interestrateripoff Posted October 19, 2015 Share Posted October 19, 2015 http://www.theguardian.com/money/2015/oct/19/first-time-buyers-face-prices-almost-10-higher-than-year-ago-buy-to-let-investors First-time buyers are facing asking prices almost 10% higher than a year ago because of demand from buy-to-let investors, the website Rightmove has said. The average asking price for homes coming on to the market has risen by 5.6% over the past year to a new high of £296,549, the property website said on Monday, but sellers of typical first-time-buyer homes are asking 9.6% more than 12 months ago. The average asking price of houses and flats with up to two bedrooms has increased by more than £8,000 to £184,676, it said, making it increasingly difficult for first-time buyers to build up a deposit. Rightmove said such buyers were facingcompetition from buy-to-let investors, and that a shortage of property coming on to the market was adding to their difficulties. It added that the number of first-time properties coming up for sale was 8% down on October 2014, and would-be homeowners needed to win over “the hearts, minds and pockets of sellers”. Great news, larger deposits needed so the recovery is here the economy is booming.... Quote Link to comment Share on other sites More sharing options...
Damik Posted October 19, 2015 Share Posted October 19, 2015 http://www.theguardian.com/money/2015/oct/19/first-time-buyers-face-prices-almost-10-higher-than-year-ago-buy-to-let-investors Great news, larger deposits needed so the recovery is here the economy is booming.... this is not true; government says we are in deflation; needs to slash IRs ... Quote Link to comment Share on other sites More sharing options...
pipllman Posted October 19, 2015 Share Posted October 19, 2015 Here is a link to the original rightmove report http://www.rightmove.co.uk/news/house-price-index/october-2015 Some of the language in the headlines is, imo, the sort of stuff that Osborne and his ilk could pounce on (my bold) Highest ever national average price of property coming to market, up by 0.6% (+£1,715) this month to £296,549 - and 5.6% more expensive than a year ago New record fuelled by high demand for first-time-buyer properties, with prices up 4.9% on last month and 9.6% (+£16,105) over the past 12 months Vicious circle as high tenant demand leads buy-to-let investors to go head-to-head with first-time buyers: Many letting agents report ‘same-day’ rentals and little or no property to rent Number of first-time-buyer properties (two bedrooms or fewer) coming to market down by 8% on same period a year ago, exacerbated by first-time sellers struggling with second-step price gap Rightmove advises first-time buyers how to get on a level playing field versus landlords by winning over the hearts, minds and pockets of sellers Quote Link to comment Share on other sites More sharing options...
renting til I die Posted October 19, 2015 Share Posted October 19, 2015 (edited) Indeed. I really noticed the deflation when my rent jumped 15% at the start of the year! But, I believe the bananas I buy are 2p cheaper per kg, so, swings and roundabouts! Edited October 19, 2015 by renting til I die Quote Link to comment Share on other sites More sharing options...
Guest_growlers_* Posted October 19, 2015 Share Posted October 19, 2015 (edited) Here is a link to the original rightmove report http://www.rightmove.co.uk/news/house-price-index/october-2015 Some of the language in the headlines is, imo, the sort of stuff that Osborne and his ilk could pounce on (my bold) Highest ever national average price of property coming to market, up by 0.6% (+£1,715) this month to £296,549 - and 5.6% more expensive than a year ago New record fuelled by high demand for first-time-buyer properties, with prices up 4.9% on last month and 9.6% (+£16,105) over the past 12 months Vicious circle as high tenant demand leads buy-to-let investors to go head-to-head with first-time buyers: Many letting agents report ‘same-day’ rentals and little or no property to rent Number of first-time-buyer properties (two bedrooms or fewer) coming to market down by 8% on same period a year ago, exacerbated by first-time sellers struggling with second-step price gap Rightmove advises first-time buyers how to get on a level playing field versus landlords by winning over the hearts, minds and pockets of sellers what a load of crap. Their whole index is a joke. Shortage of rentals? Surely a quick use of their website would demonstrate that there are plenty of rentals everywhere. Head to head with BTLers? Really, the areas I am monitoring I'm seeing a pick up of obvious BTL disposals. FTBs are obvious the target of this piece: Your rental situation is ******ed, you need to beg and accept what ever crap you can get your hands on, prices are rising, don't miss out. FTBs are probably in / about to come into the strongest position they have been in years as BTL morons off load. Edited October 19, 2015 by growlers Quote Link to comment Share on other sites More sharing options...
