Which Landlord Is Subsidising Their Tenants The Most

[Bobbins]

I'm looking to rent a 3 bedder in Kingston-upon-Thames. This one is let, but the going rate to buy this is £500k. Interest payments alone on £500k at 5.25% is £2,190 pcm. This ones being let for £1,400 pcm!!!

http://www.findaproperty.com/displayprop.a...p;agentid=02533

On top of that they'll be paying 12% to the EA, covering all the maintenance costs and void periods. In fact I reckon the landlord is subsidising the tenants to the tune of £1,000 pcm. The gross yield a meagre 3.4%.

Anyone beat that out there in hpc-land.

p.s. Sometimes I feel I lose my faith in HPC, but then when I look at something like this, I realise property's eventually going to go to rat sh1t.

[Guest The_Oldie]

Yeah, I can beat that, I'm paying £900pm for a house currently valued at £350K+ .

I think that some people here are getting even better deals though.

[Smokeandmirrors]

Could be a certain Mr Blair.........not known for his astute dealings in the property game.

http://www.timesonline.co.uk/article/0,,17129-2351974.html

[aceparts]

Sorry, I'm the winner - I pay £120 p/m for a ground floor mansion apartment valued at £300K +

Complete with double garage etc.

Downside is service charge of £380 p/m making a grand total of £500.

[Golden Shower]

So how much did the landlords pay for the houses? Is the yield poor or are they actually making a loss?

[Rachman]

It would be, except the sale prices on that road tend to be mid £300s

http://www.houseprices.co.uk/e.php?q=chatham+road+kingston+

So especially if they bought it a few years ago, the return is not that bad (although yield if caclulated on current 'asking price' is poor.

Gross yield is nearer 4.8% at 350K.... - if they paid £200K for it a few years ago, they are quids in and can sit back and watch for long term capital appreciation (note, the long bit) - myself, I'd cash out, but other people have bigger balls/are more reckless than I.

Oh and what HPI - these were £275K in 2000 - 30% appreciation in 6 years ain't much - this is why prices won't fall much in these areas - try a similar house in say Bolton - the semis are up from £125K to £280K....... - so where's the biggest price bubble - oh yes, it's in London.... [ I used to own on this street so know it well - you can discount the detached, they are not the same size at all, but the semis are about right and it's a smilar area to that part of Kingston]

http://www.houseprices.co.uk/e.php?q=alber...bolton&n=10

Edited September 19, 2006 by Rachman

[Bingley Bloke]

My mate rents out his £250K one-bed apartment in Islington for £800/month.

[Badger]

I'm looking to rent a 3 bedder in Kingston-upon-Thames. This one is let, but the going rate to buy this is £500k. Interest payments alone on £500k at 5.25% is £2,190 pcm. This ones being let for £1,400 pcm!!!

http://www.findaproperty.com/displayprop.a...p;agentid=02533

On top of that they'll be paying 12% to the EA, covering all the maintenance costs and void periods. In fact I reckon the landlord is subsidising the tenants to the tune of £1,000 pcm. The gross yield a meagre 3.4%.

Anyone beat that out there in hpc-land.

p.s. Sometimes I feel I lose my faith in HPC, but then when I look at something like this, I realise property's eventually going to go to rat sh1t.

Unless it was bought pre-boom, or with a substantial deposit, or its owned outright by the LL etc. etc.

[Bear Goggles]

We're paying 700pcm for a house 'worth' in excess of 300k (identical one on street went for 340k last year). However our landlady is not strictly subsidising us as she inherited the house with no mortgage. (opportunity loss is not a term she's familiar with)

The sums don't add up for BTL in many areas, however the reality is that in this county many renters are stuck on 6 month leases with crappy MFI funiture and poor decor. Having recently returned from visiting Germany and seen the quality of housing people on modest income enjoy there, I can only describe the situation here as a housing crisis of huge proportions.

[no accountant]

Anyone beat that out there in hpc-land.

Can't beat that, but rent a 375k flat for £1,300 a month, which is 4.1% yield on current asset value.

