Sunday, March 16, 2008

Times offensive to save the BTL

Costs and red tape take the shine off investing in property the UK

Not seen so many badly disguised advertisement pieces in a long time. we are nearing the market collapse. I am posting more links in a comment. They say "The buy-to-let market is thriving, but too risky for most newcomers" but what does that really mean?

Posted by confused76 @ 11:30 AM (1574 views)
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15 thoughts on “Times offensive to save the BTL

  • These are more articles in the sunday times. desperate!!

    http://property.timesonline.co.uk/tol/life_and_style/property/investment/article3540763.ece

    http://property.timesonline.co.uk/tol/life_and_style/property/investment/article3545853.ece

    http://business.timesonline.co.uk/tol/business/money/investment/article3558694.ece
    “Not everyone is going to be worse off. High-er-rate taxpayers with nonbusiness assets such as second homes, buy-to-lets and shares listed on the main market will see the minimum rate they pay drop from 24% to 18%”

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  • it_is_going_with_a_bang says:

    “The most expensive properties on the Hometrack list are in Adur, West Sussex, where a two-bedroom home costs about £200,611. But because of its location between Worth and Brighton, landlords can reap rents of about £213 a week, producing a yield of 5.5%.”

    What utter rubbish. That is a HUGE lie.
    2 Bedroom properties at £913 a month???? In ADUR … LOL. LOL LOL LOL.
    The Times is on a mission of some kind.
    A quick glance at Rightmove will tell you what utter rubbish that ‘evidence is’.

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  • it_is_going_with_a_bang says:

    Oh and I live in Adur too, so when I say thats rubbish – I can see it’s rubbish.

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  • it_is_going_with_a_bang.

    I lived near there but west of Worthing for 12 years. You are absolutely right. I would say it’s not exactly the most desirable place, but I shouldn’t because that would be offensive and compared to other areas it might be considered paradise. Those rents are ludicrous.
    A shame to read such gutter press from such a paper, but to be expected nowadays of course.

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  • but even if….
    a gross yield of 5.5%, net probably 4%, is still far less than savings rates

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  • it_is_going_with_a_bang. I also live in the Adur area (Lancing) and the price of three bedroom houses are just reaching 175K, how a two bedroom can reach 200K is beyond me. As for the rent for 852 pounds a month this is usually a 4bedroom + house as you know this is more Vi spin.

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  • Just checking your figures on RightMove, you are quite right! In Shoreham-By-Sea, Adur District, £750 a month gets you a nice 2-bed and £950 a month gets you a nice 3-bed. The purchase price for similar properties is £170k and £215k respectively – and these properties are in the same development so we are definitely comparing like with like. This gives us a yield of 5.3% on either property, before taking into account agency fees, void periods, maintenance costs (broken boilers), refurbishment costs (repainting, new furniture), any service charges or ground rent, etc.

    A 2-year fixed mortgage can be found at 5.49% (source: moneysupermarket.com) but with a minimum LTV of 85%. So on the cheaper property you’d need a £25k deposit. If you believe the hype, cash-rich professional landlords are poised to jump on such brilliant deals. Somehow I don’t think so!

    (Slightly off-topic, but another landlord website recently claimed that professional landlords are snapping up bargains at auction. I found a stunning list of auction properties in Manchester, have a look and see if they tempt you…. not! They’re mostly hideous hell-holes. Edward Mellor Auctions, large 2.4mb PDF file with colour pictures)

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  • Letthemfall says:

    I don’t know what it is with the Times. Compare the Times with the other broadsheets. It’s nothing but a rag now.
    I think the journalists must all own BTLs for them to keep writing these ridiculous articles. But to be fair there are a couple of comments towards the end pointing out that housing is a poor investment now. As for the rest, it is just a case of believing prices will rise forever, apart from occasional small downturns, which are viewed as “opportunities”. That was the mentality with dotcom until it finally bust. But how anyone can seriously believe house prices will go up in this economic climate is beyond me.

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  • Drewster, Lot 29 looks appealing. Afterall, if we were to believe the many TV programmes, there’s loads of
    students to let to in Scumchester.

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  • WOW The Times is on an all-out property pornfesta today!

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  • Singlespeed says:

    Rent has no parity with property prices in percentage terms when house prices go up therefore,yield becomes much less,more so if buying
    this year or next,rent has to increase to catch up get a decent yield.After all deductions on 5% gross your left with estmated 2.5 -3% net
    return on your capital employed and thats around the Nottingham/Derby areas ! .

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  • I-cld-murder-a-blt says:

    Just a point but why are all the letting branches of estate agents closing?

    I guess according to those in the know they would be moving to bigger premises, hehe, as there is so much demand!!!

    p.s great title C76

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  • Scandinavian Pessimist says:

    From:
    http://property.timesonline.co.uk/tol/life_and_style/property/investment/article3540763.ece
    (posted by C76 above):

    ‘Stuart Law, managing director of Assetz, property investment advisers, is also convinced there is still money to be made, especially in the British market. “There is a very good and sound argument to say that the UK is one of the safest places to be in at the moment,” he says.’

    OMG, and those words come from a professional property advisor… no wonder so many people have got screwed on their investment recently…

    Just out of interest Stuart Law: what exactly are those “good and sound arguments”?

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  • justwatching says:

    Good link Drewster. Have you seen the number of Tenanted properties with ‘External viewing only, Tenant must not be disturbed’ ?

    Who would buy these??

    I know, pwoperty investors.

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  • Thinking The Party Might Continue. . . says:

    Eastleigh! I live next to Eastleigh and the market there has stalled. Nothing is selling, with lots of houses to buy this only equals one thing. The parties over!

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