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Matador

Ftb Asking Why Str?

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This is my first post!

I have been lurking on this site for about 1 month, I have been interested in the housing market for the last 18 months (Im currently saving a deposit) previously i was getting info from other sources such as ft, economist, guardian, times, hoemtrack and rightmove.

Since I have been on this site I have noticed the STR's seem extremely critical of BTL's!

IMO the above two groups are both speculators and gambling on house prices; the simple difference being that one group WANTS prices to rise and the other to fall???

STR's: Isn't your principal place of residence a home more than an investment????

I'm trying to understand your mindset as i can understand someone wanting to BTL but not gamble their home!

PS: I want prices to drop so I too can get on the property ladder but I want to know what I'm up against :D:o

Regards

Matador

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This is my first post!

I have been lurking on this site for about 1 month, I have been interested in the housing market for the last 18 months (Im currently saving a deposit) previously i was getting info from other sources such as ft, economist, guardian, times, hoemtrack and rightmove.

Since I have been on this site I have noticed the STR's seem extremely critical of BTL's!

IMO the above two groups are both speculators and gambling on house prices; the simple difference being that one group WANTS prices to rise and the other to fall???

STR's: Isn't your principal place of residence a home more than an investment????

I'm trying to understand your mindset as i can understand someone wanting to BTL but not gamble their home!

PS: I want prices to drop so I too can get on the property ladder but I want to know what I'm up against :D:o

Regards

Matador

There are enormous amounts of money to be made when you STR. If you sell the average home at the top (or near) of the market at, say 225,000k and place that sum in a safe Building Society account at 5% you have a gross income of 937 pounds a month--more than enough to rent a home worth twice the amount you sold yours for. I did just that due to a job move and am renting a 450k home for 750 pounds a month.

At the same time house prices are falling. Thats a double source of income assuming the STR will jump back into the market after the carnage has reduced home prices to a mere shadow of their former selves.

Some STR because they are in over their heads on house payments and have no confidence in the house market. Best to get out while you can mentality--or face bankruptcy.

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Guest X-QUORK

We sold our first house in July as we needed a bit more space for our new family addition (due in 5 weeks...gulp!). When we first decided to sell back in May we had every intention of buying again, but after weeks of looking and only finding utter crap for our £165k budget we decided to try renting for a bit. We now rent a lovely three bed cottage in rural Oxfordshire for £695 a month (the landlady was trying to flog at £217k but gave up after four months without any serious takers).

At some point in the interim I discovered HPC and realised that we'd inadvertantly become STR speculators. We'll sit tight for a while and see how things pan out over the next 12 months or so. We're certainly in no rush to get into negative equity territory.

To go back to your question though, I think there are some similarities between BTL and STR, but ours was not so much driven by speculation as convenience in the first instance.

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To me, home is where you make it. Having been an expat in different countries for abnout 10 years, and having to live in a place that wasn't mine, I didn't worry. If I wanted to put up pictures I did, with a promise to make good afterwards if necessary. (pale toothpaste is an excellent filler for pin holes in the light coloured walls.)

I can quite empathise with STRs, as it will give them a better home for their cash than being homeowners at present, IMHO. Similarly, when the market tanks, they will be better placed to buy a better house than they just sold. So if they need an extra bedroom, or want to move to a better area, or want to get into tthe catchment area for better schools, STRing can be the way to go. Me, I own my 4 bedroom pile in one of London's leafier suburbs, the mortgage is a quid cos I then don't need to move the house deeds, and can't be bothered with the palaver of STRing.

CASG (Chacun a son gout)

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I STR'd in late 2000 because I needed some money to persue a new career in a new location, plus I thought since my house had more than doubled in value since I bought it 5 years previous, it surely wouldn't go up any more.... (okay I was wrong, it went up another 50%, but I have a much better job now & I'm happier)

I would love to just move into a house and not be concerned about its value, but external pressures mean that many of us forget that a home is a home, and we just see it as an investment that we must check the value of every few months.

