than just putting it in a bank?

Surely, it all hinges on whether house prices rise rather than on IRs falling.

[Pink Flamingo]

On the contrary - I moved into rented 6 months ago and have been watching my savings go happily upwards while the local property prices slide rapidly downwards

Hmmmmm, money safely tucked away earning me money or money invested in a large pile of bricks & mortar now worth 10% less than it was at the start of the year ...... I think I know which I'd prefer

[Roman Abramovitch]

I like your style Pink Flamingo ,call me anytime you want a job.

Oil at $70 a barrel by Xmas 2005,you heard it here first folks.

Followed by house price crash!!!!!!!!!!!!!!

[sign_of_the_times]

Do I sit on my delflating deposit earning a lower & lower return, scrambling to stay with a competetive rate, whilst my rent rises, or do I take the plunge & get back in while the market is still soft & I have a chance to limit my losses?

It all hinges on whether this is a one-off rate cut, or the start of a series of cuts.

Mmmm, dilema, it must be difficult being on the fence (being able to afford a home with a good deposit, but choosing not to buy).

<{POST_SNAPBACK}>

oh, the wit of the poisened dwarf....how we laugh..........at you

STR are certainly not losing money right now, its win win for us as we add to our deposits each month while property prices continue to fall

as for those with their money in property, what to do ? pray the falls won't take them into negative equity or try to sell in a falling market.........tough isn't it

[sign_of_the_times]

BREAKING NEWS....................

troops called in to high street as tens of thousands head for estate agents following MPC decision to slash rates by 0.25%...................

Edited August 4, 2005 by sign_of_the_times

[Pink Flamingo]

So that's what all those police are doing in London today Calming the masses as they grapple desperately to get onto the property ladder! Perhaps I should leave ealry and get into town myself before all the bargans are had ......

[ShirtyTheSlightlyAggresiveBear]

Time to raise the rents, serious question.

Your sitting on a fairly substantial amount of assets based in the UK. You've said back in the past that ultimately you will move back to Sydney.

My question is, while you have seen substantial gains in your property investments, during this same period the pound had weakened considerably against the AU dollar. (Almost 25% decrease). How far can the pound fall and the AU dollar rise???

Do you have a master plan to protect your UK gains while still having the chance to relocate down under, or are you pretty much like everyone else stuck waiting to see how the situation unfolds over time and whether you can cash in while the goings good AND get a decent FX rate.

[Ignorant Steve]

Do I sit on my delflating deposit earning a lower & lower return, scrambling to stay with a competetive rate, whilst my rent rises, or do I take the plunge & get back in while the market is still soft & I have a chance to limit my losses?

It all hinges on whether this is a one-off rate cut, or the start of a series of cuts.

Mmmm, dilema, it must be difficult being on the fence (being able to afford a home with a good deposit, but choosing not to buy).

<{POST_SNAPBACK}>

Good call. If we are in for a series of rate cuts then as an STR my decision as to when to buy is significantly different than if this cut is a one off.

I strolled into a few agents over the last few weeks expecting that my "Currently renting having sold, looking to spend XXX" might have whet their appetite. Met with absolute indifference, maybe there is enough steam left in the market to keep it bubbling along nicely and prevent low offers being taken seriously.

[Time to raise the rents.]

"Sitting on the fence" describes a person who can't decide which of two courses of action he should take.  Anyone who has STR'd has made a concious decision to do so and really can't be labelled as indecisive.  And the main reason behind most people's STR decision is usually something other than HPC: they are relocating, need to get into a school's catchment area, they have divorced, etc.

<{POST_SNAPBACK}>

They're sitting on the fence unless they decide to spend their money on something other than a property.

[Time to raise the rents.]

Obviously you're just baiting with that question so I'll not bite but I would ask you for some clarification:

I agree that cash is not making much money (perhaps even deflating slightly) but I don't see rents rising so please provide some justification for your claim.

With house prices falling by about 5% yearly at the moment, how are they a better return than just putting it in a bank?

