Bland Unsight Posted June 24, 2017 Share Posted June 24, 2017 10 minutes ago, spyguy said: Delusional. LHA will determine the shitehole place. The £113.92/week will cover a £150k interest-only mortgage at 4%. If you went to 65% LTV and were paying 2% on the mortgage you'd receive the £6,000/year of rent and pay out £2,600/year of mortgage interest. Before all non-interest costs you'd believe you were seeing a return of £3,400/year on the £70k deposit - a (holds nose) 'gross yield' of 3% but you could convince yourself you were getting 5% on the £70k deposit (again, before costs, and don't forget all the Mad Gainz). No doubt once voids, rent arrears and the rest were factored in you'd probably be getting bugger all or even losing money, but on the superficial BTL maths it looks like a goer. Quote Link to comment Share on other sites More sharing options...
spyguy Posted June 24, 2017 Share Posted June 24, 2017 49 minutes ago, Bland Unsight said: The £113.92/week will cover a £150k interest-only mortgage at 4%. If you went to 65% LTV and were paying 2% on the mortgage you'd receive the £6,000/year of rent and pay out £2,600/year of mortgage interest. Before all non-interest costs you'd believe you were seeing a return of £3,400/year on the £70k deposit - a (holds nose) 'gross yield' of 3% but you could convince yourself you were getting 5% on the £70k deposit (again, before costs, and don't forget all the Mad Gainz). No doubt once voids, rent arrears and the rest were factored in you'd probably be getting bugger all or even losing money, but on the superficial BTL maths it looks like a goer. Sort of. Voids will ruin their returns. Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 24, 2017 Share Posted June 24, 2017 2 minutes ago, spyguy said: Sort of. Voids will ruin their returns. And opportunity cost on their deposit and time. Quote Link to comment Share on other sites More sharing options...
Neverwhere Posted June 24, 2017 Share Posted June 24, 2017 21 hours ago, Bland Unsight said: I like this bit: Quote It is almost ironic that those areas where sustained purchase demand for property is strongest, can also deliver some of the lowest yields, because yield and capital growth prospects tend to be inversely correlated. It's a chorale of stupid. It's not "almost ironic", it's just standard bubble maths. The rents respond to how many people want to live there and how much they earn. The prices respond to those things but they also respond to cheap UK mortgage finance (including from speculators) and also to other speculative flows from overseas (and to the cheap finance available to those overseas investors). As a result sales prices can get well ahead of rents. The same markets that see rampant capital gains as the bubble bubbles see the so-called "yields' (rent expressed as a percentage of price) getting crushed. The dumb as rocks nod to a quantitative approach "capital growth prospects tend to be inversely correlated" is also a bit silly as the key thing isn't the correlation, its the causation which underlies it, at which point I hand over to a big fan of the "almost ironic", Mr Xzibit. Quote Link to comment Share on other sites More sharing options...
Neverwhere Posted June 24, 2017 Share Posted June 24, 2017 The dumb as rocks nod to a quantitative approach strikes me as playing broadly the same role as "the science bit" in cosmetics adverts. Quote Link to comment Share on other sites More sharing options...