Neverwhere Posted October 19, 2015 Share Posted October 19, 2015 (edited) Here is a link to the original rightmove report http://www.rightmove.co.uk/news/house-price-index/october-2015 Some of the language in the headlines is, imo, the sort of stuff that Osborne and his ilk could pounce on (my bold) Highest ever national average price of property coming to market, up by 0.6% (+£1,715) this month to £296,549 - and 5.6% more expensive than a year ago New record fuelled by high demand for first-time-buyer properties, with prices up 4.9% on last month and 9.6% (+£16,105) over the past 12 months Vicious circle as high tenant demand leads buy-to-let investors to go head-to-head with first-time buyers: Many letting agents report ‘same-day’ rentals and little or no property to rent Number of first-time-buyer properties (two bedrooms or fewer) coming to market down by 8% on same period a year ago, exacerbated by first-time sellers struggling with second-step price gap Rightmove advises first-time buyers how to get on a level playing field versus landlords by winning over the hearts, minds and pockets of sellers Hilariously The Telegraph have chosen to cover this under the heading First-time buyer demand boosts house prices to record highs, although the main body of the article does go on to say "Rightmove said that the higher costs faced by first-time buyers were symptomatic of a shortage of small properties, and increased demand from buy-to-let landlords . . . Competition between budding first-time home purchasers and landlords had created a “vicious circle”, the property website said." before pushing on with the propaganda about how people prefer renting nowadays. Obviously they have failed to make the rather obvious connection that it's the investors pricing prospective first-time buyers out of the market that is creating the high tenant demand Edited October 19, 2015 by Neverwhere Quote Link to comment Share on other sites More sharing options...
zugzwang Posted October 19, 2015 Share Posted October 19, 2015 High demand from FTBs? Not at these prices. More like zero demand from FTBs even with Mr Austerity's sundry handouts. Quote Link to comment Share on other sites More sharing options...
Timak Posted October 19, 2015 Share Posted October 19, 2015 I have to worry about the sanity of some buy-to-letters. House directly in front of mine sold for £335k. With various fees I'll call that £345k. They then put in new windows and refitted the kitchen - so I'll add a conservative £360k all in. It is currently listed for rent for £1200 a month rental. They are renting through an agency who charge 10%. So they'll get £1080 a month. So in a best case scenario of it being rented out 100% of the time they'll get £12960 a year. A yield against total price of 3.6% Except the problem is no house around here has broken £1k a month (£900 after agency fees) so they'll be lucky to be taking home 3% I can't see how they could possibly be covering any sort of BTL mortgage on those figures. So it must be a cash investor buying because they believe prices will rise. That isn't an investment, that is speculation and shows we are in a bubble. Quote Link to comment Share on other sites More sharing options...
PopGun Posted October 19, 2015 Share Posted October 19, 2015 The supply/demand anchor was abandoned years ago, landlords would rather leave properties empty than tempt tenants with lower rents. Artificially keeping 'market' rates high. Gluts of city centre flats in every city centre, not a single one will smash the price floor, no matter how long empty. Quote Link to comment Share on other sites More sharing options...