Surely, it all hinges on whether house prices rise rather than on IRs falling.

<{POST_SNAPBACK}>

I raised my rents by 4%. Where's your justification in saying HP's are 5% negative?

[Time to raise the rents.]

On the contrary - I moved into rented 6 months ago and have been watching my savings go happily upwards while the local property prices slide rapidly downwards  

Hmmmmm, money safely tucked away earning me money or money invested in a large pile of bricks & mortar now worth 10% less than it was at the start of the year ...... I think I know which I'd prefer

<{POST_SNAPBACK}>

Another suffering from the illusion of failing to account for tax & inflation. Sad.

[Time to raise the rents.]

BREAKING NEWS....................

troops called in to high street as tens of thousands head for estate agents following MPC decision to slash rates by 0.25%...................

<{POST_SNAPBACK}>

Well if you say so.............

[the end is a bit nigher]

They're sitting on the fence unless they decide to spend their money on something other than a property.

<{POST_SNAPBACK}>

aren't u the poster who said that a £610k house in Wandsworth (or somewhere in the south) should actually be around £475k i.e. 20% lower than the asking price?

there are a couple of houses near me that are up for £600k which i would buy tomorrow if they dropped the price to £475k

so what's the difference??

[Time to raise the rents.]

Time to raise the rents, serious question.

Your sitting on a fairly substantial amount of assets based in the UK. You've said back in the past that ultimately you will move back to Sydney.

My question is, while you have seen substantial gains in your property investments, during this same period the pound had weakened considerably against the AU dollar. (Almost 25% decrease). How far can the pound fall and the AU dollar rise???

Do you have a master plan to protect your UK gains while still having the chance to relocate down under, or are you pretty much like everyone else stuck waiting to see how the situation unfolds over time and whether you can cash in while the goings good AND get a decent FX rate.

<{POST_SNAPBACK}>

Fair question & here's a fair answer:

At the moment I've decided that we'll be renting in Sydney. The exchange rate is part of that decision, in that when Sterling eventually strenthens against AUD, we will have a much better purchasing power than now. SO the rate would need to change for the decision to change.

Also, I can rent a house in Sydney for 2% of its value whilst IR's there are around 7% on a home loan right now. It has always been my opinion since I joined the forum (and before) that property in Aus was overvalued due to such low yields, so the very real falls going on there are no suprise.

In terms of Sterlings purchasing power in AUD right now, as long as we don't transfer a large sum, our options will still be open in the future when we're more confident we'd get fair value. I suspect that the exchange rate will start to swing back when the IR's in Aus are tipped to start coming down.

Maybe this is the moment I should point out to my favourite fan CIUW that I am not a Kiwi.

[Time to raise the rents.]

aren't u the poster who said that a £610k house in Wandsworth (or somewhere in the south) should actually be around £475k i.e. 20% lower than the asking price?

there are a couple of houses near me that are up for £600k which i would buy tomorrow if they dropped the price to £475k

so what's the difference??

<{POST_SNAPBACK}>

I'm basing my valuation on rents in parts of Wandsworth. There are streets & areas where houses really are worth 610 & more, but not to me, I want to make a profit. They're worth that to OO's who are more interested in the location and other factors than me.

[Pink Flamingo]

Another suffering from the illusion of failing to account for tax & inflation. Sad. 

<{POST_SNAPBACK}>

Erm ..... I actually have factored that in .... and I am still making more with my money invested 'elsewhere' than I would be if it was still tied up in my depreciating house. Add to that the fact that I no longer have any house running costs, buildings insurance etc etc.

No, on this occasion I definately know I've made the right decision And if I get the urge to buy again I simply have to go into an EA, put in a low offer Bobs your Uncle

[sign_of_the_times]

I raised my rents by 4%. Where's your justification in saying HP's are 5% negative?

<{POST_SNAPBACK}>

are you thick? no, genuinely....are you thick???

can't you see you are losing more and more in asset depreciation as each month goes by. raising your rents by 4% will not claw this back.......

run along now...haven't you got some plumbing related emergency to attend to ?

