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OLDFTB

Me Sir?

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Yes, thats right, i'm signing on for another 6 months. £700 PM for a smallish 2 Bed terraced with a conservatory & a parking space. A mortgage on a similar place in East Grinstead would be around £200 pm extra.

I have argued the logic with folks at work, the usual "Dead money" accusations thrown in my face, but i counter with the arguments so well loved on this board. Shuts them up sometimes.

I will buy eventually. I'll have a serious look at the market again from April next year. (If anything i'll probably buy in nearby Crawley as you get more "Bangs for your bucks").

If i have to wait another 6 months after that then so be it. I want a mortgage thats 3.5 x salary + deposit on a minimum 2 Bed place. Thats my limit.I'm not budging from that. I firmly believe, the way things are going, it will be within my grasp in the not too distant future. I am prepared to wait & make a substantial saving on purchase price & mortgage interest.

I nearly signed up for the Keyworkers Homebuy scheme earlier this year. Really pleased i didn't. Not often i get to make a key financial decision. I sleep well at nights knowing i did the right thing.

Everybodies situation is different but i have definitely joined in with the cause on this board:

Waiting until Property prices are fair & affordable once again.

Just thought i'd bore you all with that!

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It's been said on here before but those Key Workers deals are stupid and a rip off, the only one thats half decent was the £50k interest free equity loan, but even that's not worth it with these prices.

i made the same decision last year, pulled out of a key worker scheme, never looked back. They do do, key worker rental, it's worth looking into, it's assured tenency and the rent is cheaper than private.

Can I ask what you do?

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Raven: I am an Operating Dept Practitioner. We are state registered with the HPC now.

TTRTR: I am 47. Do you think i'm still too young for a mortgage mate?!!

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Nobodies too young for a mortgage.

Remember, you're servicing a mortgage already when you pay rent. Very few people escape this commitment in life.

He is only servicing part of a mortgage. His landlord pays the rest.

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Please, do we have to go into the details?

On very rare occasions, you would be correct. However, the reality for the vast majority of rentals is that the mortgage is serviced and the tenant also provides a return on the owners equity. A fair and equitable transaction. The owner requires a return on their capital, the tenant requires a place to live.

Edited by Time to raise the rents.

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Please, do we have to go into the details?

On very rare occasions, you would be correct. However, the reality for the vast majority of rentals is that the mortgage is serviced and the tenant also provides a return on the owners equity. A fair and equitable transaction. The owner requires a return on their capital, the tenant requires a place to live.

Yes, details do seem to screw things up for you. He just said he was paying 200 squid less than the cost of a mortgage!

Oh! I get it. You are banking on all that capital gains. ;)

Edited by gone west

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Based on hearsay.

Hear it from me that my tenants are paying my mortgages and a nice return on my capital.

:D

You and everyone else who bought before 2001. Most who bought in the last few years are subsidising their tenants rent and will see no capital gains for a few years yet.

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You and everyone else who bought before 2001. Most who bought in the last few years are subsidising their tenants rent and will see no capital gains for a few years yet.

Aye,and theres the rub.This point backs up the fact that most on here are basing their circumstances on todays situation, just like me. Yes i missed the boat in 2000/2001 (well..sort of.We bought in 1991 & fairly recently my ex got rid of me & paid me off with 30k to buy me out. Women these days...honestly!)

Now it's time to get my own place again, and, of course, HPI has accelerated prices beyond the reach of a decent buy. I don't want a pokey 1 Bed flat. I have 2 lovely kids who stay with me, so a garden and at least 2 Bedrooms are the order of the day.Yes, i could buy with another partner but i don't want to.

As for TTRTR comments i understand where he's coming from. Yes i am paying all or part of landlords rent, theres no getting away from that fact. But he takes all the risk, i save £200 PM. Only a temporary arrangement so in a way we are just using each other as a stepping stone. Me to home ownership with a nice sum for the deposit which means even less to borrow for a mortgage, him to capital gains in the very long term.

Prices will correct and i will have my day. Oh yes, i will have my day!

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Please, do we have to go into the details?

On very rare occasions, you would be correct. However, the reality for the vast majority of rentals is that the mortgage is serviced and the tenant also provides a return on the owners equity. A fair and equitable transaction. The owner requires a return on their capital, the tenant requires a place to live.

Not true TTRR there are vast quantities of unlet properties all over the UK. As you say in your end-piece on each post "only 1 in 6 landlords can't cover their costs with rents" but they are the ones who actually have tenants!!! So according to your data currently 16.67% of landlords are losing money through BTL. Add to that another 10% who may just be "washing their face" but are worried about the real prospect of capital loss and another 5% of unoccupied rental property (that is a conservative proportion in Leeds Manchester and Newcastle for example where the rate is more like 20% with new blocks going up every quarter adding to the unoccupied stock and depressing rents still further).