VeryMeanReversion Posted October 19, 2015 Share Posted October 19, 2015 So it must be a cash investor buying because they believe prices will rise. That isn't an investment, that is speculation and shows we are in a bubble. ....or preservation of capital for those that distrust financial services. Many people have experience of being financially ripped off. Few have had their house stolen or remember the last HPC. Quote Link to comment Share on other sites More sharing options...
nnails Posted October 19, 2015 Share Posted October 19, 2015 ....or preservation of capital for those that distrust financial services. Many people have experience of being financially ripped off. Few have had their house stolen or remember the last HPC. I brough my house the begining of year and one of the reason was that i could not trust banks or bank of england any longer. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted October 19, 2015 Share Posted October 19, 2015 Indeed. I really noticed the deflation when my rent jumped 15% at the start of the year! But, I believe the bananas I buy are 2p cheaper per kg, so, swings and roundabouts! I can only speak as I find but.... When I first started renting in 2006 I was paying £915 pcm today I'm paying £950. Three different houses over that period: 1st £915 for 1 year, 2nd between £895 & £920 for 6 years, current £950 for 2 years (fixed for a 3rd year). All three houses have been a similar size and in roughly the same geographical area. Quote Link to comment Share on other sites More sharing options...
thewig Posted October 19, 2015 Share Posted October 19, 2015 The supply/demand anchor was abandoned years ago, landlords would rather leave properties empty than tempt tenants with lower rents. Artificially keeping 'market' rates high. Gluts of city centre flats in every city centre, not a single one will smash the price floor, no matter how long empty. Not sure I believe this - I could somehow understand this if the landlord was a big firm who budgeted for a set rent and allowed for a % void which works across a large portfolio. For individual/small levaraged landlords though voids are the devil surely. Quote Link to comment Share on other sites More sharing options...
Guest Posted October 19, 2015 Share Posted October 19, 2015 Not sure I believe this - I could somehow understand this if the landlord was a big firm who budgeted for a set rent and allowed for a % void which works across a large portfolio. For individual/small levaraged landlords though voids are the devil surely. Most small landlords don't treat it as a business that gives a 'return'. Instead they are looking to obtain a free extra house. Buy house. Get tenant in to pay mortgage. 25 years later either you own outright, or HPI has gifted you £x of free equity. All on the backs of your tenants - no need to lift a finger. This kind of landlord will happily cover voids with their own money. Until the situation gets so bad that they themselves are forced into bankruptcy it doesn't matter how bad the figures look, they'll hang on to their 'asset' at all costs. Forget looking at the fundamentals - an obsession with monopolizing other people's living space is the motivator. Quote Link to comment Share on other sites More sharing options...
pipllman Posted October 19, 2015 Share Posted October 19, 2015 Most small landlords don't treat it as a business that gives a 'return'. Instead they are looking to obtain a free extra house. Buy house. Get tenant in to pay mortgage. 25 years later either you own outright, or HPI has gifted you £x of free equity. All on the backs of your tenants - no need to lift a finger. This kind of landlord will happily cover voids with their own money. Until the situation gets so bad that they themselves are forced into bankruptcy it doesn't matter how bad the figures look, they'll hang on to their 'asset' at all costs. Forget looking at the fundamentals - an obsession with monopolizing other people's living space is the motivator. I can even show you real life examples of LLs that, even when the property is let, don't cover the cost of the debt interest with the rental income I have heard this very sentence more than once "I only have to put £75 a month into it and, by the time the mortgage is due to be repaid, it will be worth at least triple what I paid for it" Quote Link to comment Share on other sites More sharing options...
winkie Posted October 19, 2015 Share Posted October 19, 2015 I know people that have made a choice between investing in their children's education/school fees or investing in a property for each of them...... Quote Link to comment Share on other sites More sharing options...
pipllman Posted October 19, 2015 Share Posted October 19, 2015 I know people that have made a choice between investing in their children's education/school fees or investing in a property for each of them...... I have often wondered on a similar question Private school fees (day) around here are about £2800 per term. Take 14 years of that = £117,600 Would an 18 year old be better to leave a private school with nothing, or a state school with £117,600 (+ compounded interest etc.) ? Quote Link to comment Share on other sites More sharing options...
