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gruffydd

Btl Imploding In Cardiff

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Just received the second call, in two days, from a large EA in Canton, Central Cardiff. The EA told me that they'd just taken on a flood of new properties. This was the same EA who told me that they were already saturated with properties a couple of months ago. Canton is classic BTL land, or so I'm told. So it looks like BTL is imploding in Cardiff. AND ABOUT TIME TOO!

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But Kirstie and Phil said the ripple effects from Cardiff meant that prices in Methyr Tydfil are still going to rise 50% in a year so that can't be right (even though it's the incapacity benefit capital of the UK )

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Being an ex-EA, I often help friends and family out when they're looking to move, so I'm registered with EAs here and there (mainly in the Bristol, Cardiff and Cheltenham areas at the moment). I couldn't afford to work in estate agency again as the pay's so dire.

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Its all a little bit quiet here in south wales at the moment, lots of redundancies etc

Prices around cardiff and surrounding areas are holding but there not much left to hold them up.

Feels like the calm before the storm.

Who else is from around this area? B)

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Just received the second call, in two days, from a large EA in Canton, Central Cardiff. The EA told me that they'd just taken on a flood of new properties. This was the same EA who told me that they were already saturated with properties a couple of months ago. Canton is classic BTL land, or so I'm told. So it looks like BTL is imploding in Cardiff. AND ABOUT TIME TOO!

...SO THAT'S WHAT THEY MEAN BY "IN IT FOR THE LONG-TERM"....always wondered!!!

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...SO THAT'S WHAT THEY MEAN BY "IN IT FOR THE LONG-TERM"....always wondered!!!

hey 18 months maybe 2 years, pretty long term :lol:

they over looked that they can only hold thier breath for so long. Without short term cash flow you can forget long term, will the numpties realise this... nooooo prices always go up.

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Apparently some 'mentalist' BTLetters are still investing in The Valleys in the hope that once they have priced out all the FTBs, they'll be able to increase rents. As The Valleys are so awash with money, the BTL brigade will be rolling in in before long. :lol:

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But Kirstie and Phil said the ripple effects from Cardiff meant that prices in Methyr Tydfil are still going to rise 50% in a year so that can't be right (even though it's the incapacity benefit capital of the UK )

If you slap Kirsty very hard the ripple effect will be felt way beyond Methyr.

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Apparently some 'mentalist' BTLetters are still investing in The Valleys in the hope that once they have priced out all the FTBs, they'll be able to increase rents. As The Valleys are so awash with money, the BTL brigade will be rolling in in before long. :lol:

I never understand how this could ever work. If FTBs dont buy because they can't afford the interest payments on a loan, how can they ever afford to pay a landlord's own interest payments plus profit? IMO there's a natural balance at paly, and BTL can only be profitable if you take into account capital appreciation.

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I never understand how this could ever work. If FTBs dont buy because they can't afford the interest payments on a loan, how can they ever afford to pay a landlord's own interest payments plus profit? IMO there's a natural balance at paly, and BTL can only be profitable if you take into account capital appreciation.

Its quite simple why.

FTB home typically150K @ 5% repayment with 10% deposit = £790 monthly.

BTL lanlord puts down typically 35% deposit and most do IO loans therefore monthly only cost £406.

All clear now.

Edited by Dicky

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Most of the rental properties in the Valleys are geared towards single mums and lazy B**tards who just don't want to work.

The local council pays the rents direct to owner; therefore, I can't see any major increases in rental income because the council sets the rate and not the landlord.

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FTB home typically150K @ 5% repayment with 10% deposit = £790 monthly.

BTL lanlord puts down typically 35% deposit and most do IO loans therefore monthly only cost £406.

So they're making a 3.2% yield on that flat? They'd do better to borrow the money and stick it in a savings account.

Heck, they'd do even better to take their 35% deposit, stick it in a savings account and forget the mortgage completely.

Just another example of how BTL makes no sense without house price inflation.

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Being an ex-EA, I often help friends and family out when they're looking to move, so I'm registered with EAs here and there (mainly in the Bristol, Cardiff and Cheltenham areas at the moment). I couldn't afford to work in estate agency again as the pay's so dire.

How come so many of them have such fantastic cars ?

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The property is seen as a long term investment.