That means at least 30% of all BTL landlords are losing money or are about to.

I believe you may be insulated from the gathering storm by buying early or having good tenants but you will not be immune to a reduction in the capital value of your properties which of course means a rising yield. Small consolation for the guy trying to sell a property and so unable to market it for rental. Unfortunately he can't sell it because 12 other properties are for sale in the same block and they all keep undercutting each other to find that rare commodity - a buyer.

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Raven: I am an Operating Dept Practitioner. We are state registered with the HPC now.

TTRTR: I am 47. Do you think i'm still too young for a mortgage mate?!!

Out of interest what is the oldest that you can get a mortgage? Surely if you are going to be over 65 when the 25 years are up lenders may be more cautious?

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Out of interest what is the oldest that you can get a mortgage? Surely if you are going to be over 65 when the 25 years are up lenders may be more cautious?

I'm sure as long as you can pay it back before you retire it will be accepted. So if you are 55 and can pay pack within 10 years and they believe you can you should be able to get a mortgage of some amount.But i doubt they'd lend on 95% LTV. More like 70% or less i should think. I'll go for the heftiest deposit i can manage and pay the borrowed money over 15years. Should manage that ok.

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Please, do we have to go into the details?

On very rare occasions, you would be correct. However, the reality for the vast majority of rentals is that the mortgage is serviced and the tenant also provides a return on the owners equity. A fair and equitable transaction. The owner requires a return on their capital, the tenant requires a place to live.

I agree.. don't forget only a few BTL's have been bought at todays prices...

most were bought years ago...

Why are house prices so expensive...???

no reason...

what heppens when people can't support the loan...

House prices come down..

Its killing people.. feel like its killing me sometimes..

could the sickest mind dream of a slow enough screaming death for Gordon brown...?

I don't think so personally..

A labour party representive knocked on my mates parents door the other day.. He opened it.

The bloke made some comments about the labour party.. My mates reply.

along the lines of...

"I am a professional man in his thirties who lives at his parents... I think you had better go.."

Labour bloke made some comments... My mate screamed "Run,......" at him...

and he did. *****.. lol..

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"I agree.. don't forget only a few BTL's have been bought at todays prices...

most were bought years ago..."

Not sure about that. Literally thousands of these properties have been put up in the last 2 years and are still being built as we speak. There are 4500 2 bed flats under construction in Leeds alone with a further 4500 with planning permission.

Let's assume the BTL landlord generally obliged to put up 20% of the purchase price (although lenders in a desperate attempt to shore up the market are now lending 85 and even 90%) bought a 2 bed flat for £180k off plan 3 years ago (that was the price in Leeds for canalside yuppie flats). He has put up £36k and has a mortgage which is costing him approximately 8k per annum. He had a tenant for the first year who paid £1000 per month for 6 months then left. Unfortunately the situation was worsened by the fact that he was obliged to pay the utilities council tax etc for the remaining 6 months. The agency managed to get him another tenant but at only £750 per month. The agency takes 10% of that meaning the rent barely covers the mortgage. The tenant leaves after 6 months and the landlord subsequently discovers that a competing letting agent informed the tenant that they could rent an apartment in the same block for only £500 per month.

His property now has a "market" rent of 6k per annum. He approaches an estate agent with a view to selling instead. Estate agent informs him that normal yields on residential property are around 5%. Not brilliant at maths the landlord has a blinding flash of reality - "that means my £180k property is really only worth £120k!!". He finds this impossible to accept - surely property only ever goes up? He sits where he is. His mortgage is costing him 8k council tax and utilities another 2k. He is losing 10k per annum and has already (on paper) lost 60k. If he manages to sell at the same price that 2 beds are NOW selling for (150k) he will have lost over 50k on the exercise.

If instead of that he had simply invested 36k in a FTSE tracker 3 years ago he would now be sitting on 60k in lovely liquid cash.

Dont think I added stamp duty to the original cost either.

In his situation what would you do?

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In light of Paragon increasing their bad debt provision by over 30% and dismissing SIPPs as a possible underpin for BTL and Mervyn King alluding to higher IRs why would anybody currently buy a BTL? And if they aren't buying or renting them out.....

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Out of interest what is the oldest that you can get a mortgage? Surely if you are going to be over 65 when the 25 years are up lenders may be more cautious?

In theory, you can get a mortgage at any age.

UK might adopt the Japanese 100 year & generational mortgages? :)

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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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