BTL is loss-making; should I keep or sell?

[graham]

Hi all.
I have some BtoL properties and considered selling 1 or 2.
Is the general opinion that it is best to keep the houses provided they can be let, or is there any case for selling 1 or 2.
Of course im aware of selling to reduce market exposure, but im in a position where I dont need to sell to release money and the BtoLs will comfortably let for the 15 odd years left.
CGT is a concern but I will struggle to live in each 1/many over the years to reduce CGT. Taper relief seems to favour keeping the properties for as long as possible and they should appreciate as well as erode the debt over the 15 years.
Id be keen to hear any opposing opinions other than suggestions of a possible market crash.
Many Thanks
Regards
Graham

[Taxation Solutions]

Graham

Basically when to sell is really down to you. It depends I suppose on how exposed you are in the market, do you need the income, what are your CGT liabilites etc etc.

Capital gains tax will always be payable if you sell or transfer the property to a family memeber for example, so it really is a case of what can you do to minimise the CGT. As your BTL's are non business assets, the maximum taper relief you will obtain is 40%. Living in the properties as your only or main home will again reduce the CGT burden, but is this practical?

From a tax planning perspective things can be put in place now, which would allow you to sell your properties free from CGT in the future. It depends on your overall objectives. If you plan to die with the properties then IHT is an issue not CGT.

Jason
www.propertytaxation.co.uk

[Tax Accountant]

Hi all.
I have some BtoL properties and considered selling 1 or 2.
Is the general opinion that it is best to keep the houses provided they can be let, or is there any case for selling 1 or 2.
Of course im aware of selling to reduce market exposure, but im in a position where I dont need to sell to release money and the BtoLs will comfortably let for the 15 odd years left.
CGT is a concern but I will struggle to live in each 1/many over the years to reduce CGT. Taper relief seems to favour keeping the properties for as long as possible and they should appreciate as well as erode the debt over the 15 years.
Id be keen to hear any opposing opinions other than suggestions of a possible market crash.
Many Thanks
Regards
Graham

I would personally generally favour retaining the properties for the long term unless you have other better investment opportunities to reinvest monies from sale of the properties.

Ramnik

[graham]

Thanks for the advice.
I recently started a new business and so for the next 2 years will not really be claiming a wage until the business builds up (estimated year 3 onwards).
So I will be on a higher tax rate in years to come but am on the 0% tax rate now and for the next couple of years.
I guess this could help my tax liabilities if I sell a house in the next couple of years??

[Tax Accountant]

Thanks for the advice.
I recently started a new business and so for the next 2 years will not really be claiming a wage until the business builds up (estimated year 3 onwards).
So I will be on a higher tax rate in years to come but am on the 0% tax rate now and for the next couple of years.
I guess this could help my tax liabilities if I sell a house in the next couple of years??

You need to sit down with your accountant and address the whole picture properly.

Ramnik

[graham]

Thanks for the advice.
Ive actually started doing the self assessment in the last 2 years.
I could not find an accountant who knew more than me about BtoLets.
This was disappointing as I have just a basic knowledge.
Im based in the South East/London- could you (or anyone else) recommend someone who is not too expensive and specialises.
Regards
Graham

[Tax Accountant]

Thanks for the advice.
Ive actually started doing the self assessment in the last 2 years.
I could not find an accountant who knew more than me about BtoLets.
This was disappointing as I have just a basic knowledge.
Im based in the South East/London- could you (or anyone else) recommend someone who is not too expensive and specialises.
Regards
Graham

I am on the other side of the fence and am well used to clients requiring professional services but then complaining about professional fees.

It should not be difficult to find a competent accountant. Make sure you get a professional accountant in public practice, such as a Chartered Accountant. Whether they are cheap (by your definition) is another matter. As they say, ''If you give peanuts, you only get monkeys''.

You need to look at making maximum use of your annual Income Tax personal allowances, annual capital gains exemptions and also starting and basic rate bands of tax.

You also need to address whether you are operating as an individual or through a limited company.

Additionally, you need to balance the sell of properties to use the annual capital gains tax exemptions against the loss of rental income and the investment property for good.

Some of these decisions are yours and you also need professional advise to maximise your tax savings. Professional advice is not cheap. Speak to other people you know to see if they could recommend an accountant to you.

Sorry, can't help you any more.

