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Are You Paying Enough Rent?

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Are you paying enough rent?

This Is Money

By Joe Knipe

16 July 2010

According to a recent poll undertaken by flat and house share website spareroom.co.uk, 41% of landlords say the rent their tenants pay is barely enough to pay the mortgages on the property they're renting.

A total of 43% have also admitted that should the interest rate rise by 2% then the rent they receive will no longer cover the mortgage.

A 1% rise in the rate would see a further 22% of landlords out-of-pocket and 10% wouldn't be able to pay if rates rose by just 0.5%.

A concern for landlords now is also that they are no longer simply at the mercy of the Bank of England; they are now facing increased capital gains tax, raised by the Government to 28% from 18%, and a crackdown on housing benefit.

More here Linky

Poor hard working landlords.. do the right thing and offer them a bit more next year.

Other wise they won't be able to afford that next house they want to price you out of ;)

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My boss, who with his fiancée has just bought a house, has put his flat out for rent and found a tenant. The monthly rent is currently about two hundred pounds less than the mortgage+maintenance fees. Add on the other costs and it comes to a really lousy yield.

:unsure:

Still, property only ever goes up and interest rates will stay low forever.

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My boss, who with his fiancée has just bought a house, has put his flat out for rent and found a tenant. The monthly rent is currently about two hundred pounds less than the mortgage+maintenance fees. Add on the other costs and it comes to a really lousy yield.

:unsure:

Still, property only ever goes up and interest rates will stay low forever.

Yep.. if they are renting through an agent even less chance of a good yield.

As for interest rates.. people assume that because BoE rates may not go up for a long time, that mortgage rates won't either.

I'm not sure why that should necessarily be the case, banks need to make a profit on their loans after all.

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The rent tenants pay is barely enough!

Amazing piece of back to front thinking there, utterly amazed to see that in a genuine article. It belongs in the daily mash.

If I started a business and found my customers weren't prepared or able to pay the asking prices for my products that would make that business viable would that be the customers fault that my business failed? Or would i just be an idiot for not getting a calculator out before i started the business? For fks sake, how ridiculous.

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You are comming at it from a wrong angle...

By renting it out below amount to cover the mortgage they are playing the old classic game of minimising losses.

If they keep it empty 0% of the mortgage is paid, if they rent it out under the mortgage amount then the gap is all the 'lose'

It is a basic economics question asked to economics students, when they are asked about a factory which is losing £200K a year, the students initially always say increase price, but they can't due to elasticity issues. So they say close it down which makes them lose even more money.

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Yep.. if they are renting through an agent even less chance of a good yield.

As for interest rates.. people assume that because BoE rates may not go up for a long time, that mortgage rates won't either.

I'm not sure why that should necessarily be the case, banks need to make a profit on their loans after all.

Funny, isn't it, that mortgage lending isn't up to much at the mo'... :P

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You are comming at it from a wrong angle...

By renting it out below amount to cover the mortgage they are playing the old classic game of minimising losses.

If they keep it empty 0% of the mortgage is paid, if they rent it out under the mortgage amount then the gap is all the 'lose'

It is a basic economics question asked to economics students, when they are asked about a factory which is losing £200K a year, the students initially always say increase price, but they can't due to elasticity issues. So they say close it down which makes them lose even more money.

My point is if they had given it five minutes thought they wouldn't have blown so much on a loss making investment property in the first place. Losing nothing is better than any loss, however much it is minimized!

The numbers didn't stack up and they were too dumb to even punch the numbers into a calculator first. Blaming the rental market for their own incompetence is hilarious.

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Just in case anyone is interested.. here is a chart of historic mortgage rates dating from 1995 to 2010:

historicmortgagerates.jpg

Not trying to prove anything, just interesting to see the data.

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  • 259 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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