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rantnrave

Brings A Tear To The Eye

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Reduced to just £45 above the 2004 price they paid...

Is that supposed to be good?

Place failed to sell at the auction I went to a couple of weeks back. Best bid was £175k, which I thought fair value. Last sold in 2004 for £238k.

Agent hinted (before the auction) it might come up for rent if unsold at auction!

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Is that supposed to be good?

It's not even great value at this reduced price. When I saw what they had dropped it to, I thought 'here's a vendor who has had to start smelling the coffee'. So much for prices doubling every seven years etc.

Of course, vendors outside the SE who do get a buyer are settling for an average of something like 92% of asking price. In this case, that's another 15K off as well, which would equate to prices around 2003 in my neck of the woods.

Who knows the story behind this though? Trying to get back what they paid suggests the owners haven't been MEWing their way round the world. No way of telling if they deserve a haircut through poor financial planning or otherwise.

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Separate question, if anyone knows the answer...

Have been watching one bought in 2007 (ouch) go under the last sold price Rightmove mentions. They've now changed EA, dropped the price again and it appears as a new listing - no mention of the last sold price now though. Does changing EA mean that data about the previous selling price disappears? I can see why they wouldn't want the information so prominently displayed, but do they have a choice in that?

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Reduced to just £45 above the 2004 price they paid...

I thought house prices were insane by 2001, let alone 2004

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I thought house prices were insane by 2001, let alone 2004

Agreed. What are 2001 prices in real terms now (am aware that salaries aren't rising to meet that at the moment but that hasn't been the case for the whole of the last ten years).

Anyway, I think this is a sign of the fear that's out there.

Edited by rantnrave

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Reduced to just £45 above the 2004 price they paid

'Keen to sell' .............. 'Motivated sellers'..................'Reduced to sell' .................. 'Desperate to sell' .............. 'Please buy' ................. 'HELP'

Edited by grey shark

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'Keen to sell' .............. 'Motivated sellers'..................'Reduced to sell' .................. 'Desperate to sell' .............. 'Please buy' ................. 'HELP'

You should offer your writing skills to EAs. This is much better and closer to the truth than the usual tripe.

Have also just noticed another property in the same area that was last bought about around the same time and is now on for over 50% more. Fat chance.

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Reduced to just £45 above the 2004 price they paid...

Close by me - just noticed on Rightmove biggrin.gif

Offers in Region of £179,995

Price reduced in the last 3 days3 bedroom detached house

Last available sold price: £179,950 29 Oct 2004

Not a lot of 3 bed properties to rent in Oswestry, Rightmove has just three of them, but the monthly rental seems to be about £550 per month, or £6,600 per year.

So this would give a gross yield of 3.7%. Not enough to tempt a BTL buyer outside of the South East, but if and when the price drops below £160k it'll start to feature on the radar of BTL landlords, and at £150k it will definitely be in BTL territory.

I'm not saying that makes BTL right or even smart, but that's just the way it is today.

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Not a lot of 3 bed properties to rent in Oswestry, Rightmove has just three of them, but the monthly rental seems to be about £550 per month, or £6,600 per year.

So this would give a gross yield of 3.7%. Not enough to tempt a BTL buyer outside of the South East, but if and when the price drops below £160k it'll start to feature on the radar of BTL landlords, and at £150k it will definitely be in BTL territory.

I'm not saying that makes BTL right or even smart, but that's just the way it is today.

Interesting analysis - thanks!

With no uni nearby and a very small college, rentals are rare indeed. We did a viewing with two other families at the same time on one property last year. We are currently renting a 2.5 bedroom for just under 500 pcm, so seems about right.

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I'm not saying that makes BTL right or even smart, but that's just the way it is today.

£150k to get 4% return (gross) is the way it WAS :). The only environment that made such returns acceptable was the bubblelicious ponzinomics naughties where HPI was added to returns and passed off as debt servicing income (what a joke that one was).

The airheads that 'invested' on these numbers will not be able to borrow money anymore because the banks know the odds of getting their money back will be too low / virtually non existant in a normal economy. The process is slower than I'd like but it is happening now.

Income driven, sustainable BTL investors will need at least double that return. So £75k is a more realistic target.

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Not a lot of 3 bed properties to rent in Oswestry, Rightmove has just three of them, but the monthly rental seems to be about £550 per month, or £6,600 per year.