Pop321 Posted June 24, 2017 Share Posted June 24, 2017 9 hours ago, crashmonitor said: I'm becoming frankly amazed by the closing gap between urban house prices and those in rural areas driven entirely by renting potential. A decade ago the main determinant of a houses value was location, location, location. Now it's where the migrant, poor and benefit recipients might live (ie BTL fodder). I find this one incredible, on one of the worst streets in Chesterfield, which as a whole is a poor northern town.......... http://www.rightmove.co.uk/property-for-sale/property-48690021.html Meanwhile, 8 miles away in well heeled Matlock this detached house overlooking fields in a very desirable part of town is 10k less. 20 years ago the Chester Street property would have been a quarter of the price of High Ridge...seriously. This is the miracle and alchemy of BTL. http://www.rightmove.co.uk/property-for-sale/property-45209160.html I have seen this with commercial retail for decades. They purchase is yield rather than bricks and mortar....and it is incredibly high risk. I know a buyer who paid £130k for a shop (3 storey terrace) which was empty and next door (same footprint) had sold for £550k because Lloyds Pharmacy was in residence. 2 years later the £550k shop was empty and the chap who bought the £130k place had a McColls in situ. He then sold for close to £500k with McColls in place. The relevance to your post is that the examples you give are 'similar' in that people are NOW not looking at risk v's yield. A nice detached offers an exit strategy (ie sell to real people wanting a family home) so maybe a 6% yield is ok. But the HMO, split into units, multi let town centre building then a buyer should expect 25% yeild. It is amateurs using borrowed money (so the risk is not with money hard earnt) believing the only way is up....and are happy with any old return. When the HPC comes then these will plummet back to where they belong. Great spot, good example and thx for posting. Quote Link to comment Share on other sites More sharing options...
Wayward Posted June 24, 2017 Share Posted June 24, 2017 1 hour ago, Phil321 said: have seen this with commercial retail for decades. They purchase is yield rather than bricks and mortar....and it is incredibly high risk. I know a buyer who paid £130k for a shop (3 storey terrace) which was empty and next door (same footprint) had sold for £550k because Lloyds Pharmacy was in residence. 2 years later the £550k shop was empty and the chap who bought the £130k place had a McColls in situ. He then sold for close to £500k with McColls in place. yes the value is in the income stream...this depends on the lease length certainty(any breaks) and covenant strength. If the letting to mccolls had fallen through and the market weaker he could have ended up with a charity shop and a disaster... Quote Link to comment Share on other sites More sharing options...
spyguy Posted June 25, 2017 Share Posted June 25, 2017 9 hours ago, Wayward said: yes the value is in the income stream...this depends on the lease length certainty(any breaks) and covenant strength. If the letting to mccolls had fallen through and the market weaker he could have ended up with a charity shop and a disaster... I sort of follow commercial property demand. Outside ofthe main retail sectors, it looks like a total crap shoot. Basically, every quarter 4 oplaces shut, then 3 places open. The number of empty properties is slowly cranking up. There'sno way there's any pricing power by the LL. You can tell as shops moving building are getting pretty regular. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted June 25, 2017 Share Posted June 25, 2017 3 hours ago, hotairmail said: The advent of BTL has simply been another source of credit not previously available, which was then pumped into the housing market creating a large portion of the rises in prices and subsequent bubble return momentum chasing by numpties. As with all Ponzi's, those in at the start will have done extraordinarily well. The secret is whether one gets out with one's wealth intact well before the top and a slowdown in transactions as the window of opportunity slams shut. As Sir Isaac learned to his cost. Quote Link to comment Share on other sites More sharing options...
Dyson Fury Posted June 25, 2017 Share Posted June 25, 2017 This must be the TV programme that the 118ers hated the idea of: http://www.bbc.co.uk/programmes/b08wzwhq Wednesday 9pm on BBC1. Five one-hour episodes! Quote Link to comment Share on other sites More sharing options...
mrtickle Posted June 25, 2017 Share Posted June 25, 2017 1 hour ago, Dyson Fury said: This must be the TV programme that the 118ers hated the idea of: http://www.bbc.co.uk/programmes/b08wzwhq Wednesday 9pm on BBC1. Five one-hour episodes! Excellent! Thanks. Wasn't expecting to see it broadcast so soon. Series Link set! Quote Link to comment Share on other sites More sharing options...
Lavalas Posted June 25, 2017 Share Posted June 25, 2017 Story about it in the Guardian yesterday... https://www.theguardian.com/money/2017/jun/24/renting-property-landlords-tenants-bbc-series-buy-to-let Quote Link to comment Share on other sites More sharing options...
