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Over the last month I've heard this from 2 friends of mine:

The only way they can afford to buy a house is if they do it as a BTL and rent somewhere. Apparently the bank regard affordability as the amount of rent offset against the mortgage!

What's more worrying is my friends are not run of the mill sheeple, they are intelligent, often cynical people. However, it looks like the latest VI onslaught has worn them down - apparently, house prices are on the up again - my mother told me yesterday!

Anyway back to the point. I pointed out to them that if they didn't get any rent for whatever reason they would have to pay their mortgage plus their rent. Also, I can't actually see that the rent would cover the mortgage.

Point is though it has got to the state where people are actually considering this. Maybe it isn't a bad thing - it's kind of like building an extra layer onto the house of cards - it's only going to bring on economic ruin quicker!

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In My opinion, a bit of a silly thing to do now, considering the potential for a crash, but I was seriously considering this a few years ago. Back then, house prices were a little more affordable, but the house I wanted was still not affordable to me (call me greedy, but its difficult moving from a nice rented 3 bed semi in a nice area to a 1/2 bed terraced (owened) in a not so nice area!)

Anyway, the way I saw it was if I could buy a smaller house and rent it out I could continue renting my current house (which i like) and be on the property ladder at the same time.

In hindsight, it would have been a good time to do just that, but other events took over and I never persued it.

I certainly wouldn't do it now! maybe in 5-6 years* when prices bottom out!

Stuart

* it might be 1-10 years, but I will be ready with my deposit when it eventually happens.

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I have heard of something similar. I can see benefits to being able to buy, but is it right? i.e. you cannot afford to buy a house to live in based on your salary, but you can do it if you BTL as your ability to borrow is not controlled by other criteria and by other peoples salary due to their ability to pay the amount of rent asked ...

This has provoked this thought ... As a market price is influenced by the price that the customers in the market feel it is worth/able to pay, then could this therefore mean that Housing Market runs the risk of no longer being influenced by Market theory ... i.e. a FTB could only buy if they went down the BTL route - implying that the lending is being biased towards BTL modes ... and as a result the Market price is no longer arrived at by all customers in the Market because lending institutions are controlling the lending down the BTL route.

Therefore if the Housing Market is no longer a market, what does this do to all the Market theory (Supply and Demand, etc) ...

I am not an expert in these things, so do I even make sense? Any thoughts?

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I was going to buy a place to rent out so I could move into it it at a later date when I could afford to, but the deposit required was waaaaaaaaaaaaay beyond what I could afford. I've also considered buying somewhere to do as a holiday let in a location that I would love to retire to. The theory behind this is that by retirement age the mortgage would be paid off and I could go an live there, selling my own home (assuming I ever manage to buy one) to give me a lump sum and, if necessary, something towards paying off the holiday home. Of course, these are plans to be executed after the correction has happened, not now.

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This is madness, once you take away the initial subsidised rate, BTL mortgages are far more expensive than OO mortgages, by up to a massive 2% in some cases. Also, as a starter BTL, you normally have to provide a bigger deposit than as a normal FTB. One myth debunked yesterday, a few more to go.

http://firstrung.co.uk/articles.asp?pageid...articlekey=1785

I have heard of something similar. I can see benefits to being able to buy, but is it right? i.e. you cannot afford to buy a house to live in based on your salary, but you can do it if you BTL as your ability to borrow is not controlled by other criteria and by other peoples salary due to their ability to pay the amount of rent asked ...

This has provoked this thought ... As a market price is influenced by the price that the customers in the market feel it is worth/able to pay, then could this therefore mean that Housing Market runs the risk of no longer being influenced by Market theory ... i.e. a FTB could only buy if they went down the BTL route - implying that the lending is being biased towards BTL modes ... and as a result the Market price is no longer arrived at by all customers in the Market because lending institutions are controlling the lending down the BTL route.

Therefore if the Housing Market is no longer a market, what does this do to all the Market theory (Supply and Demand, etc) ...

I am not an expert in these things, so do I even make sense? Any thoughts?

Rather than BTL why not max yourself to the eye balls and rent out rooms? "Same difference" as my 4 year old says :D

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a friend of the girlfriend, taken in by dreams of being an easy-money property magnate, bought a N London HMO around 18months ago. This was his first purchase.

Obviously, it is a crudhole. He has been plagued by voids and misbehaving tenants and, even fully let, is cashflow negative. He has taken a second job and remains living at his inlaws.

Publicly, he still zealously enthuses about his investment and shows nary a tinge of regret.

I thought that, given the proliferation of trolled anecdotals of late, I should disclose my own - very real - anecdotal story of the current state of things.

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Over the last month I've heard this from 2 friends of mine:

The only way they can afford to buy a house is if they do it as a BTL and rent somewhere. Apparently the bank regard affordability as the amount of rent offset against the mortgage!

What's more worrying is my friends are not run of the mill sheeple, they are intelligent, often cynical people. However, it looks like the latest VI onslaught has worn them down - apparently, house prices are on the up again - my mother told me yesterday!

Anyway back to the point. I pointed out to them that if they didn't get any rent for whatever reason they would have to pay their mortgage plus their rent. Also, I can't actually see that the rent would cover the mortgage.

Point is though it has got to the state where people are actually considering this. Maybe it isn't a bad thing - it's kind of like building an extra layer onto the house of cards - it's only going to bring on economic ruin quicker!

Have to say it's something we're considered - waiting another few months to see which way the global economy is heading.

If IR's continue to rise, and the market over-rules any possible manouvering that Brown/Bernake may attempt in order to placate housing markets/economy, then we'll stay renting, till prices crash.

But, if it's clear that US & UK are going to succeed in inflating their way out, and UK is heading for hyperinflation/stagflation it's an option were thinking about.

In this case it seems me & partner have 2 options:

1. Buy a £200k place [on a 10 yr fix that hyperinflation will erode away] - though £200k will only buy a tiny small terrace that needs doing up, then 'move up ladder' which necessitates moving several times, which could be tricky on a 10 yr fix.

2. Stay where we are, renting a fantastic long-term house, and buy BTL, and even if prices fall, and eventually rise again over a longer timeframe, we'd have [paid for] property in 15 years time, with all benefits of being 'on the ladder', but the flexibility of being able to move if we need.

Inflation is definitely out of the bag, and hopefully this global multi-market bubble will bust, with the ensuing HPC, but if it doesnt it's something we might consider.

But then this idea could be a load of crap that Ive not thought through properly, so please critisise at will! :blink:

Edited by jp1

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Quite a good plan by a friend of mine was to buy a 4 bed house then let out three of the rooms at £300 PCM each, which covered the mortgage.

Cheeky sod even charged his gf to live there! :lol:

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Quite a good plan by a friend of mine was to buy a 4 bed house then let out three of the rooms at £300 PCM each, which covered the mortgage.

Cheeky sod even charged his gf to live there!

what a country....

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Quite a good plan by a friend of mine was to buy a 4 bed house then let out three of the rooms at £300 PCM each, which covered the mortgage.

Cheeky sod even charged his gf to live there! :lol:

Well, he won't be the first person to make a few sacrifices to get started on the property ladder. Credit where it's due.

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Quite a good plan by a friend of mine was to buy a 4 bed house then let out three of the rooms at £300 PCM each, which covered the mortgage.

Cheeky sod even charged his gf to live there! :lol:

Not sure whether that says more about your mate.......or his irlfriend :blink:

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Not sure whether that says more about your mate.......or his irlfriend :blink:

To be fair she actually started out as a tennant there.

Think he bought in 2002 so prices were a bit more affordable, also I think the drive by shootings pushed prices down a bit.

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  • 337 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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