Sold To Rent

[Get me out of here!]

Hello all, my first post for a long long time.

To all you STR ers out there, do you still think you made the right decision?.. Surely prices are starting to rise over the 2004 peak!!

Property prices around me (Kendal, Cumbria) are stabalising, however SOLD SOLD SOLD signs everywhere, no sign of a crash around here........

[sign_of_the_times]

Hello all, my first post for a long long time.

To all you STR ers out there, do you still think you made the right decision?.. Surely prices are starting to rise over the 2004 peak!!

Property prices around me (Kendal, Cumbria) are stabalising, however SOLD SOLD SOLD signs everywhere, no sign of a crash around here........

has it taken that long for you to come up with such drivel ??

Edited May 19, 2006 by sign_of_the_times

[munimula]

Hello all, my first post for a long long time.

To all you STR ers out there, do you still think you made the right decision?.. Surely prices are starting to rise over the 2004 peak!!

Property prices around me (Kendal, Cumbria) are stabalising, however SOLD SOLD SOLD signs everywhere, no sign of a crash around here........

I think that the picture in the UK is extremely mixed.

From what I'm hearing in Bristol there is a lot of activity.

My parents house is on the market for 65% more than mid-2003 but that is a unique spot in cornwall.

However, my uncle told me of a friend that spent £170K buying and renovating a place in Devon and put it on the market for £190K only for it to sit there for months and next door (same house) has just sold for £135K.

Very mixed market.

One thing is for sure though that affordability constraints should be biting harder, in some areas they don't seem to be but I think if you analysed most of the buying going on you would probably determine that the buyers are taking big risks and stretching themselves too far. Will they be able to pay their mortgages in 2-3 years time? I think they'll struggle.

[cupidstunt]

I think my troll detectors gone off again!

Edited May 19, 2006 by cupidstunt

[Realistbear]

Yes. Although I STR it was because of a job move so I am a STM (sold to move).

I am in the West Midlands and the government figures show that detached dropped 8.2% in the last Q. I may have to move south to Surrey due to work and in Waverley District prices dropped 7%.

So was STR a good thing for those in these 2 areas? Just wait, the crash is in its very early stages and falls of 7-8% are just tasters.

Press say mini-boom is over and Nationwide are getting desperate warning people not to spend too much and offering loans to suprime borrowers. All the hallmarks of a crash I would say.

Mix in IR hikes now on the way and we have a wonderful STR environement--but if you still own you may be too late to beat the summer rush for the exits.

[crash 2005]

Hello all, my first post for a long long time.

To all you STR ers out there, do you still think you made the right decision?.. Surely prices are starting to rise over the 2004 peak!!

Property prices around me (Kendal, Cumbria) are stabalising, however SOLD SOLD SOLD signs everywhere, no sign of a crash around here........

NO REGRETS FOR ME

I sold my bellway home in Suffolk in August 2004

Can now buy the identical house on the same development for £10,000 less

[munimula]

Hello all, my first post for a long long time.

To all you STR ers out there, do you still think you made the right decision?.. Surely prices are starting to rise over the 2004 peak!!

Property prices around me (Kendal, Cumbria) are stabalising, however SOLD SOLD SOLD signs everywhere, no sign of a crash around here........

My parents are about to STR now.

They are definitely getting more money now than mid-2004

I think they could be timing the market perfectly - and the funny thing is - they aren't even trying to time the market, they just want to move but aren't sure where to go quite yet.

The interest they will get is more than my dad earns!!

[look to the past]

I lost out as a STR – my old house has definitely gone up over the last 2 years

Probably by about £10000

Rent paid so far £18000

Although houses in the area I am looking are only just starting to go up

But I will stay with it for a bit longer to see – if there is no start to the crash soon I will buy again at Xmas – so by that time I could be out of pocket by about £32000.

When we moved it did not seem worth my wife getting a job as we would be moving to a different area. So if we bought she would work which would mean we would be £10000 ish better of a year – which is an incentive to move and buy

[Father Fred]

I seriously considered selling my BTL a year or so back. Assuming I want to be in BTL long term I calculated (given current income, taper relief, costs etc) that I would have to see falls of 20% AND get my timing spot on to make it marginally beneficial to sell and buy back at the trough. Since then I have seen rises of 10% when I last checked in detail, and a little more in the last few months.

Clearly as an owner occupiier with lower costs STR is easier to justifier than a BTLer with tax implications, but in my area it would have been a terrible mistake then.