Pop321 Posted June 25, 2017 Share Posted June 25, 2017 11 hours ago, spyguy said: I sort of follow commercial property demand. Outside ofthe main retail sectors, it looks like a total crap shoot. Basically, every quarter 4 oplaces shut, then 3 places open. The number of empty properties is slowly cranking up. There'sno way there's any pricing power by the LL. You can tell as shops moving building are getting pretty regular. You are right. It's for institutional investors, pension funds...those who can afford to play the odds and take the rough with the smooth. The use averaging with hundreds (some with thousands) of properties And my point (re the thread) is that some of these HMO, student, city centre pods....feel very similar now to commercial. High values generated by a fluke of a high yield. For me it was always the fundamental of: 1) would I live there myself (or if I were single/old etc) 2) What would I pay, real money. Not based on borrowed never never ultra low interest rate other people's money. Buying yield is a whole different proposition. You can't flip, sell empty, sell to a family. It's high risk and these are going to collapse all the way back down to where they started at....we just need better yields elsewhere (outside property) and S24 to start kicking in. Then pop. Quote Link to comment Share on other sites More sharing options...
Byron Posted June 25, 2017 Share Posted June 25, 2017 Watching that programme with the smuggies, luvvies, self satisfied FILTHY, REVOLTING, SCUM that are landlords made my stomach turn. May they burn in hell. I hate, loathe, despise these absolute parasites. I am glad that the idiot Ros is writing angry letters, she is pulling these chancers on to the punch, and may it be a combined Tyson, Ali, Cooper one at that. In my heaven, the name GIDIOT will be much respected and adored. Quote Link to comment Share on other sites More sharing options...
mrtickle Posted June 25, 2017 Share Posted June 25, 2017 4 hours ago, Byron said: Watching that programme with the smuggies, luvvies, self satisfied FILTHY, REVOLTING, SCUM that are landlords made my stomach turn. May they burn in hell. I hate, loathe, despise these absolute parasites. I am glad that the idiot Ros is writing angry letters, she is pulling these chancers on to the punch, and may it be a combined Tyson, Ali, Cooper one at that. In my heaven, the name GIDIOT will be much respected and adored. Wow, and it hasn't even been broadcast yet Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted June 26, 2017 Share Posted June 26, 2017 15 hours ago, Lavalas said: Story about it in the Guardian yesterday... https://www.theguardian.com/money/2017/jun/24/renting-property-landlords-tenants-bbc-series-buy-to-let “Some people are saving for their first home. I’ve got 40.” Please, please, let these smug parasites lose their shirts! Quote Link to comment Share on other sites More sharing options...
spyguy Posted June 26, 2017 Share Posted June 26, 2017 15 hours ago, Lavalas said: Story about it in the Guardian yesterday... https://www.theguardian.com/money/2017/jun/24/renting-property-landlords-tenants-bbc-series-buy-to-let ' Michael, meanwhile, is 33 and regularly works long hours as a team leader at a Tesco store in Edmondsley, a village north of Durham. His rent and bills are £800 a month, equal to around 70% of his take-home pay. A window is broken, doors rotten, and rubbish from previous tenants is strewn outside, while inside the boiler piping is exposed. Though relatively young, single and hard-working he can rarely afford a night out. ' FFS. He should go and get a house share for ~300/month. Or just rent a smaller, better place. He lives in Durham FFS. He could move out of the city and get somewhere much much better. Quote Link to comment Share on other sites More sharing options...
iamnumerate Posted June 26, 2017 Share Posted June 26, 2017 3 minutes ago, spyguy said: ' Michael, meanwhile, is 33 and regularly works long hours as a team leader at a Tesco store in Edmondsley, a village north of Durham. His rent and bills are £800 a month, equal to around 70% of his take-home pay. A window is broken, doors rotten, and rubbish from previous tenants is strewn outside, while inside the boiler piping is exposed. Though relatively young, single and hard-working he can rarely afford a night out. ' FFS. He should go and get a house share for ~300/month. Or just rent a smaller, better place. He lives in Durham FFS. He could move out of the city and get somewhere much much better. Yes and no why should he live in a house share when someone who is a pro single mum in London would have much nice housing? Quote Link to comment Share on other sites More sharing options...