Ramnik

[gbeech]

Hi,

We have a New Build BTL rental property that we purchased 2 years ago, currently the rental income is only 4.4% of the current market value and after letting agent takes their percentage that leaves us with £480 a month, unfortunately the mortgage (interest only) is costing £775 a month.

We don't have the kind of money spare that would be required pay off enough of the mortgage to substantially lower the payments but the monthly loss isn't exactly crippling us financially.

The letting agent assures us that they should be able to increase the rent on the property soon but they have been saying this since we got it and i'm having a hard time believing the propertly will bring in enough to cover the mortgage anytime whithin my lifetime.

So should we just cut our losses and sell or accept the losses for now in the hope that in the long run it will make a profit?

Any advice would be very much appreciated

Thanks

[dmc]

If a house HMO might be the way to go, otherwise how about selling on a lease option?

[Sorrel]

I don't see how the agent expects to be able to increase the rent that substantially from what it is now to be able to cover your mortgage payments.

If your letting it now for what I can only assume is around £550 (£480 without agents fees) how are you going to achieve a rental of £850/£900 (taking into account agents fees to cover your mortgage)?

Unfortunately many agents mis-quote the rental potential (some times on purpose if working with the builder/off-plan seller) so that you, the buyer, will be able to get a mortgage based on this over-inflated rental valuation. Then they let it for less, they get the property and their fees etc, the builder sells the property and gets his commission and your left wondering why there appears to be a black hole in your bank account and the kids are wearing plastic bags on their feet!

I may have missed the point and start rambling but I'v seen this happen to easily and too blummin often!

[jeffrey]

Hi,

We have a New Build BTL rental property that we purchased 2 years ago, currently the rental income is only 4.4% of the current market value and after letting agent takes their percentage that leaves us with £480 a month, unfortunately the mortgage (interest only) is costing £775 a month.

We don't have the kind of money spare that would be required pay off enough of the mortgage to substantially lower the payments but the monthly loss isn't exactly crippling us financially.

The letting agent assures us that they should be able to increase the rent on the property soon but they have been saying this since we got it and i'm having a hard time believing the propertly will bring in enough to cover the mortgage anytime whithin my lifetime.

So should we just cut our losses and sell or accept the losses for now in the hope that in the long run it will make a profit?

Any advice would be very much appreciated

Thanks
I supppose that, instead of letting it, you could:
a. move into this property as your main home; and
b. let-out your existing house at greater rent.
This might save money, but you'd need each mortgagee to consent.

[Kathryn]

We have been in this position as well and if you can make up the difference without crippling yourself then do so. Now is clearly not the time to sell. It's not just a question of how much you will get the fact is no one is out there looking. There are many predictions about when the market will recover but one thing seems certain - eventually it will. Even if you have to find another three or four thousand a year to finance the property over the next two/three/four years I bet the loss will be significantly less than selling now and, once things pick up, as they will, you should make up any loss and hopefully make a gain. You have to look at property long term. Ten years from now you will be glad you did.

[gbeech]

I don't see how the agent expects to be able to increase the rent that substantially from what it is now to be able to cover your mortgage payments.

If your letting it now for what I can only assume is around £550 (£480 without agents fees) how are you going to achieve a rental of £850/£900 (taking into account agents fees to cover your mortgage)?

Unfortunately many agents mis-quote the rental potential (some times on purpose if working with the builder/off-plan seller) so that you, the buyer, will be able to get a mortgage based on this over-inflated rental valuation. Then they let it for less, they get the property and their fees etc, the builder sells the property and gets his commission and your left wondering why there appears to be a black hole in your bank account and the kids are wearing plastic bags on their feet!

I may have missed the point and start rambling but I'v seen this happen to easily and too blummin often!

Yes that pretty much sums up what happend, we were originally told they would be able to get £600 a month and told the morgage payments would be somewhat lower than they ended up.

The actuall rent of £550 combined with interest rate changes have conspired to create quite a sizable discrepancy between what we are getting in rent and what it's costing us so it just doesn't feel like much of an investment at the moment.

I suspect we are also going to have difficulty re-morgaging since the mortgage is probably higher than 85% market value now and as you mentioned the rental income valuation was over inflated to get the mortgage in the first place.

With hindsight i suppose i should have known that if a deal seems to good to be true it more than likely is.