Venger Posted October 19, 2015 Share Posted October 19, 2015 The supply/demand anchor was abandoned years ago, landlords would rather leave properties empty than tempt tenants with lower rents. Artificially keeping 'market' rates high. Gluts of city centre flats in every city centre, not a single one will smash the price floor, no matter how long empty. Many not in PopGun world. Suddenly a bit more active on the main forum now it appears there could be housing market weakness ahead? Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted October 19, 2015 Share Posted October 19, 2015 I have often wondered on a similar question Private school fees (day) around here are about £2800 per term. Take 14 years of that = £117,600 Would an 18 year old be better to leave a private school with nothing, or a state school with £117,600 (+ compounded interest etc.) ? Difficult to say. I went to private school and hated it, spent my whole time there waiting to leave which I did on my 15th birthday and never looked back. We sent our kids to decent state schools, which they loved, and all three have good degrees and well paid jobs. Quote Link to comment Share on other sites More sharing options...
pipllman Posted October 19, 2015 Share Posted October 19, 2015 Difficult to say. I went to private school and hated it, spent my whole time there waiting to leave which I did on my 15th birthday and never looked back. We sent our kids to decent state schools, which they loved, and all three have good degrees and well paid jobs. but did you invest the money you could have spent on fees and give it to them on A level results day? that is what I have mulled over is an 18 year old getting a better start in life from the private school or from having a state education and £117,600 (+ compound interest etc) dropped in her bin Quote Link to comment Share on other sites More sharing options...
Guest_growlers_* Posted October 19, 2015 Share Posted October 19, 2015 but did you invest the money you could have spent on fees and give it to them on A level results day? that is what I have mulled over is an 18 year old getting a better start in life from the private school or from having a state education and £117,600 (+ compound interest etc) dropped in her bin It totally depends upon the child, the family and the schools in question. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted October 19, 2015 Share Posted October 19, 2015 but did you invest the money you could have spent on fees and give it to them on A level results day? that is what I have mulled over is an 18 year old getting a better start in life from the private school or from having a state education and £117,600 (+ compound interest etc) dropped in her bin No, it wasn't necessary, they are quite capable of taking care of themselves and I take pride in having brought them up to be self sufficient. But, they will get the loot when we kick the bucket. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted October 19, 2015 Author Share Posted October 19, 2015 I have to worry about the sanity of some buy-to-letters. House directly in front of mine sold for £335k. With various fees I'll call that £345k. They then put in new windows and refitted the kitchen - so I'll add a conservative £360k all in. It is currently listed for rent for £1200 a month rental. They are renting through an agency who charge 10%. So they'll get £1080 a month. So in a best case scenario of it being rented out 100% of the time they'll get £12960 a year. A yield against total price of 3.6% Except the problem is no house around here has broken £1k a month (£900 after agency fees) so they'll be lucky to be taking home 3% I can't see how they could possibly be covering any sort of BTL mortgage on those figures. So it must be a cash investor buying because they believe prices will rise. That isn't an investment, that is speculation and shows we are in a bubble. Or perhaps they are assuming ultimate the rents will keep going up??? Eventually giving a profit along with the capital appreciation of house prices going up? Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted October 19, 2015 Share Posted October 19, 2015 buy, buy now, before you miss out. you can rent it out and make a fortune. buy now. worst kind of advertising. it should be banned. any mention of the 30 to 50% of listingqs dropping in price every week? thought not. Quote Link to comment Share on other sites More sharing options...
Venger Posted October 19, 2015 Share Posted October 19, 2015 I owe advertising my living. Lay it on thick too. People choose to buy. If you want to award innocence for house buyers paying these prices, do so. Even for BTLers? Maybe we can have another bailout and 7 years more HPI afterwards? You only have to look at the asking prices. If people want to buy at these prices, they should be allowed to, and take ownership of their own market decisions, without the HPC-Victim-Hunters claiming 'lack of education' / 'too much homes under the hammer' / 'Didn't know what they were doing' / 'Flipper has been misold.' buy, buy now, before you miss out. you can rent it out and make a fortune.buy now.worst kind of advertising.it should be banned.any mention of the 30 to 50% of listingqs dropping in price every week?thought not. Quote Link to comment Share on other sites More sharing options...
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