That's not to say it mightn't be a good idea now...

[laurejon]

My advice for anyone who is labouring hard to service a mortgage today is to offload it whilst the going is good. If you have been carefull, and not Mewed with the rises then maybe for comforts sake keep the house.

There are very few good financial reasons to hang on to property today, it has run its course.

But the facts are plain, and they are very real. Things are going to get tough, those who struggle to meet rates of 4.75% are in for a huge shock, and may well get to meet me as I view their property accompanied by the Baliffs.

Selling today, means you can pot the proceeds and return later to pick the cherries.

I lost out as a STR – my old house has definitely gone up over the last 2 years

Probably by about £10000

Rent paid so far £18000

Although houses in the area I am looking are only just starting to go up

But I will stay with it for a bit longer to see – if there is no start to the crash soon I will buy again at Xmas – so by that time I could be out of pocket by about £32000.

When we moved it did not seem worth my wife getting a job as we would be moving to a different area. So if we bought she would work which would mean we would be £10000 ish better of a year – which is an incentive to move and buy

10k will be chicken feed m8, imagine if you ended up 10k in arrears!! Selling two years ago was not a bad thing to do, for sure you could have held out for the extra 10k but what a gamble, as said many will not beat the exodus when it comes. BTW houses are for real selling fast, so if you are minded to jump off the ship now is the time to do it. Autumn it will be far too late, the world and his wife will know that its heading South, Pub talk will return to Visible Thongs and Football, not Houses and B&Q.

[Guest The_Oldie]

Without a doubt, I could buy now for less than I would have had to pay two years ago and am perfectly relaxed about the situation.

Had I bought last year, as I was considering had something come up at the right price, I would now be loosing sleep.

Houses are quick and easy to buy, if you have the cash in the bank, but not so easy to sell in a hurry.

[Realistbear]

I lost out as a STR – my old house has definitely gone up over the last 2 years

Probably by about £10000

Rent paid so far £18000

Although houses in the area I am looking are only just starting to go up

But I will stay with it for a bit longer to see – if there is no start to the crash soon I will buy again at Xmas – so by that time I could be out of pocket by about £32000.

When we moved it did not seem worth my wife getting a job as we would be moving to a different area. So if we bought she would work which would mean we would be £10000 ish better of a year – which is an incentive to move and buy

According to the government figures your area is seeing some nice falls:

http://news.bbc.co.uk/1/shared/spl/hi/in_d...l/region7.stm?d

Norfolk £215,691 -3.5% 0.2% 1339

Most of East Anglia is in red ink so your STR will soon be very profitable indeed.

Outside of Norfolk doing well also:

Cambridgeshire £197,085 -2.0% 1.6% 2373

Suffolk £176,077 -2.7%

So be encouraged--IR are just about to go up and bearish sentiment is everywhere--even the Nationwide issued a market warning today. The red ink is just going to spread as the days pass.

Edited May 19, 2006 by Realistbear

[munimula]

I seriously considered selling my BTL a year or so back. Assuming I want to be in BTL long term I calculated (given current income, taper relief, costs etc) that I would have to see falls of 20% AND get my timing spot on to make it marginally beneficial to sell and buy back at the trough. Since then I have seen rises of 10% when I last checked in detail, and a little more in the last few months.

Clearly as an owner occupiier with lower costs STR is easier to justifier than a BTLer with tax implications, but in my area it would have been a terrible mistake then.

That's not to say it mightn't be a good idea now...

Better to have got out a bit before the top of the market than to be trying to get out on the other side.

As a trader I'd always be happy with my decision to get out before the top than to miss the top and try to sell on the slide.

[look to the past]

Most of East Anglia is in red ink so your STR will soon be very profitable indeed.

3 – 6 months ago –that would be so- the government are so late on their reports

Looking to what is happening now – you can see them going up

We know what we could have bought last year – now it is just out of our price range

Things have moved recently – but I am still in some hope as I am in the best area for price reductions at the moment

[laughing_goat]

Hello all, my first post for a long long time.

To all you STR ers out there, do you still think you made the right decision?.. Surely prices are starting to rise over the 2004 peak!!

Property prices around me (Kendal, Cumbria) are stabalising, however SOLD SOLD SOLD signs everywhere, no sign of a crash around here........