[Sorrel]

Aye hindsight is a wonderful thing. The only thing to take solace in is your not alone. As i am not sure where you are based and market values for that area its hard to advise, I would probably just look at the short term but thats me.

Cut your losses and move on? I wouldnt like to estimate a date for all this to be sorted out and I dont think Im qualified to do so (mind you in my opinion neither are the so called experts)

Its a hard one mate...don't envy the situation. Good luck!

[Brit1234]

We have been in this position as well and if you can make up the difference without crippling yourself then do so. Now is clearly not the time to sell. It's not just a question of how much you will get the fact is no one is out there looking. There are many predictions about when the market will recover but one thing seems certain - eventually it will. Even if you have to find another three or four thousand a year to finance the property over the next two/three/four years I bet the loss will be significantly less than selling now and, once things pick up, as they will, you should make up any loss and hopefully make a gain. You have to look at property long term.

What you have to realise is now is the best time to sell if you are going to sell in the future.

Things are just going to get worse. You also have to realise that rents are now falling. Increasing amounts of people who can't sell are renting their homes, just speak to any letting agent to confirm.

We are also entering a recession and high inflation period. These factors historically put a downward pressure on rents as people feel the squeeze.





Ten years from now you will be glad you did.

In about ten tears time the property may of just about recovered to todays values. This is based on the traditional 18-20 year property cycle. We are going to have years of falls, followed by years of stagnation then some gentle rises.

Don't kid yourself, this downturn is going to last years. Maybe if you are in it really for the long term say about 20 years you might make a profit but you would be better off selling now and reinvesting at the bottom of the market in about 3-4 years time.

Ten years from now if you keep it you will be significantly worse off if not having the property repossessed. Your better selling now at 10% below current prices hoping for a quick sale.

[jeffrey]

Actually, no-one knows what will happen even a day ahead- let alone ten years! All we can do is guess/hope.

[Brit1234]

Actually, no-one knows what will happen even a day ahead- let alone ten years! All we can do is guess/hope.

No, we can make educated estimates by understanding risk, historical cycles, core fundamentals and other variables.

This house price crash has been long predicted by independent economist for years. Vested interest groups continue to try and cloud the water but if you see through them and look at the figures it is plain to see.


The simple fact is price is determined by the lending criteria and peoples ability to afford that criteria. It is now common knowledge that British banks profits have cut back massively and some are in loss. Many have had early rights issues and many have failed in this endeavor. This is only the start of the crash and banks will have less and less money to lend, some will be taken over at a fraction of their worth others will cease trading.

Lending criteria will get far tighter still. For landlords in negative equity you will either have to pay margin calls, forced onto SVR or told to go else where. Landlord repossessions continue to represent the highest percentages of properties at auctions.

All those people who said property doubles every 10 years were at best over simplistic.

50% from peak price falls are coming with the growing evidence that the falls will be even bigger due to negative speculation causing an over correction.

Remember we have had the most overvalued homes in the world with nothing tangible holding them up apart from loose lending and speculation. Now both of them are gone and we are seeing the biggest price falls in history.

[Sorrel]

No, we can make educated estimates by understanding risk, historical cycles, core fundamentals and other variables.

This house price crash has been long predicted by independent economist for years. Vested interest groups continue to try and cloud the water but if you see through them and look at the figures it is plain to see.


The simple fact is price is determined by the lending criteria and peoples ability to afford that criteria. It is now common knowledge that British banks profits have cut back massively and some are in loss. Many have had early rights issues and many have failed in this endeavor. This is only the start of the crash and banks will have less and less money to lend, some will be taken over at a fraction of their worth others will cease trading.

Lending criteria will get far tighter still. For landlords in negative equity you will either have to pay margin calls, forced onto SVR or told to go else where. Landlord repossessions continue to represent the highest percentages of properties at auctions.

All those people who said property doubles every 10 years were at best over simplistic.

50% from peak price falls are coming with the growing evidence that the falls will be even bigger due to negative speculation causing an over correction.

Remember we have had the most overvalued homes in the world with nothing tangible holding them up apart from loose lending and speculation. Now both of them are gone and we are seeing the biggest price falls in history.

Summed up...We're all F****D

Id like to hear from an expert on this subject who has an optimistic outlook on life.