[busta move]

I raised my rents by 4%. Where's your justification in saying HP's are 5% negative?

<{POST_SNAPBACK}>

Hometrack London annual rate is currently at -5%. Even some of the most favourable metrics are showing lower than the interest rates that you would get on the cash.

My rents have not gone up and I don't know anybody who's have. (And most of my friends are renting).

Does anyone have any decent statistics about rental price changes?

[Time to raise the rents.]

As predictable and boring as ever.

We'll compare notes again this time next year and I bet my financial position will be stronger for having stayed out of property.

Change the record TTRTR, you're not doing your remaining credibility any favours.

<{POST_SNAPBACK}>

Actually it seems we're comparing notes now for this past year.

I have done very nicely by not listening to the HPC bears.

[ShirtyTheSlightlyAggresiveBear]

Maybe this is the moment I should point out to my favourite fan CIUW that I am not a Kiwi.

LOL !

Also, I can rent a house in Sydney for 2% of its value whilst IR's there are around 7% on a home loan right now. It has always been my opinion since I joined the forum (and before) that property in Aus was overvalued due to such low yields, so the very real falls going on there are no suprise.

Wholly agree. Have a mate on the gold coast who was renting a 100m walk to the beach newbuild townhouse for a fraction of what it would cost to buy. Sad but true, there a lot of deluded "investors" down under subsiding tenants holding out for future growth while nursing negative cash flow, yield just does not come into the equations.

[Bill Gates]

Actually it seems we're comparing notes now for this past year.

I have done very nicely by not listening to the HPC bears.

<{POST_SNAPBACK}>

I think that "Time to Raise The Rents" is confusing asking prices with the proper and correct price for a property. The asking price is just what the vendor wants for their property and should not be mistaken for being the correct or proper price for the property.

You can argue that the property crash has already occurred because it is only asking prices that have risen and provided that buyers only offer the correct and proper price for the property rather than belieivng the asking price then you can argue that house prices have crashed already.

TTRTR is under a serious delusion in thinking that his properties are actually worth the asking prices that he has seen advertised for similar properties. The asking price is just a speculative attempt to trap the unwary and niave and gullible.

Even an estate agent valuation of his properties will not give an accurate assessment of the value of his properties because in the end a property is only worth what a buyer is prepared to pay for it rather than what the estate agent thinks a property is worth.

TTRTR should think again about the correct and proper value of his property portfolio instead of boasting about how much in "paper" profit gains his property portfolio has gone up by since an estate agent valuation is worthless because at the end of the day you need to find a buyer who is prepared to pay the price you want for a property and that is a big assumption and a classic mistake that buy-to-let retards like TTRTR tend to make.

Edited August 4, 2005 by Bill Gates

[newaccount99]

Do I sit on my delflating deposit earning a lower & lower return, scrambling to stay with a competetive rate, whilst my rent rises, or do I take the plunge & get back in while the market is still soft & I have a chance to limit my losses?

It all hinges on whether this is a one-off rate cut, or the start of a series of cuts.

Mmmm, dilema, it must be difficult being on the fence (being able to afford a home with a good deposit, but choosing not to buy).

<{POST_SNAPBACK}>

I think it hinges on slightly more than just the mthly rental v mortgage cost. A few of the considerations that are in my "rent v buy decison pot".

1) Despite some slight softening, House prices are still at historic highs, what is the risk of further falls v further rises.

2) Although in a well paid IT job - how secure is this, how flexible do I need to remain regarding renumeration and locale.

3) Houses I aspire to purchase are in the 3% stamp duty range (>£10K) - so I better be blo*dy sure that i'm up for the commitment of a re-purchase....changing my mind after the event will be darn expensive.

4) I'm in my mid-30's, I would like a change of pace professionally does it really make sense to commit to a non-appreciating asset at this point in time?

To be honest I don't think 0.25% or even 0.5% will make one iota of difference to the above points and I see myself renting for at least the next 12mths.