Hi 'Get me out of here!',

I know what you mean and on the surface it can in some areas seem like a costly mistake to STR. The flat I sold at the end of 2003 and ones with an identical layout in the same block have been on the market in the last 12 months with a 20% price hike, so yes it does look like I've lost out. However, all is not lost, there are some points to consider;

1) None (and I mean not a single one) of these flats has sold (when I look on Nethouseprices, mine was the last to sell), some are still on the market, some vendors have given up and taken them off the market (a few have tried a few times to sell).

2) I put my STR fund into a combination of investments (bank, FTSE, gold, etc) some of which have risen at a greater rate than the housing market is 'perceived' to have done (even considering recent drops).

3) If I had been able to afford to move up the ladder (I couldn't, hence why I needed to STR), I would have had to pay aprox £10,000ish in stamp duty and solicitors fees, as I didn't, this money is making interest in the bank.

4) The rent I pay for the 3 bed house I live in is less that the interest I would pay on a mortgage had I bought it (this even takes into account the cash deposit I would pay).

Obviously this isn't the same for everyone, everywhere, but I live in Hertfordshire where HP's are supposedly rising. I see alot of asking price hikes, but very few SOLD signs to be honest.

I think you also forget that the majority of STR's do so out of nessecity rather than to speculate.

LG

[Father Fred]

Better to have got out a bit before the top of the market than to be trying to get out on the other side.

As a trader I'd always be happy with my decision to get out before the top than to miss the top and try to sell on the slide.

That still doesn't alter the fact that I need to be confident of 30% falls and perfect timing to get a 10% benefit.

If I'd sold "before the top" I would need 40% falls (whicfh I don't think will happen) to get the 10% benefit.

In the meantime I am taking the "MEW to the hilt while credit is available route". Pay net 1% for the privilege of holding cash that has been MEW'd and the cash is there to exploit oppounities as and when they arise, or pay off debt if that appears prudent.

[laughing_goat]

That still doesn't alter the fact that I need to be confident of 30% falls and perfect timing to get a 10% benefit.

If I'd sold "before the top" I would need 40% falls (whicfh I don't think will happen) to get the 10% benefit.

In the meantime I am taking the "MEW to the hilt while credit is available route". Pay net 1% for the privilege of holding cash that has been MEW'd and the cash is there to exploit oppounities as and when they arise, or pay off debt if that appears prudent.

I agree with Munimula that selling before the top of the market is a safer bet. You are more likely to sell at the price you ask for and in a shorter time period. If you found a buyer just before the market began to drop before you exchanged contracts you could have a buyer with cold feet on your hands.

I wonder how many BTLers think like you FF? It sounds like you have sat down and worked out the costs/profits etc. None of my BTL friends/colleges have done this at all, they all think it's just a case of...

Buy houses + Rent out = Profit

Rarely do they think about tax, periods without tennants, letting agent costs, the hassle, maintainance and most importantly the amount of time it takes to leave an investment.

This is why I would be put off by BTL, it's way too difficult to bail out. It all sounds like a nightmare, but good luck!

LG

Edited May 19, 2006 by laughing_goat

[keepwatching]

I lost out as a STR – my old house has definitely gone up over the last 2 years

Probably by about £10000

Rent paid so far £18000

Although houses in the area I am looking are only just starting to go up

But I will stay with it for a bit longer to see – if there is no start to the crash soon I will buy again at Xmas – so by that time I could be out of pocket by about £32000.

When we moved it did not seem worth my wife getting a job as we would be moving to a different area. So if we bought she would work which would mean we would be £10000 ish better of a year – which is an incentive to move and buy

I see why you are so misguided now, ( why are you paying £9000 a year in rent ?)

Fook the past....... Look forward to the future

[look to the past]

I see why you are so misguided now, ( why are you paying £9000 a year in rent ?)

£750 a month is about right – as far as I can see – quite a big house

I’m on a time limit (child to start school and don’t want to move him) so I have to buy within 2 years (wife will not rent again nomater what)

So unless the crash starts soon there’s no point for me

I'm not convinced. In Suffolk at least there has been no sign of a spring bounce this year. OK, some muppets put their houses on for 5% more than last year, but they're not selling (SSTC isn't good enough - they have to complete for it to count).

All I see is the property’s I like selling straight away (ish) definitely going up mainly in the bigger towns – and don’t think a 0.25% IR raise will do a thing

[laurejon]

But surely you can see that to buy now would put you amongst the flock. Look at any potential descending market and there are a high volume of takers who just dropped in at the last moment. They are lifes losers, they can be seen anywhere propping up a bar near you. "If only" "Should Have" "Could Have" well its not good enough.

