Friday, October 5, 2007

“Growth in the buy-to-let sector in the past decade has also helped to keep rents down”

Mortgage costs exceed private rents

Start of the weekend... read for a laugh! But if you are a BTLoser, rush to the nearest EA and put your "investment" on the market TOMORROW!

Posted by confused76 @ 07:15 PM (1076 views)
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12 thoughts on ““Growth in the buy-to-let sector in the past decade has also helped to keep rents down”

  • Now the secret is out, there could be more competition for the nice houses and apartments which many of us are currently occupying. Bang go our chances of negotiating low rents when our contracts are up!

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  • tyrellcorporation says:

    Su, just play 2 or 3 landlords off against one another, I got my rent down from £1100 a month to £950 and this is on a house which would cost £1800 a month in mortgage payments if I bought it!

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  • tyrellcorporation says:

    …oh and I’ve had the agent out 4 times to repair bits and replace worn out appliances… all free of charge!

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  • Thanks for the advice, Tyrell. Personally I think I may have a wee bit of trouble. There is not much of a rental market where I am, and when you have offspring that you’ve just settled into a nice local school… they have you over a barrel! Hopefully in a couple of years I’ll be able to afford to buy a nice place. 🙂

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  • I’m with tc, my rent has been at worst stable over the last 6 years, the last 3 year I have been renting a lovely flat (ground floor, lovely gardens, garage for my splitty van) in west london 2 minute from the thames and nice pubs. Its is valued, at around 200k which is about £1450 a month on 100% at present standard rates, I pay £725 a month and this year alone I have had a new cooker, garage door, kitchen sink and boiler (4 visits from a plumber in all) god knows how much all this costs? why would anyone pay twice as much for the hassle!!!!

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  • supply/demand bull we have heard over the last few years is about to be exposed.

    buy-to-letters about to be slaughtered

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  • stillthinking says:

    Nobody ever seems to point out the situation after the mortgage term is up i.e. does the money you have saved from renting for 20 years equal or exceed the equity you have in complete ownership of a property? This is the key tipping point for the BTLs who are using property as a pension scheme.

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  • Good point stillthinking, but what you also have to factor in is the amount BTLosers are having to pay to subsidise their mortgage costs i.e. for example Rent=900pmonth vrs Mortgage Interest Only payments=1400pmonth, difference £6k per annum. To add insult to injury, if they have interest only then there is the outstanding loan that needs paying off at the end of the mortgage term. 25 years later the BTLosers will have a hefty chunk subtracted from their final ‘pension’ plan plus the added cost of maintaining the property!!

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  • Where has the arguments about supply-and-demand gone? Surely rents with the short term contract would be the first to go high if there were a skweeze in supply! House prices only reflect how much institutions will lend people (i.e. risk) and affordability (i.e. IR) and what effect is the credit crunch having on these factors!!!!

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  • David Smith's Sub Prime. . . says:

    Su,

    Get your self a two year Buy to Lose and then go to the rent assessment tribunal. They will take comparables into the equasion and your rent may fall…

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  • Still thinking: This is an excellent argument if you can resist further borrowing. Most can’t. Very very few people will ever provide themselves with a decent pension through borrowing to invest in houses….or gold for that matter. The only thing that works, for most ordinary folk, is to repay what you’ve borrowed as soon as possible, only saving before then where you get a better return than the loan you have, and the same guarantees, and when your loans are repaid put the same amount or more into a nonrisky deposit type pension plan.

    Ask someone who advocates gold as an investment “how much have you saved so far?”.

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  • These banks are not stupid, and my guess is that BTL will be the first in line to get it, because they are in it for business, and as the banks know, when a business stops making money, it’ll be the first time buyers who will eventually come back to prop up the market.

    The smart banks will be reserving their low rates for first time buyers.

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