So this would give a gross yield of 3.7%. Not enough to tempt a BTL buyer outside of the South East, but if and when the price drops below £160k it'll start to feature on the radar of BTL landlords, and at £150k it will definitely be in BTL territory.

I'm not saying that makes BTL right or even smart, but that's just the way it is today.

a sign of the times that even at 160k that is a poor yield in general asset terms, but popular sentiment is still so in favour of BTL that poor yields are accepted. In the ened, even amateurs will catch on, over a very long period of time, AFAICT.

(pre-bubble real terms yields on BTL would require a place rented at 550pcm to be priced c. £90,000 to give a fair return in line with other markets)

Edited by Si1

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£150k to get 4% return (gross) is the way it WAS :).

Putting my dunce's hat on, 4% after BTL mortgage repayments looks poor given void periods, maintenance and the fact that even in this low IR environment you can get a similar deal on a five year bond. Heck, I'm getting 3% (below inflation, I know) in an instant-access unlimited-withdrawl online saver. Am I missing something here?

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Agreed. What are 2001 prices in real terms now (am aware that salaries aren't rising to meet that at the moment but that hasn't been the case for the whole of the last ten years).

Anyway, I think this is a sign of the fear that's out there.

I suppose if you work on 3% P.A, compounded up you need to add about 35% to 2001 prices.I don't think that makes current prices much different from then.I have seen 2002 somewhere as a real terms comparison.A reason why I don't think any falls above a further 10% are likely.

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Putting my dunce's hat on, 4% after BTL mortgage repayments looks poor given void periods, maintenance and the fact that even in this low IR environment you can get a similar deal on a five year bond. Heck, I'm getting 3% (below inflation, I know) in an instant-access unlimited-withdrawl online saver. Am I missing something here?

No, you've got the right idea. 4% will pay the interest on the mortgage, after that you've got to start paying for voids, maintenance etc. 2% per year average is one optimistic assessment IIRC. You're into serious negative returns territory already. Once you got there you have to start thinking about doing the 'investing' bit, which is actually putting some capital in. Over 25 years I think you have to put something like 3-5% in (?). Then there's the actual return bit, when you invest capital you are supposed to get something in return? Some investment!

All this worked only because EAs and fund managers pushed the myth that returns should be calculated by incorporating HPI. Thousands of gullible amateurs fell for it and now carry an enormous inventory that generates negative returns and that they can't sell for fear of collapsing the market.

The last ten years were an experiment in absurdity.

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No, you've got the right idea. 4% will pay the interest on the mortgage, after that you've got to start paying for voids, maintenance etc. 2% per year average is one optimistic assessment IIRC. You're into serious negative returns territory already. Once you got there you have to start thinking about doing the 'investing' bit, which is actually putting some capital in. Over 25 years I think you have to put something like 3-5% in (?). Then there's the actual return bit, when you invest capital you are supposed to get something in return? Some investment!

All this worked only because EAs and fund managers pushed the myth that returns should be calculated by incorporating HPI. Thousands of gullible amateurs fell for it and now carry an enormous inventory that generates negative returns and that they can't sell for fear of collapsing the market.

The last ten years were an experiment in absurdity.

What you haven't added in is that there is no tax, losses and payments are usually tax deductable and the government encouraged it all by making them pension vehicles too. All of that enticed amateurs with incredible imaginations to invest.

Take a gamble, be willing to lose it all I say.

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Reduced to just £45 above the 2004 price they paid...

Close by me - just noticed on Rightmove biggrin.gif

Offers in Region of £179,995

Price reduced in the last 3 days3 bedroom detached house

Last available sold price: £179,950 29 Oct 2004

Well, they say property prices only go up. £45 in 7 years in this case.

(And let's see what it actually sells for...)

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My eyesight must be getting bad, when I first scrolled down I thought you'd posted a picture of a ladies fanjita.

+1 not just you :)

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Reduced to just £45 above the 2004 price they paid...

Close by me - just noticed on Rightmove biggrin.gif

Offers in Region of £179,995

Price reduced in the last 3 days3 bedroom detached house

Last available sold price: £179,950 29 Oct 2004

Not bad. Around here, Sussex, only small terraces have similar asking prices.

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  • 312 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% +
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      • Even
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      • up 5%



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