You made your move, stick with it, the final hour approaches, the cat is out of the bag. A long time coming but innevitable all the same.

Edited May 19, 2006 by laurejon

[Shamus]

We STM 12 months ago from a nice part of S Gloucestershire. Similar property on the market for the same asking price now.

Problem is we have moved to a more expensive area to live and it will mean saving around £30k extra before we buy again (to be in the same type of property).

[laurejon]

We STM 12 months ago from a nice part of S Gloucestershire. Similar property on the market for the same asking price now.

Problem is we have moved to a more expensive area to live and it will mean saving around £30k extra before we buy again (to be in the same type of property).

Maybe, but unlikely, when the rates go up local properties will come down.

You could easily find yourself in a much better property let alone a like for like in a few years time with an even smaller mortgage than you had 12 months ago.

Property is today the worst investment, renting is for sure the better option despite the pitfulls and vagaries.

Owners subsidising you to live in their property, has to be a good deal.

When that metric changes, its time to buy.

[Catch22]

Hello all, my first post for a long long time.

To all you STR ers out there, do you still think you made the right decision?.. Surely prices are starting to rise over the 2004 peak!!

Property prices around me (Kendal, Cumbria) are stabalising, however SOLD SOLD SOLD signs everywhere, no sign of a crash around here........

STR'ed March 2005, renting same value property for less than 7k and the sale cash is on deposit earning +12k. A house costing the same money on a Interest Only Mortgage @ 5.5% would cost just short of 14k to rent off the bank, plus insurance, repairs and maintenance costs on top.

I still see houses on the market that were up for sale same time as ours, I see a lot of agent swopping, and I'm also seeing houses going SSTC only to comeback on the market a fortnight, a month, three months later.

Housing bubbles take time to unwind, its the nature of the beast. But the fact is if it don't unwind a "market" will cease to exist, hence it has to unwind. Ignore the mugs getting sucked in because agents have ratched up asking prices, that's because they know nobody pays asking anymore. And forget the bottom of the market stuff selling. That's just a combination of frustrated FTB'ers and late BTL'ers being sucked into the slaughterhouse. Indeed I'm keeping tabs on one that failed to sell after being on the market for a year at 180K. it was pulled from the market pre Xmas, and back on with a new agent 3 months back for 190k, still no offers. Indeed I watched another house that I would consider was a good buy at todays over inflated prices, eventually go SSTC three weeks ago after being on the market a year. But alas there it is back in the paper today sporting a For Sale sign, I see that happening every week now.

This time last year the market was dead, hence rates were cut, and there was talk of rates being cut even more. But now rates are rising worldwide, Chairman of the Fed warns about house prices, Merv of the BOE warns again about house prices. Unemployment is raising, energy costs are raising, affordability is the problem, hence it has only one way to go. The writing is on the wall if you chose not to read it, fine.

Hows this for a reality check, somebody at my wifes place of work is off on holiday and she asked the wife to post some bills for her whilst she is away for three weeks. Why did she not post them herself, well most proberbly she needs her and her husbands wages to go into the bank end of the month before the cheques are presented. There are four envelopes sat on our worktop, one is the rates, and the other three are addressed to Credit Card companies .....do I need to draw you a diagram?

Her neigbour has been trying to sell her house for well over a year now without success, said they wanted to release some equity. Her advice was if you want to realise some equity, do like they did ...Mortgage Equity Release.........that was then followed by the extension loan [and some] ......... ..........All this money released and still having to juggle every month to make I dare say "minimum payments" on the Credit Cards........ still need that diagram ?

Edited May 19, 2006 by Catch22

[laurejon]

I dont think we need a diagram, the picture is clear in our minds eye.

We see a couple bending over with both Gordon and Tony standing directly behind them.

[Without_a_Paddle]

Hows this for a reality check, somebody at my wifes place of work is off on holiday and she asked the wife to post some bills for her whilst she is away for three weeks. Why did she not post them herself, well most proberbly she needs her and her husbands wages to go into the bank end of the month before the cheques are presented. There are four envelopes sat on our worktop, one is the rates, and the other three are addressed to Credit Card companies .....do I need to draw you a diagram?

Cashflow is tighter when you are off on holiday. Holidays cost money before you depart and also cost money during the 3 weeks.

Maybe some of it has been paid for on a credit card(s).

Your example of a 'reality check' is not that good in other words.