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Si1

When The Market Seems To Be At A Bottom - Will You Be Investing In Btl Or Property Funds?

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As per title

Are residential and commercial property funds a decent alternative to BTL, minus the leverage, but WITH more diversification?

(edit: and is there a low cost option or ETF?)

Edited by Si1

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Nope. Years of stagnation at the bottom IMO. even then my money will all be in the house I buy to live in and keeping my mortgage to a minimum. And I'd never borrow to invest in anything. (not unless rental yields were 20% anyway)

Edited by Pent Up

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As per title

Are residential and commercial property funds a decent alternative to BTL, minus the leverage, but WITH more diversification?

(edit: and is there a low cost option or ETF?)

I'll probably be desparately trying to find work.

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Nope. Years of stagnation at the bottom IMO. even then my money will all be in the house I buy to live in and keeping my mortgage to a minimum. And I'd never borrow to invest in anything. (not unless rental yields were 20% anyway)

I agree on the stagnation front - but let me rephrase - in say 10 years+ when we think the stagnation is over, are investment funds in UK property a viable alternative to exposing yourself to property after all the stagnation etc has happened?

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I agree on the stagnation front - but let me rephrase - in say 10 years+ when we think the stagnation is over, are investment funds in UK property a viable alternative to exposing yourself to property after all the stagnation etc has happened?

Maybe. I don't think it would be for me. Maybe as part of a diversified portfolio.

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As per title

Are residential and commercial property funds a decent alternative to BTL, minus the leverage, but WITH more diversification?

(edit: and is there a low cost option or ETF?)

Surely the misery and social injustice, that allowing BTL to snap up FTB properties has caused, will convince any future government to tax capital gains at the same rate as income, a return to the system which operated under Margaret Thatcher's government. To stop it happening again.

I suspect IR will have to stay above their long term average of 5% for many years as well.

So no. [F@ck BTL]

A House should be home, not an investment.

There are a million other places to invest your money.

www.pricedout.org.uk

Hard working families and wage earners are being asked to pay more in tax than those who benefit from windfall gains from taking a punt in the housing market. More dangerously, it keeps in place the incentives for people to continue to take risky gambles in the housing market – doing little to address a key source of instability to the British economy
Edited by Dan1

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As per title

Are residential and commercial property funds a decent alternative to BTL, minus the leverage, but WITH more diversification?

(edit: and is there a low cost option or ETF?)

Possibly, in a cheaper and less desirable area but where there are, nevertheless, plenty of people who need to rent. I might do this in order to fund my continued renting for myself in an area where I personally want to live but can not see me ever being able to afford to buy. The other advantage of this strategy is that it means I will never have too high a mortgage and, as soon as one cheap property is paid for, I can safely take on another. Indeed, I already have enough money saved up to buy one and a half of these cheasper properties right now. However, I am hanging back for another year or so as I think there is another major leg down in prices on the cards.

As soon as I got to a point where the rental income coming in exceeded the rent I have to pay out myself for my own rented home, I could stop buying. The final advantage is that should I ever decide to wander off round the world (something I have a hankering to do), I don't need to worry about the personal psychological issues surrounding selling or renting my own home out. I can just give up the currently rented home and then get another one when I got back. I have family who would look after the other rented properties if I decided to go wandering.

None of the above is set in stone as a planned strategy. Just something I am mulling over.

Edited by tallguy

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There are a million other places to invest your money.

Property is a lousy place to invest, its main purpose seems to be to tie you down to allow maximum taxation. A millstone.

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I invest bet leveraged in IYR.

(it is a spreadbet of an index which is based on a collection of us reits and the like that make up that index....I don't think this is 'real world' at all - I'm really just betting on lines called 'IYR') :)

You are missing out on the yield, but at 3.4% you ain't missing much. Some of the largest stocks in that index are the apartment REITs such as Associated Estates and UDR which have invested in those large complexes in the US which make renting there so easy. Back in the late 90s during the Nasdaq blow out these REITs were yielding over 10%. What a great time that was to go against the herd.

I often wonder why REITs like that can't be set up in the UK to build massive rental only estates, but then I remember: draconian planning policy and a housing benefit system that almost guarantees claimants will make up most of the residents.