Many of the so called experts on this subject that I'v talked to, or rather theyve found out I have a link with property and therefore feel the sudden urge to explain to me about the credit crunch and how they would solve it, have all said with a wry smile on their face '....i did warn you'.

What? You warned me personally?

'...well no but if you'd ask me I would have told you, you just didnt listen'

Didint listen? Its hard to listen to someone in a grey suit who thinks the best thing to do with his weekend is make sure his cupboards are all stocked upp and his radiation suit is sorted for the big nuclear war thats imminent he's that bloody dour.

'...well with the way the markets were going and based on cyclical trends (seems a popular one) you would have to be blind not to see this coming'

at this point I have produced a shotgun and have rid the world of another pessimistic so called expert.

[Tassotti]

Brit, I can't believe you have found your way onto every good site about property.

You have your opinions, and that is fine, but why you have to say 'I told you so' to everyone asking for help is beyond me.

You stated rents are going down. This is entirely incorrect. In the last six months, rents have increased by 10% in my area.

To the OP, this may be of little help to you.

You are in a very difficult situation at the moment.

The rents asked were initially above the current market level.

The price was also above current levels.

The market is worsening, and I see no way out unless you sell for a price that is rediculously below your buying price.

You probably won't, but to subsidise the rent for another 15 years (in my opinion) until you can get your money back may be even worse.

I honestly don't know what I would do in your situation, but hopefully, someone will offer some better advice.

Tass

[starlettings]

BRIT, YOU ARE BONKERS.
How much will a loaf be in 10 years?

Have you considered......
WE CAN NOT MAKE MORE LAND,
WE ARE STILL BREADING LIKE RABBITS
HEALTHCARE IS BETTER PEOPLE LIVE LONGER
COST OF LIVING IS GOING UP
COST OF OIL IS GOING UP
WAGES ARE GOING UP

Your 18 year cycle is 14 years and your view is YOUR view, and now is the best time for a long term property purchase if the deal stacks up now it always will eh?

[jeffrey]

BREADING LIKE RABBITS
Lapin, not le pain.

[Kathryn]

Predictions for recovery from 2009 onwards by The Centre Of Economics and Business Research and The National Housing Federation seem far more reasonable that the baseless rant of Brit. Some of us are plenty old enough to have seen this all before. It may be that it will take a number of years for the market to recove,r I certainly don't know when it will happen. There are not enough properties being built now. The UK is an island. Property - the right property -will always be a sound investment but it is a long term one and selling in the market today if you don't need to is, I believe, very ill advised.

[tenant29]

The OP's problem is basically - rental income =480 and interest payment 775
causing a income deficiency of 300 per month.

1. I was wondering if the area is over supplied by letting properties looking for tenants ? Can the income be improved by fully furnished letting ? or changing to another estate agent with access to higher income bracket customers ?

2. Is the mortgage interest rate likely to change and can it be reduced to a lower rate ?

3. If you cannot reduce the gap or cannot afford to pay the difference for a long period . then you should sell.

[Brit1234]

BRIT, YOU ARE BONKERS.

Or realistic




Have you considered......
WE CAN NOT MAKE MORE LAND,
WE ARE STILL BREADING LIKE RABBITS
HEALTHCARE IS BETTER PEOPLE LIVE LONGER
COST OF LIVING IS GOING UP
COST OF OIL IS GOING UP
WAGES ARE GOING UP



We can make more land especially if really needed, any one with a civil engineering background will tell you that.


http://www.ctbuh2008.com/images/techvisits/bahrain_islands.jpg
Here is a very famous example.



Our birth rate in 2007 was 1.87 children per women. 2.2 is the sustainable to keep a population stable (2 representing replacement of the adults and 0.2 accidental deaths, infertility etc).

Most of the recent increases of birth rate has been in foreign nationals some of which are going back in large numbers like the Poles.

Many British couples have put back children due to monetary issues like costs of properties.

People are living longer but there has been no dramatic increase in living. It has been very very gradual. In areas like Glasgow life expectancy is falling.


With the cost of living and everything going up faster than wages people have less money for rents and mortgages limiting prices and rent.


Your 18 year cycle is 14 years and your view is YOUR view, and now is the best time for a long term property purchase if the deal stacks up now it always will eh?