There are very few businesses that turn a profit at the outset, indeed if you took that capital invested in most businesses they would be lucky to see a return of 5%.

The whole concept is that you have to speculate to accumulate, you dont work the figures out over a month, you work them out over a decade plus.

Work it out for yourself, many many many BTL investors have very large portfolios built up over decades.

Maybe a big problem with the UK is everyone think it just happens. To start any business it takes time, and it takes a lot of money.

Most people starting up in business soon realise they are working for less than the minmum wage in the first few years, however the rewards later are potentially huge, or in most cases very poor.

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Work it out for yourself, many many many BTL investors have very large portfolios built up over decades.

I was talking more about recent BTL-ers.

But the point still stands: how many are actually getting better yields by renting out those properties than they'd get by selling and sticking the money in a savings account?

If you bought a house for 50k ten years ago that's valued at 200k today, and you're renting it out for 750 a month, you're still making less than you'd get with that money in a savings account, and you have all the hassle of renting the place out, maintenance to pay for, plus potentially long periods with no income at all if you can't get tenants.

Unless you've got some good tax dodge going, the sole, single, only benefit is house price inflation... if there is any. No house price inflation -- or worse, house price deflation -- makes BTL a mug's game right now.

As I mentioned before, my landlord is making about 2.5% yield on our house. Why don't they sell it and bank the 400k or so that the price has increased by in the time I've lived here? Are they just so altruistic that they prefer to lose money to keep me happy? Not that I'm complaining, of course... having to move would be a real pain: but financially I can't see that it makes any sense for them.

Edited by MarkG

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I'm Welsh and have read this thread with interest.Left South Wales recently, it has been bonkers over the past 5 years or so.I agree that prices have stabilised in Cardiff.Places that most people wouldn't have looked at 10 years ago (Splott, Grangetown etc) have seen daft rises and have become fashionable to buy in.Friends bought in Splott several years back at under 65 grand and made 135,000.Canton has been even more ridiculous (and isn't even a particularly nice area).But... the worm is turning, and Swansea has recently witnessed a turnaround with a small (but not insignificant) drop in prices recently.

As for Kirsty saying Merthyr will rise 50%, I think she should seek treatment for what is clearly a serious mental health problem.Although it's only half an hour from the capital, in terms of facilities, it's not great, although it is slowly improving in this respect.It's already seen what - for the valleys - are astronomical rises.Many people commute to work from all parts of the south wales valleys, to Cardiff, Swansa and Newport. The jobs situation (or lack of it) in the valleys and many other areas of wales (including the pretty, touristy parts) is indicative of the total lack of investment in much of Wales (excepting Cardiff). However, we must also consider the opinion of Big_Jay (obviously an authority on social psychology/sociology) that all occupants of rental properties in the valleys are 'lazy b*****ds who don't want to work' and 'single mothers'.While opinions are valued on this forum, you don't mark yourself out as someone who takes a great deal of time to consider a subject.Numpty.

As wages have seen few changes for years in many areas of Wales (and are the lowest in the UK), this situation is unsuprisingly not sustainable, and thankfully we are at last seeing the market slowing.

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Homebird you may be Welsh but have you ever lived in the valleys? If you had then you would realised just how many single young girls who are living in rental accommodation paid for by the tax payers. My sister-in-law, works in Cardiff, commutes 3 hours a day, and happens to be on less money than a single parent who doesn’t want to work. The valleys are serious decline even with the high house prices There are some serious social problems in the valleys which are getting worse. Most of the people I grew up are either career criminals (not very good I might add), alcoholics or drug addicts.

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On the EA cars side of things - with many EA positions you are expected to have your own impressive car. Spoke to an EA recently who had to upgrade to a 20k car before he secured a new job. Working as an EA just doesn't make financial sense (on the whole). However, if you work for a good London EA, or at the top-end - Savills or something, or you run your own EA, you can make good money.

I know some EAs that subsidise employee salaries by encouraging them to engage in dodgy practices. The staff are only too happy to push their salaries up to living-wage levels by getting involved in these scams.

G

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Good point on Welsh wages Homebird. My brother wanted to do some temping after he left uni and went to a few agencies in South Wales. He was talking to an agency in Swansea and they told him he could expect £5.00-6.00 an hour, but he might even get 7 quid an hour if he was prepared to work in Cardiff. He decided to emigrate!

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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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