Saturday, May 13, 2006

Does buy-to-let still make sense?

Guardian: Does buy-to-let still make sense?

Good to see this on the Guardian site, are the "Buy to Fret" investors beginning to struggle?
"In the TV world inhabited by Britain's favourite property duo, Kirstie Allsopp and Phil Spencer, making money from buy-to-let property is a doddle. Follow a few basic rules, buy a place in a carefully selected city, and just sit back and wait for the money to roll in."

Posted by Converted Lurker @ 12:16 PM (644 views)
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1. Retiredbanker said...

Britain's favourite property duo- yeah that's right!

Saturday, May 13, 2006 06:35PM Report Comment

2. Uncle Tom said...

Nice to see some sane commentary.

In some respects I would like to see a fresh surge in speculative investment - to push the UK property market over the edge sooner rather than later, as the longer things go on, the worse will be the eventual downturn.

However, other factors might cut in first - there are some deep rumblings in the financial markets.

The markets have been a bit excited recently, and the indexes fell on Friday for reasons that did not entirely reconcile with the published news of the day.

Something is (or has) been taking place beneath the radar, but at this point any guesses would be wild speculation - the coming week might give some clues.

Saturday, May 13, 2006 07:12PM Report Comment

3. British Bear said...

I watched Phil & Kirsty's latest offering with interest. Three main things struck me as odd about the program. Firstly their "extensive research" seemed rather lightweight. Secondly their comments about BTL in Edinburgh, which they ranked highly, were inaccurate and incomplete. They recommended the Bruntsfield area of the city as a top investment because it is "near the hospital", so doctors and medical staff will be tenants for BTLs. Which hospital? Is that the Royal Infirmary that closed and relocated out of town more than three years ago? The site of the old Edinburgh Royal Infirmary has been redeveloped as residential property. They also found a 2 bed flat and quoted the offers over price which can be considerably lower than what you would actually pay and then genius Phil recommended converting it into a 3 bed property to make more rental income. Sounds good in theory, but he didn't mention the stringent and costly HMO regulations that were introduced in Edinburgh by the City Council in 2003. This type of conversion would certainly add thousands of pounds to the cost and many landlords have simply sold up three bed flats or accepted fewer tenants to avoid these costs. Thirdly it emerged that Kirsty has never actually been a landlord herself and is about to go into BTL with her own flat. So she's not the expert she claims to be - no surprise there!!

Saturday, May 13, 2006 09:45PM Report Comment

4. Sirgoogle said...

Very interesting to see some balance in the newspaper article.

The "duo" obviously had not done their homework as local EAs seem to be agast at the lack of research into the top 10 areas to invest. They also seem to have got their retuns wrong - omitting the costs to the BTL investor, and quoted rental income only (in one of the examples the BTL investor would have made a loss from the beginning). They are still pushing the line that proprty will rise 55% in the next 5 years, and this is completely contrary to what the banks and BoE have been saying.

I wonder who sponsored the program?

Sunday, May 14, 2006 06:45AM Report Comment

5. Talking_rot said...

I haven't seen the programme and make a point of missing Krusty and Phil and they make my teeth curl. However, where on earth did they get the idea that property prices will rise 40%-50% over the next 5 years? I would love to see the logic behind this statement. Does any one have any clues? (Mind altering drugs is the most likely explanation I can think of).

Sunday, May 14, 2006 08:20AM Report Comment

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