No its a well known 18 year cycle. Have a watch of this video below to enlighten your selfs.

http://www.youtube.com/watch?v=7EWsHD-ZuJ8



The simple fact is that todays house prices cannot be justified, they are unsustainable with nothing tangible holding them up. All the loose lending that fueled these prices has gone and hence prices will plummet.

CDOs are crippled.

There is no shortage of property. Huge amounts have been created with very little taken down. The pressure has been that a huge amounts of amateur investors have jumped into competition with first time buyers and out competed with them. But the buy to let bandwagon is almost over with many seeing how risky their positions are as house prices fall at the fastest rate ever and rents in many areas such as London are falling. Landlord repossessions are sky rocketing.

Ask your selfs this, do rents typically go up or down in a recession?

[tenant29]

I thought the financial mess which we are now witnessing is explained by late arrival of the Kondratieff Wave - delayed by 18 years

http://www.moneyweek.com/file/3355/kondratieffwavetheory.html

[sgclacy]

My view is that property as a long term investment is boarderline. However with gearing (generally not available to anything like the same extent for other investments) gains can be very attractive.
ie £200k property loan £150k = £50k of equity. 10% rise in price makes property worth £220k equity now £70k a rise of 40% due to a 10% upward movement


HOWEVER in a falling market gearing is very destructive indeed and your equity can be erroded at an alarming rate.
ie £200k property loan £150k = £50k of equity. 10% fall in price makes property worth £180k equity now £30k a fall of 40% due to a 10% downward movement

Therefore a BTL investor must be prepared to ride the waves in the market and sell just before the peak and buy at the bottom. This requires some skill and nerve and the coming correction will sort the "wheat from the chaff".

It is only the capital apprecaition in BTL that is attractive. Rental yields are really too low compared to the risks. Many underestimate the true long term cost of owning a property particularly in respect of repair costs and upgrading of kitchens and bathrooms etc.

When appraising a BTL investment the rate of return required needs to be adjusted for level of gearing. As from the example above a highly geared investment could easily lose you all your equity AND leave you having to deal with a shortfall. Therefore for that risk you need to increase the rate of return you need from the investment

I would follow the ratio of house prices to earnings and sell when it reaches 4.25 and buy at 2.75. However I accept that I would have lost out significantly by selling in around 2005.

[Kathryn]

NFHB predict a 25% rise on LAST YEARS HOUSE PRICES by 2013. Do a google search. Not the only professional body to take this view by any means. If you look at the reasoning behind it then it makes sense.

You assume you can sell now - well you almost certainly can't because buyers have almost dried up due to the mortgage drought. If you do by some amazing piece of luck find a buyer you will lose the stamp duty you paid, the legal costs of buying and selling, plus whatever you lose from what you paid and what you sell for.

Many investments make a loss in their early years if you cash them in , pensions, savings plans etc. If you don't need to sell then don't.

[SALL]

Or realistic



We can make more land especially if really needed, any one with a civil engineering background will tell you that.


http://www.ctbuh2008.com/images/techvisits/bahrain_islands.jpg
Here is a very famous example.


Ask your selfs this, do rents typically go up or down in a recession?

1) So you are saying, we will be building artificial islands while the prices of the houses already built will go down?

2) Ask yourself this, do people still need property to live in or do cardboard boxes are an acceptable alternative in a recession?

[Kathryn]

Artificial islands round the UK, what a great idea. After all the UK is very similar in climate to Dubai, Oman, Bahrain etc. The surrounding water is much like that in the Gulf. Cheap Asian labour is easily come by- and when I say cheap I mean room, board and a hundred quid a month. Housing shortage solved.

[Brit1234]

NFHB predict a 25% rise on LAST YEARS HOUSE PRICES by 2013. Do a google search. Not the only professional body to take this view by any means. If you look at the reasoning behind it then it makes sense.


I have to strongly disagree with you for the following reasons.
1, Property at the moment is extremely overvalued and beyond the range of most to purchase.

2, Our interest rates are extremly low and likely to rise back to normal levels making mortgage payments on a extra 25% rise huge.

3, Banks now have to rely on savings rather than CDOs. The British public save less than ever before putting extreme limits on size or numbers of mortgages.

4, There is no shortage of supply at the moment and there would be plenty of homes in the past if they weren't all bought in advance by the buy to let brigade. If there is going to be shortages of property surely there should be limits on landlords and extra taxation.