spyguy Posted June 26, 2017 Share Posted June 26, 2017 38 minutes ago, iamnumerate said: Yes and no why should he live in a house share when someone who is a pro single mum in London would have much nice housing? Oh, Ive no problem about putting all single parents into a shared barracks. With this particular case, it just seems nuts. There's lot s of much cheaper better rentals around Durham. Quote Link to comment Share on other sites More sharing options...
iamnumerate Posted June 26, 2017 Share Posted June 26, 2017 2 minutes ago, spyguy said: Oh, Ive no problem about putting all single parents into a shared barracks. With this particular case, it just seems nuts. There's lot s of much cheaper better rentals around Durham. Good points, although I am sure someone will come along and insult us for suggesting it. (I think they do something like that in Italy). Quote Link to comment Share on other sites More sharing options...
crazypabs Posted June 26, 2017 Share Posted June 26, 2017 Facebook Axe The Tenant Tax campaigners has lots of comments from landlords talking about selling up... https://m.facebook.com/?_rdr#!/story.php?story_fbid=1536507476392251&id=1077700412272962 Quote Link to comment Share on other sites More sharing options...
london_thirtythree Posted June 26, 2017 Share Posted June 26, 2017 24 minutes ago, crazypabs said: Facebook Axe The Tenant Tax campaigners has lots of comments from landlords talking about selling up... https://m.facebook.com/?_rdr#!/story.php?story_fbid=1536507476392251&id=1077700412272962 Warning! The level of entitlement on that thread may cause face palms and/or disbelieving head shakes. And the old chestnut of 'why not only apply this to new landlords' - which can be roughly translated to 'why not only apply this to people who are not me'. (heh - can only imagine if we took that approach to all taxation! Companies should all only ever pay the rate of Corporation Tax as per their year of incorporation; would be a fair level playing field and all that..) Quote Link to comment Share on other sites More sharing options...
mat109 Posted June 26, 2017 Share Posted June 26, 2017 34 minutes ago, crazypabs said: Facebook Axe The Tenant Tax campaigners has lots of comments from landlords talking about selling up... https://m.facebook.com/?_rdr#!/story.php?story_fbid=1536507476392251&id=1077700412272962 Selling to who? I predict years of plentiful rental supply, provided by the landlords in negative equity who couldnt get out fast enough. Falling rents thanks to the richest tenants buying. Quote Link to comment Share on other sites More sharing options...
london_thirtythree Posted June 26, 2017 Share Posted June 26, 2017 "I have evicted LHA tenants who have struggled to find alternative accommodation and bought a Villa in Spain because I can claim the mortgage relief on the villa as a holiday let? Thanks Phillip Hammond? Good move" PS. Dear Government, I would like you to help me by restoring my tax breaks. Quote Link to comment Share on other sites More sharing options...
Bland Unsight Posted June 26, 2017 Share Posted June 26, 2017 5 hours ago, crazypabs said: Facebook Axe The Tenant Tax campaigners has lots of comments from landlords talking about selling up... https://m.facebook.com/?_rdr#!/story.php?story_fbid=1536507476392251&id=1077700412272962 James Fraser is starting to sound a little less sanguine about the whole thing. Here's his comment on the Metro article Quote How idiotic can Shelter be? They campaign hard to get landlords forced out of business through extreme taxation then express surprise and start wailing like lunatics when landlords are forced to evict and sell as a result! THE single biggest threat to housing and eviction rates is the Shelter-supported 'Section 24'. If you want landlords to face taxes of 100%, or taxes on a loss, you can hardly be surprised when they exit the market, which usually means the family gets evicted. Grow some brain cells Shelter and start supporting the home providers - either that, or use your multi-million pound income to actually house someone yourself. These TenantTax/PovertyLater losers really don't like Shelter. Quote Link to comment Share on other sites More sharing options...
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