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Happen to be a str by accident, bought a house in a new area in 2002.

Within a year I hated the house & the area, someone offered me £100k more than I paid, so I snatched their arm off.

Decided to rent before I commit next time, and hey presto here I am in rented. It's irrelevant to me whether the house is worth more or less now, as I wouldn't have it back at any price.

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Happen to be a str by accident, bought a house in a new area in 2002.

Within a year I hated the house & the area, someone offered me £100k more than I paid, so I snatched their arm off.

Decided to rent before I commit next time, and hey presto here I am in rented. It's irrelevant to me whether the house is worth more or less now, as I wouldn't have it back at any price.

I'm in the same boat as you mate. I was in a total sh*te area and was extremely depressed. I was getting double the price of what i purchased for, so I sold in aug 2004, which for the north was a bit early, but hey who knows what will happen next.

Anyway I'm renting and I'm pleased to say that I'm much happier than I was and have been building an even bigger deposit for my next property. :)

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This is my first post!

I have been lurking on this site for about 1 month, I have been interested in the housing market for the last 18 months (Im currently saving a deposit) previously i was getting info from other sources such as ft, economist, guardian, times, hoemtrack and rightmove.

Since I have been on this site I have noticed the STR's seem extremely critical of BTL's!

IMO the above two groups are both speculators and gambling on house prices; the simple difference being that one group WANTS prices to rise and the other to fall???

STR's: Isn't your principal place of residence a home more than an investment????

I'm trying to understand your mindset as i can understand someone wanting to BTL but not gamble their home!

PS: I want prices to drop so I too can get on the property ladder but I want to know what I'm up against :D:o

Regards

Matador

Hi Matador and Welcome,

I STRed by accident. I put my studio flat on the market and was offered the asking price 4 days later. I accepted it and went hunting for new flat (with bedroom) but was struggling to find anything I was happy with. In the meantime Mr Goat (boyfriend) asked me to move in with him :wub: He was renting a cheap house so we thought it would be best for me to move in there and see how it went, rather than buy a house and find 6 months down the line that we couldn't stand each other. Anyway, that was almost 2 years ago and we are still together :wub: , but are unable to afford to buy anything more than a 2 bed terrace with no parking. A few months ago, we moved to a new rental house, as we realised we would be renting for at least a few more years and we needed somewhere nicer to live.

I definately see a house as a home and not an investment but investment or not I refuse to pay these silly prices, so I will carry on renting until I either need to buy or I am satisfied that prices are reasonable.

I also think there is an important difference between STR and BTL you didn't mention. STR has cost me nothing as my rent minus the interest I make from having over £X amount in the bank is alot less than the interest I would pay on a mortgage for the house I live in. Many (not all) BTL speculators take out huge loans to gamble on the housing market, I wonder how many people would take out a loan of £100,000+ to gamble on the stock market?

LG

Edited by laughing_goat

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Firstly, thank you all for replying to my first post on HPC!

Secondly, thanks for giving me your reasons for STR.

The majority of you seem to be STR for reasons other than profit making (ie: not liking your property) and through rising prices have decided to carry on renting (rightly i think B) ).

Well I guess there is a difference between BTL and STR, I also dont know anyone who would borrow £100,00 to gamble on stock market - thanks laughing :lol: goat!

So now the question is......when do you STR's plan on entering the market and are you tempted to enter soon???

Regards

Matador

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Firstly, thank you all for replying to my first post on HPC!

Secondly, thanks for giving me your reasons for STR.

The majority of you seem to be STR for reasons other than profit making (ie: not liking your property) and through rising prices have decided to carry on renting (rightly i think B) ).

Well I guess there is a difference between BTL and STR, I also dont know anyone who would borrow £100,00 to gamble on stock market - thanks laughing :lol: goat!

So now the question is......when do you STR's plan on entering the market and are you tempted to enter soon???