Lets face it the buy to let gravey train is dead and if you didn't get off a year ago you are going to lose money.

[mind the gap]

[QUOTE=Brit1234;86204

Things are just going to get worse. You also have to realise that rents are now falling. Increasing amounts of people who can't sell are renting their homes, just speak to any letting agent to confirm.

Yes, but conversely, there will be equal numbers of people who cannot aford mortgages in the current economic climate and will therefore need to rent rather than buy. Result : larger pool of tenants as well as more property on the rental market. Also, rents in many areas are in fact increasing to reflect the higher mortgages payments landlords are having to make.

I am not an economist but I see no reason for your doom-laden vision. There is, and will continue to be, a shortage of homes in Britain. It's not America. As long as the need for homes outstrips the supply, there will be a limit to how far prices will fall. We don't need to throw ourselves off cliffs just yet. (Global warming will bring the sea to us instead!)

[jeffrey]

Mind the Gap: learn your vB code usage rules!

[Pobinr]

Inflation is only even in one direction & that is positive. House prices in the long term track inflation as wages rise due to inflation. I'm not bothered about a temporary blip in property prices. Why should I be unless I want to sell, which I don't. In fact on the contrary now's a great time to pick up some bargains.

[jeffrey]

Inflation is only ever in one direction & that is positive.
Not so. There has occasionally been deflation. That's bad too.
But, of course, people forget that inflation is akin to acceleration. It measures a rate of change in a 'lower' medium (price, velocity) that itself changes. If inflation falls, the meaning is only that prices are rising more slowly- not that they're falling.

[mind the gap]

Mind the Gap: learn your vB code usage rules!

Que? I am from Barcelona, remember

[Kathryn]

What on earth are you talking about Brit? Buy-to-let-landlords buy houses for people to live in don't they? I wasn't aware that they bought them to keep them empty, stop other people buying them and create a faux shortage of property.

The present crisis is not about affordability as anyone who is trying to sell can tell you.

No shortage of homes? What parallel universe are you living in?

[Brit1234]

Yes, but conversely, there will be equal numbers of people who cannot aford mortgages in the current economic climate and will therefore need to rent rather than buy. Result : larger pool of tenants as well as more property on the rental market. Also, rents in many areas are in fact increasing to reflect the higher mortgages payments landlords are having to make.

Varibles in the rental market have now changed rapidly in the last six months.
1, Lots more people renting, sharing and staying at home.
2, Rents first rising due to all the extra renters.
3, Increasing numbers of houses for rent due to people unable to sell.
4, Huge increases in Rental properties out stripping numbers of renters leading to falling rents especially in London.
5, Rents typically fall further in repossesions and voids/rent arreers increase.

Financial Times Article on falling rents below, remember last month ARLA said rents had fallen 9%


http://d2cft.volantis.net/d2c/0.0?feed-article-id=b8d0ba90-6005-11dd-805e-000077b07658



I am not an economist but I see no reason for your doom-laden vision. There is, and will continue to be, a shortage of homes in Britain. It's not America. As long as the need for homes outstrips the supply, there will be a limit to how far prices will fall. We don't need to throw ourselves off cliffs just yet. (Global warming will bring the sea to us instead!)

You will see that housing won't be about supply and demand but fiance. Fiancial restrictions will limit price, not taking this into count is deeply niave.:eek:

[jeffrey]

You will see that housing won't be about supply and demand but fiance. Fiancial restrictions will limit price, not taking this into count is deeply niave.:eek:
As I implied on another thread:
For finance, get a fiance.
(Otherwise you're deeply naive).
Oh, and also get a spellcheck whilst you're there?

[Brit1234]

What on earth are you talking about Brit? Buy-to-let-landlords buy houses for people to live in don't they? I wasn't aware that they bought them to keep them empty, stop other people buying them and create a faux shortage of property.


This supply and demand rubbish is about people wanting to buy properties not total population divided by total properties raios.




The present crisis is not about affordability as anyone who is trying to sell can tell you.

Anyone trying to sell at 2007 prices will tell you that they aren't getting the buyers as banks haven't the money to lend to support these prices.

Prices were at the very peak of affordability due irresponsible lending, now lending cost have gone up the peak of what a buyer can get is dramitically reduced. Especially when they need at least a 10% deposit as a minimum and higher for a cheaper rate.

It is clearly about affordability.