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You are missing out on the yield, but at 3.4% you ain't missing much. Some of the largest stocks in that index are the apartment REITs such as Associated Estates and UDR which have invested in those large complexes in the US which make renting there so easy. Back in the late 90s during the Nasdaq blow out these REITs were yielding over 10%. What a great time that was to go against the herd.

I often wonder why REITs like that can't be set up in the UK to build massive rental only estates, but then I remember: draconian planning policy and a housing benefit system that almost guarantees claimants will make up most of the residents.

I have read a few news articles on UK REITs over rexent years - I believe they were introduced or at least promoted with better tax brteaks about 5 years ago

I think it was a press release from Aviva or some other such financial company, that explained they did not get into REITs (having examined them) because the yield numbers did not stack up. This was another flag for the housing bubble back then - professional analysts weren't touching it.

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As per title

Are residential and commercial property funds a decent alternative to BTL, minus the leverage, but WITH more diversification?

(edit: and is there a low cost option or ETF?)

Nope, certainly not, no funds or BTL for us.

At our age we may have to access it (as bank of M&D for mortgaged children, both are in 'dodgy' public employment, one already being made redundant in March!)

Will we buy into the market again? (at the bottom), probably not, to much responsibility being a house owner. :P

Happy days.

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Nope. Years of stagnation at the bottom IMO. even then my money will all be in the house I buy to live in and keeping my mortgage to a minimum. And I'd never borrow to invest in anything. (not unless rental yields were 20% anyway)

+1

I will be buying a home, not to invest in, but to live in.

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You can't go wrong with that. I read somewhere that the builders are starting to build everything leasehold so everything eventaully reverts to them. In 1,000 years you could be ruling the entire country.

The Law

The Leasehold Reform Act 1967 gives leasehold tenants of houses the right to buy the freehold. In some cases they have an alternative right to extend the lease. The right to compulsorily purchase the freehold (and any intermediate leasehold interest) is termed enfranchisement. Some freeholders will sell the freehold without the need for a formal claim, but, whether a claim is made or not, the leaseholder should obtain good professional advice to find out roughly what the whole process will cost.

Because the basic right has been extended over the years by various amendments made to the 1967 Act, rules for calculating the price are somewhat complicated. The 1967 Act allowed the purchase of houses at a price which is similar to that at which the freeholder could have sold his interest to anyone else. The Housing Act 1974 extended the right to larger houses and provided that the freeholder and claimant should share the full increase in the value of the house when held on a freehold basis. The Leasehold Reform, Housing and Urban Development Act 1993 extended the right to another group of much larger houses and provided for the additional value to be shared in a different way. The Housing Act 1996 extended the rights further, the Commonhold and Leasehold Reform Act 2002 simplified qualification and provided additional rights.

It could be extended even further in the future.

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I think the question as posed in this thread is misleading.

The answers can largely be split into two camps...

1. I will not invest, it is morally wrong.

2. I will invest to increase supply.

Who has the moral high ground?

I think it is immoral to invest in property per se, but will keep my deposits in a mutual building society, to enable others access to the funds they require when house buying. It will not be a BS that makes BTL loans.

Is that neutral?

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I won't borrow to buy an property to rent out. If I have available case to buy outright then I'd consider it alongside any other option. There is nowt immoral about deciding to become a landlord, there is plenty immoral about borrowing to within an inch of your life driving up FTB property and pricing out genuine ftb into the bargain.

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That is worse than neutral.

If you use that money to build a new house that wouldn't otherwise be built then you increase supply. And you would be doing the dispossessed a great favour.

If you put money in the building society they do no such thing. They merely use it to pump even more credit into the existing housing stock making matters very much worse.

So yes, I'm afraid to say that putting your money in the building society makes you evil.

EDIT: Oh and Bsocs had huge BTL and sub prime arms. Including the beloved Nationwide.Don't believe their cuddly hype. 'Mutual' to them means they answer to no one but themselves.

What to do then? How does one "salt away" savings without the gamble of the equities market, buying yellow stuff or fuelling the property fiasco?

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  • 276 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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