Regards

Matador

In Summer 2004 I was living in central London where I owned a 2bed flat. Then my job relocated to the US. I didn't want to buy in the US, so the choice for me was become a BTL landlord or STR. Having only bought in spring '02 I did not have a big cushion against negative equity, I had about 55k equity, after having put about 10k and many weekends of DIY in to do it up. Furthermore the flat was leasehold ex-council place which means the local authority interferes a lot with the maintenance (in a potentially very costly way). Covering the repayments with the rental income would have been marginal at best. Unsurprising since after all, I had not bought it as an investment. And after doing a bit of research on the state of the economy, I thought the risk to the capital value was pretty serious. Found HPC.co.uk by typing "house price crash" into Google while I was still weighing up the decision.

Flat was sold within 2 1/2 weeks, price agreed was 5k off asking. Very glad I sold, I think I might have caught the top of the market... we'll see

Now saving madly for a bigger deposit. Planning to buy back in to the UK market around mid-2008.

frugalista

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This is my first post!

I have been lurking on this site for about 1 month, I have been interested in the housing market for the last 18 months (Im currently saving a deposit) previously i was getting info from other sources such as ft, economist, guardian, times, hoemtrack and rightmove.

Since I have been on this site I have noticed the STR's seem extremely critical of BTL's!

IMO the above two groups are both speculators and gambling on house prices; the simple difference being that one group WANTS prices to rise and the other to fall???

STR's: Isn't your principal place of residence a home more than an investment????

I'm trying to understand your mindset as i can understand someone wanting to BTL but not gamble their home!

PS: I want prices to drop so I too can get on the property ladder but I want to know what I'm up against :D:o

Regards

Matador

We STR'd because we were sinking into debt and realized that it would be better to sell and rent. Now we're debt free, more or less, and have the bank PAY US every month, what with rising rates on MMF's and CDs. I've now borrowed about 30K US dollars interest-free, yes, 0% interest (Credit score is everything!) and put it into a 3.9% savings deposit. It won't make us rich, but it helps.

We live in a much better area and rent a MUCH better house than we lived in before. My children attend MUCH better schools. The neighbors are much more considerate.

I sold the old homestead knowing that the market was hot at the time, and that we wouldn't have to fix up the old wreck. What a relief! BTW, hope this helps. Mileage may vary.

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Happen to be a str by accident, bought a house in a new area in 2002.

Within a year I hated the house & the area, someone offered me £100k more than I paid, so I snatched their arm off.

Decided to rent before I commit next time, and hey presto here I am in rented. It's irrelevant to me whether the house is worth more or less now, as I wouldn't have it back at any price.

undefined
We decided to rent for a while , but only in order to be "chainless"when we decided to buy. Coordinating two deals can be extremely frustrating, as many well know. After we sold, I found this site and "www.thehousingbubble2.blogspot.com", but I don't remember how or when. It must have been sometime in the early spring.

Now that we're enjoying the pleasures of renting, I will only reluctantly buy again. We couldn't care less about granite countertops!

BTW, how does one get one's comment öut of the box? Help! I'm trapped! :)

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...

So now the question is......when do you STR's plan on entering the market and are you tempted to enter soon???

While we all accpet that prices are falling, calling the bottom is a little more tricky. Some will brave it out and wait for the average prices to hit 3x income, or even lower. Others will jump in when they themselves can afford it. I won't even start looking until it is generally accepted that houses are a bad investment! ;)

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So now the question is......when do you STR's plan on entering the market and are you tempted to enter soon???

Regards

Matador

To respond to both of your posts (and welcome to the boards BTW).

Although I live in Australia there may well be people in my situation in the UK.

When I sold to rent, profit was the reason but not the only reason. The main reason was that I may well be moving in the next year or so, and thought it would be a good idea to sell at a time (early 2004) when there were eager buyers (and when I judged prices were high).

Circumstances have changed since then, but I don't feel any pressure to buy back in because prices are still flat here, and based on past cycles you usually get a year or so's warning before prices start upwards again.

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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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