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End Of The Btl Dream ?


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HOLA441
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HOLA442
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HOLA443

If you had a million pounds - and a lot of time on your hands - and wanted a nice 8% return - then it's a nice proposal.

However, apart from their being a lack of people with a million pounds burning a hole their pockets and banks not willing to easily lend a lot of money for cheap; I noticed this:

The total price of £1,015,500 represents a gross initial yield of 8% with excellent prospects to improve upon this through a concerted programme of rent reviews in line with current market rates.

I don't know that much about NI since I live in Scotland - but I doubt that the NIHE has got increasing amounts of money over the next few years. So there is an excellent prospect of reducing rents through a concerted programme of rent reviews in line with current market rates.

I mean - 8% of £1.0155 million/14 = around £500 per month. For shitty houses - who can afford that? Realistically - they should be renting for £2-300 per month - and there is a good reason why. The people who live there can't afford to pay for their housing, that's why the NIHE has to step in.

Actually, these aren't that bad looking houses - the sort of places that would have gone for £150k+ a few years ago.

However, I don't see how most people who are maybe earning £15k gross a year could afford £500 per month.

I think I'll give it a miss.

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HOLA446

If you had a million pounds - and a lot of time on your hands - and wanted a nice 8% return - then it's a nice proposal.

However, apart from their being a lack of people with a million pounds burning a hole their pockets and banks not willing to easily lend a lot of money for cheap; I noticed this:

I don't know that much about NI since I live in Scotland - but I doubt that the NIHE has got increasing amounts of money over the next few years. So there is an excellent prospect of reducing rents through a concerted programme of rent reviews in line with current market rates.

I mean - 8% of £1.0155 million/14 = around £500 per month. For shitty houses - who can afford that? Realistically - they should be renting for £2-300 per month - and there is a good reason why. The people who live there can't afford to pay for their housing, that's why the NIHE has to step in.

Actually, these aren't that bad looking houses - the sort of places that would have gone for £150k+ a few years ago.

However, I don't see how most people who are maybe earning £15k gross a year could afford £500 per month.

I think I'll give it a miss.

Yes indeed. You can't dismiss the possibility of the rents slipping that much, since it would be an excellent means of saving public funds, causing pain to landlords only. I wonder why it hasn't happened already? A fair price might then be around half a million. Let's leave them a while before we make a cash offer?

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HOLA447

Looking at the LHA rate for the area gives you £131.82 for a 4 bedroom, £109.60 for a 3 bedroom house and £102.48 for a 2 bedroom house per week.

Assuming they are 3 bedroom houses thats £109.60 x 52 = £5699.20 x 14 houses = £79788.80 per year. (8% gross)

I can't see the LHA dropping considering it's less expensive to house social housing tenants in the private sector rather than house them in temp accommodation.

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HOLA448

Looking at the LHA rate for the area gives you £131.82 for a 4 bedroom, £109.60 for a 3 bedroom house and £102.48 for a 2 bedroom house per week.

Assuming they are 3 bedroom houses thats £109.60 x 52 = £5699.20 x 14 houses = £79788.80 per year. (8% gross)

I can't see the LHA dropping considering it's less expensive to house social housing tenants in the private sector rather than house them in temp accommodation.

cant always go by that. depends on what the house looks like inside, the finish etc, and where abouts it is. My rent is £425 (£98 a week) for a 2 bedroom house which was newly decorated when i moved in, friend round the corner is paying £375 (£86.50 a week) for a 2 bedroom house maybe cos its slightly closer to the rough area. Then if they are being rented through a agency I think they get 1 months rent given to them. And what about the upkeep of the properties etc. I cant see anyone getting near a 8% yield gross

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  • 2 weeks later...
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  • 2 weeks later...
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HOLA4414

there are none so blind

as those who do not want to see!

suspect there were a few landlords on the mainland

who did not see it coming

http://blog.propertyhawk.co.uk/2010/06/lha-budget-bombshell.html

This is what I suspect for NI, there is still a massive discrepancy between the bottom and middle of the market, caused by the gov't supporting the bottom. It must be becoming more obvious to them that there is money to be saved.

Edited by Ride_on
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HOLA4415

Here's another dog-rough BTL portfolio in receivership. Yours for £540k

http://www.btwcairns.com/property_specific.aspx?ID=15868

Looks like a job for PJ to find out how much was owing on that portfolio ;)

Imho as a job lot worth less than £200k

anecdotally I know of a BTL'er with a large stock of ex NIHE houses who's in big trouble, these fire sales will be the norm and dear help any retail buyers who bid against the investors in 2006/2007.

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HOLA4416

Somebody on another thread came up with the delightful phrase 'bear porn'.

I think the following fits that category: an entire site dedicated to receiveship jobs being undertaken by Colliers. http://www.colliers-receivers.com/

Among the highlights:

An East Belfast BTL portfolio for £395k http://www.colliers-receivers.com/property_specific.aspx?ID=13623

Sixteen brand new appartments in Co Cavan for 500,000 euro http://www.colliers-receivers.com/property_specific.aspx?ID=13588

Five Holy Land wrecks for £480k http://www.colliers-receivers.com/property_specific.aspx?ID=13652

A posh shell in Templepatrick for £495k http://www.colliers-receivers.com/property_specific.aspx?ID=13565

A 4000 sq ft bungalow for £325k http://www.colliers-receivers.com/property_specific.aspx?ID=13436

A chance to build 99 units the wilds of Fermanagh for £895k http://www.colliers-receivers.com/property_specific.aspx?ID=13590

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A person I know sold an Apt in spring 2006 to a 'buyer' who was representing an investor from the ROI - the guy dropped in that he was tasked to source approx 50 odd properties to purchase within a month or two for the investor..

my mate sold his house in may 2007 ( reckons he'd of got a little more if he sold around jan/feb ) to a similar sounding investor

anyway said house is back for sale for about an advertised 30% less. mate enquired and they will take less

i think in time the scale of repossessions in northern ireland will be substancial and will become obvious to see ( they are hiding it well just now )

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HOLA4419

I see these and it makes me both sad and angry in equal measure.

Some overleveraged cretin has singlehandely deprived 14 'hard working British families' from owning their own homes. I know we are always going to need some level of a rental market but I would hazard a guess that this is largely only neccesary as prices have become so disjointed from earnings and the BTL LL's are covering the difference - and getting repossesed for their troubles in some cases.

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HOLA4422

I nearly drowned in my coffee over that one.

A tissue for the keyboard please.

Given that the last census put the population of Derrygonnelly at about 600 it is ambitious to imagine that it could absorb that many units (even allowing for brisk population growth)

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HOLA4423

Somebody on another thread came up with the delightful phrase 'bear porn'.

I think the following fits that category: an entire site dedicated to receiveship jobs being undertaken by Colliers. http://www.colliers-receivers.com/

Among the highlights:

A posh shell in Templepatrick for £495k http://www.colliers-receivers.com/property_specific.aspx?ID=13565

They want written offers for the shell by next Friday. I think I'll waste a stamp on a very, very low written offer. Do you reckon £10,000 will do it?

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