If this speculative boom is to continue, all properties will have be brought and sold at these high prices, so even though people say "it's ok because he brought it for £4k in 1960" - in order for these prices to be maintained it needs to be sold at this price. And who's going to buy it eactly? If you do buy at this price you'll haemorrhage cash.

[Golden Shower]

It would be, except the sale prices on that road tend to be mid £300s

http://www.houseprices.co.uk/e.php?q=chatham+road+kingston+

So especially if they bought it a few years ago, the return is not that bad (although yield if caclulated on current 'asking price' is poor.

Gross yield is nearer 4.8% at 350K.... - if they paid £200K for it a few years ago, they are quids in and can sit back and watch for long term capital appreciation (note, the long bit) - myself, I'd cash out, but other people have bigger balls/are more reckless than I.

Oh and what HPI - these were £275K in 2000 - 30% appreciation in 6 years ain't much - this is why prices won't fall much in these areas - try a similar house in say Bolton - the semis are up from £125K to £280K....... - so where's the biggest price bubble - oh yes, it's in London.... [ I used to own on this street so know it well - you can discount the detached, they are not the same size at all, but the semis are about right and it's a smilar area to that part of Kingston]

http://www.houseprices.co.uk/e.php?q=alber...bolton&n=10

Yes a poor yield. The thing that makes me wonder is that many people don't seem too bothered about the yield simply because they are making the mortgage payments because they bought long ago.

[halip66]

I rent a 4 bed detatched house just outside Padstow for £470 pcm with sea views, 5 minutes from the beach.

Ours is a bit scruffy but similar houses in the village go for around 500k.

Our landlord bought pre boom, sadly he died 2 years ago & it has been in probate ever since with no sign of it getting resolved. Now paying rent to his wife.

[jpidding]

I'm looking to rent a 3 bedder in Kingston-upon-Thames. This one is let, but the going rate to buy this is £500k. Interest payments alone on £500k at 5.25% is £2,190 pcm. This ones being let for £1,400 pcm!!!

http://www.findaproperty.com/displayprop.a...p;agentid=02533

On top of that they'll be paying 12% to the EA, covering all the maintenance costs and void periods. In fact I reckon the landlord is subsidising the tenants to the tune of £1,000 pcm. The gross yield a meagre 3.4%.

Anyone beat that out there in hpc-land.

p.s. Sometimes I feel I lose my faith in HPC, but then when I look at something like this, I realise property's eventually going to go to rat sh1t.

Good thread Bobbins.

My mate rents out a house that he claims is worth £375k for a grand a month. Thats a 3.2% gross yield. The place is in Coventry FFS! Under normal circumstances and taking local wages into account, I'd say it was still a little over-valued at half this price.

[gilf]

Anyone beat that out there in hpc-land.

p.s. Sometimes I feel I lose my faith in HPC, but then when I look at something like this, I realise property's eventually going to go to rat sh1t.

As others have said it really depends when the property was purchased. It does illustrate that BTL isn't viable at current prices but it certainly doesn't mean there are thousands of landlords paying half thier tennants rent for them.

[The_Equalizer]

Northern Ireland has bargains galore...

The girlfriend and I are paying £600/month including rates fully furnished 3-bed new build valued at £250K. This is in South Belfast. Excluding rates that's a yield of 2.88%, or 2.4% including rates. Landlady living in dear old Blighty with her new job and bought when the house probably cost half this. By the way this is common across the whole of NI.

[Rachman]

Northern Ireland has bargains galore...

The girlfriend and I are paying £600/month including rates fully furnished 3-bed new build valued at £250K. This is in South Belfast. Excluding rates that's a yield of 2.88%, or 2.4% including rates. Landlady living in dear old Blighty with her new job and bought when the house probably cost half this. By the way this is common across the whole of NI.

that'll be the Republic's money and the public sector jobs that are funding that boom then. Seriously, where are the high paying money generating jobs to fund it ?

[jp1]

£1200 p/m for a £600k 3 bed grade II listed house with big garden?

[The_Equalizer]

that'll be the Republic's money and the public sector jobs that are funding that boom then. Seriously, where are the high paying money generating jobs to fund it ?

