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Crazy88s

It Is True: Yields Are Rising

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TTRTR is indeed correct. Rent yeilds are rising. Here is an example

An aquaintence has been trying to sell his house for over a year.

It was originally priced at £285K. He could not sell so after 3 months

decided to rent it out for 1K/month. It was rented for 6 months since then it has been void.

Lets assume that there was no void period.

The yield would be 12K/285K = 4.2%

Now he still cant sell it and after a few reductions it is up for sale for

225K and the advertised rent is now £900PCM, this is a potential yeild of 4.8%

A RISE OF 0.6% yeild, WE ARE SO STUPID. WE SHOULD LISTEN TO TTRTR.

by the time the bloodbath is over the yeild will be indeed much higher that much is true ,

that will only because the value of many properties will have reduced so much.

(He had not mortgage) He does not want the hassle of being a landlord and knows

that he can make more money elsewhere.

C88s

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Guest absolutezero
I think you might miss what hes getting at  :)  have another quick re-read.

Enlighten me.

Void means no-one in paying the rent?

Therefore no money coming in.....

And anyway, there was/is a void period

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Guest absolutezero

Got it!

He's reduced the price hence the increase in yield!

Durrr! Silly me.

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Guest boredwaiting
Enlighten me.

Void means no-one in paying the rent? 

Therefore no money coming in.....

And anyway, there was/is a void period

He is saying although the rent value is dropping the house prices are dropping faster and therefore there is a larger yield. However BTL'ers are losing money with regards to their rent and the value of their investment.

The six month void is just a factual statement and in this case (for you) a red herring....

(I am just saying how I see it - don't flame me :) )

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Enlighten me.

Void means no-one in paying the rent? 

Therefore no money coming in.....

And anyway, there was/is a void period

Yes mate but its quasi logic that he is using on purpose.

It dosnt matter that there was a void its irelevant for his point.

Im quoting you so i cant remember the figures he used but the jist is that Yields are only rising because prices are falling so much.

In reality he is saying that yeilds are falling.

See how he drops it down to 225K (i think).

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Enlighten me.

Void means no-one in paying the rent? 

Therefore no money coming in.....

And anyway, there was/is a void period

Ignore yield

Price in Dec £285k monthly rental £1000

Price now £225k monthly rental £900

yield in Dec=£1000*12/285k

yield now = £900*12/225k

So yields are increasing because market prices are falling quicker than market rents.

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Got it!

He's reduced the price hence the increase in yield!

Durrr!  Silly me.

Now since your post ended up above mine and boredwaitings and Eeks .. then i will assume you figured that one by yourself :D

EDITED: to include eek :lol:

btw not laughing at you in anyway, its always best to ask if you dont understand, and we all make oversights, i have to include little explainations like this cause it turns out people are f*ckin stupid and just read into something whatever they want :)

SECOND EDIT:

Not saying in anyway YOU are stupid, people en-mass are stupid, the stupid remark was directed at them and not for your oversight.

THIRD EDIT:

British gas just phoned as a type of cold call.. i recommend doing this it ended the conversation quickly.

Him: can i speak to mr chuzby

Me: who is it

Him: John from british gas, can you spare me two minutes?

Me: I dont want to talk to you john.

Him: goodbye mr chuzby.

Edited by theChuz

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The most interesting thing for us is that the price has dropped 21% in a little over a year.

Not bad and is real annecdotal evidence of what is happening in the east midlands. I expect the drops are more profound in the smog.

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The most interesting thing for us is that the price has dropped 21% in a little over a year.

Not bad and is real annecdotal evidence of what is happening in the east midlands. I expect the drops are more profound in the smog.

Hang on a minute - it's only the ASKING price that has dropped. That might just be because the asking price was too much to start with, rather than an actual shift in the market, surely?

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Hang on a minute - it's only the ASKING price that has dropped. That might just be because the asking price was too much to start with, rather than an actual shift in the market, surely?

There are a number of similar properties in the area some of which are still at the higher asking price. What is important in my view it is now apparent that people are prepared to lower there expectations.

But you do have a point, in fact on average I think only 91% of asking price is actually achived so maybe he his asking a reasonable price and will get a quick sale and maybe he will ahve to take a further hit (30% fall), compared to others it looks cheap but in absolute terms I personally think it is OP.

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Hang on a minute - it's only the ASKING price that has dropped. That might just be because the asking price was too much to start with, rather than an actual shift in the market, surely?

fvck me the asking price was to much who would of thought it :lol::lol::lol:

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The thing with investors is that if they have any sense at all, they should withdraw from the market altogether as many FTBs have done.

This bubble was driven by investors who wanted capital gain - and they should now have disappeared.

So this leaves investors who regard yield as the most important.

And they must want a crash just as much as anyone, because it's the same psychology - why buy now when I can wait for yields to rise a lot more ?

Nothing's going to stop prices from falling for a long time.

Edited by Warwickshire Lad

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Guest absolutezero

Oi Chuzby!

No offence taken.

Always best to check if one doesn't understand something.

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So this leaves investors who regard yield as the most important.

And they must want a crash just as much as anyone, because it's the same psychology - why buy now when I can wait for yields to rise a lot more ?

So the pressure for a crash builds from yet another direction :D

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This is a temporary scenario as rents take time to catch up with other factors. However rents are most definitely on the way DOWN. Not only that but the market is almost as flooded with unrented property as unsold property.

There are going to be lots of BTL bankruptcies.

TIP: If you are renting, ask for a reference for the landlord. Of course all rent agencies will faint and be extremely agressive if you ask this "How DARE you ask for a landlord reference...it is YOU the tenant who GIVES US a reference, because we want to make sure YOU can PAY the rent".

Keep calm at all costs. Point out that in the current market it is highly likely that some landlords are behind with their mortgage payments and you feel entitled to check that the Landlord has sufficient funds to cover his outgoings.

If enough tenants do this, it will become accepted practice.

VP

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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