Almost everyone would like a top range Porche, but the demand is restricted by affordability. Housing is the same.



No shortage of homes? What parallel universe are you living in?

Sorry but at present there is 1 portential buyer for over 15 sellers. I see no shortage of homes. Just type in SW6 and you will see 1,000 homes up for sale in one small area. You can see the huge amounts of buy to let properties as investors bail out. Also if you look at the site through firefox you can use a program called Property Bee to see all the multiple reductions in prices.

Property Bee, great site:)
http://www.property-bee.com/

Fulham SW6 properties
http://www.rightmove.co.uk/action/publicsite.PropertySearch

[Kathryn]

You are probably right about the non existence of a housing shortage Brit. I was getting my information from The National Federation of House Builders. Oxford Economics. The Centre for Economics and Business Research etc. I bet they have never even heard of Greenbee.....amateurs!

[Brit1234]

You are probably right about the non existence of a housing shortage Brit. I was getting my information from The National Federation of House Builders. Oxford Economics. The Centre for Economics and Business Research etc. I bet they have never even heard of Greenbee.....amateurs!


That’s OK Kathryn. I was taught in my degree in risk management to understand and evaluate all aspects in a multidisciplinary way.

The Centre for Economics and Business Research is a well known Marketing company being funded by the building industry. They have a vested interest in keeping house prices high.

The same is true of the National Federation of House builders and Oxford Economics. Oxford Economics does the reports for the Housing Federation and for years have been putting out spurious and wild predictions. Just because it says Oxford in the title don't think automatically that it is staffed by the best Oxford free thinking economic graduate students. In fact the Housing Federation has lots to lose if prices continue to plummet like they are.

Glad you are coming around Kathryn. Remember to look behind the headlines and try to grasp all the weighted push pull factors as you make your evaluations on the property market.:cool:

[Kathryn]

A degree in risk management as well as being a really good speller. WOW! I am now totally convinced.

[Brit1234]

A degree in risk management as well as being a really good speller. WOW! I am now totally convinced.

Thanks, maybe you will be able to spot the bubbles next time, maybe.:D

Its a good job the Bank of England has said it isn't going to bail out the banks. This housing bubble is going to deflate even quicker.

Remember houses usually go up with inflation unless you add value. Anything else is usually baseless speculation which will collapse in time.

[Imp]

WE CAN NOT MAKE MORE LAND,


I find this lack of land argument difficult to grasp.

Approximately 10% of Britain is built on.

90% of Britain is not built on.

If we doubled the amount of Britain which was built on, we would reduce the amount of land not built on by 5.6%.

If we doubled the size of every settlement, the distance from the outside of the settlement to the centre would increase by only 41%.

In summary, Britain can comfortable accomodate an enormous increase in homes without a significant deterioration in quality of life.

[jeffrey]

Great Britain or UK (a difference which even the Olympic organisers misunderstood)?

[Imp]

Great Britain or UK (a difference which even the Olympic organisers misunderstood)?

My source for statistics state Britain, so I would have to assume it includes England, Wales and Scotland but excludes Northern Ireland, Channel Islands, Isle of Mann, British Antarctica, Faulkland Islands, Ascension Island and a few other remains of the Empire.

[jeffrey]

As it happens, "Team GB" included athletes from not only GB but also NI and even IoM!

[davecook]

what is the loan & value as tmw may do this on their 4.85% rate


Hi,

We have a New Build BTL rental property that we purchased 2 years ago, currently the rental income is only 4.4% of the current market value and after letting agent takes their percentage that leaves us with £480 a month, unfortunately the mortgage (interest only) is costing £775 a month.

We don't have the kind of money spare that would be required pay off enough of the mortgage to substantially lower the payments but the monthly loss isn't exactly crippling us financially.

The letting agent assures us that they should be able to increase the rent on the property soon but they have been saying this since we got it and i'm having a hard time believing the propertly will bring in enough to cover the mortgage anytime whithin my lifetime.

So should we just cut our losses and sell or accept the losses for now in the hope that in the long run it will make a profit?

Any advice would be very much appreciated

Thanks

[ash05]

Cut your losses and move on? I wouldnt like to estimate a date for all this to be sorted out and I dont think Im qualified to do so (mind you in my opinion neither are the so called experts)

Its a hard one mate...don't envy the situation

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