As with every place there are a few high paying jobs, but the average I've read about various from about £20K - £24K. Speculation is still a fever pitch. The girlfriend is desperate to buy put on a stupidly high offer which was accepted only for the vendor to pull out. The vendor has now (2 months later) put it back on the market with another £35K on the asking price. However, they've received no offers since.

I've been a bear for so long that I'm past caring looking stupid. I've yet to meet anyone who can explain the how the absurdly high prices are going to be supported long term. Instead I'm happy with my deposit and no problem renting.

[iamnumerate]

I knew someone who was paying a couple of years ago £250 pcm for a 250-300 K flat. However the landlord was the council so not a big surprise.

Although bearing in mind that one day she can use this to get a discount to buy, she is definetly the winner.

[dalek]

On top of that they'll be paying 12% to the EA, covering all the maintenance costs and void periods. In fact I reckon the landlord is subsidising the tenants to the tune of £1,000 pcm. The gross yield a meagre 3.4%.

I received a phone call from an estate agent yesterday, and we had a chat about the housing market - I'd contacted them for a valuation a year ago, when I lost my job, but after two nerve-wracking months, managed to find regular work again and decided I could stay put.

I mentioned btls pushing up prices where I live in East Dulwich, London, and he said: 'We're seeing very little of those nowadays.'

Incidentally, he reminded me he'd valued my flat (a slum bought for £77,000 eight years ago; I've since done a lot of work on it) at £210,000 at the time (Sept 2005) and wanted to tell me I'd get 'at least' £250,000 for it now. How on earth can this be! In just ONE year, it's shot up £40,000!?? It's truly gone bonkers now. Watch it collapse like a pack of cards...

[eric pebble]

I'm looking to rent a 3 bedder in Kingston-upon-Thames. This one is let, but the going rate to buy this is £500k. Interest payments alone on £500k at 5.25% is £2,190 pcm. This ones being let for £1,400 pcm!!!

http://www.findaproperty.com/displayprop.a...p;agentid=02533

On top of that they'll be paying 12% to the EA, covering all the maintenance costs and void periods. In fact I reckon the landlord is subsidising the tenants to the tune of £1,000 pcm. The gross yield a meagre 3.4%.

Anyone beat that out there in hpc-land.

p.s. Sometimes I feel I lose my faith in HPC, but then when I look at something like this, I realise property's eventually going to go to rat sh1t.

I know 3 people with BTL flats in London area who are loosing between £100 and £350 pm. Also - friend and his family renting a farmhouse near Witley, Oxon for £780pm; landlord paid off mortgage years ago - so he's not worried. But at todays "prices" - rent would have to be more than double to just cover interest only..... This shows how sad it all is out there....

[MarkG]

As others have said it really depends when the property was purchased.

No it doesn't.

If you bought a house for a fiver, it's now worth 500k, prices are static and you rent it out for a fiver a year, you're not making a 100% yield. In fact you're making a huge loss compared to selling and sticking the money in a deposit account.

[Rachman]

No it doesn't.

If you bought a house for a fiver, it's now worth 500k, prices are static and you rent it out for a fiver a year, you're not making a 100% yield. In fact you're making a huge loss compared to selling and sticking the money in a deposit account.

Depends - short term you are not, because you would like as not pay out about 2% in fees to sell - so that's £10K down the pan (net) and you would get about 3% return on your money net. Yes, you should pay tax on the rent, but who does ?

[eric pebble]

Depends - short term you are not, because you would like as not pay out about 2% in fees to sell - so that's £10K down the pan (net) and you would get about 3% return on your money net. Yes, you should pay tax on the rent, but who does ?

Farmhouse in question is now part of a preservation area/farm - whatever. It is held in trust.... If things like this didn't happen -- everyone would just sell, "develop", take the money, - AND RUN.... which is basically what the uk now is -- a nation of spivs....

[iLegallyBlonde]

Yeah, I can beat that, I'm paying £900pm for a house currently valued at £350K+ .

I think that some people here are getting even better deals though.

Exactly the same here, although I think the owners think the house is worth more than £350k I would guess that is about right.