tony de wonderful

I'm fine with that, but what I object to is paying directly and indirectly to guarantee that their 'risks' pay off.

hodgy0_2

This is off course 100% true, (like most of what you have posted on this topic)

The problem is, and it is a big problem for you, is that you live in rented accommodation

But everyone who has children has the same problem tbh, how are they going to afford to buy a house and attain the same lifestyle as their parents

njkmrs

I guess we can start them off by letting them have a property out of our Porfolios Hodgy0_2.!!!

After all its about helping them have more than we ever had when growing up.
We took the risks and our families deserve to reap the reward.
Although if the kids had turned into ******* they would be getting zilch!!

Dingdongler

Surely with your A'level in Sociology you can see the massive hole in your argument?

If the risk is guaranteed then that means house prices can never fall and must always rise, that is the definition of a guarantee in this context.

You have said time and time again that a significant fall in house prices could be a reality. We have actually seen house prices fall after 2008.

Nobody with half a brain would think that house prices could never fall, they have and they will again

Therefore the risk is not guaranteed by any stretch of the imagination.

You can't have it both ways, if you think the risk is guaranteed you are saying that house prices will NEVER fall, and I'm pretty sure that is not what you are saying.

You are just bitter about your poor choices in life and trying to justify those poor choices to make yourself feel better.

Saying that I'd be pretty p7ssed if I was thirty years old, aspiring to live on a barge and driving a ten year old Renault

tony de wonderful

If rewards = risk, then we have a distorted situation where the rewards have far outstripped the 'real' risk that they are predicated upon in terms of free market theory. That is my point. You are right the returns aren't 'guaranteed' in a absolute sense, I kind of used that word rhetorically.

jonc

How ironic. How about just looking at it as simply a place you can call home rather than as an investment. All I'm saying now is as good a time as any to buy a home.

tony de wonderful

If you own assets or will inherit them then you are in good shape. It's the people who are either prospective FTBers or just want to rent who are screwed, unless of course the state maintains and extends the various help schemes ad infinitum and banks lend for longer mortage periods, rates stay very low forever, etc., then the magic money tree of property will not keep printing. One can see all sorts of problems with this, and there is every reason to view it as unsustainable, and it creates moral hazards, and it can cause a systematic crisis.

Short and medium term it points to a sort of polarisation in society between those who own and those who don't. The former get richer, the latter poorer. And it isn't chance, it's being made that way by political decisions.

Rentier Capitalism.

f1_fan

iTrader: (9)

Ding you seem like a sensible chap so this isn't aimed at you, but there are people on this thread who seem to seriously think the market will never fall yet with a country as up to its eyes in debt as ours it could and probably should suffer a major property price correction in a few years time when the paymasters knock on the door of UK PLC and want some of their money back.

People like jonc seem to completely ignore this fact as do all politicians. I am not saying to what degree it will affect the market as I am not skilled enough in the complexities of the economics, but the fact remains that at some point we need to properly start paying back what we have borrowed and the longer everyone ignores it the worse it will be when it happens.... all IMO of course.

hodgy0_2

the problem is njkmrs, I have 5 children, that is quite a portfolio my kids will need

the problem is F1 neither are the economists

Dingdongler

Houses are, for now anyway, 'investments' whether we like it or not. They behave like any other investment ie the prices rise and fall depending on supply/demand, they give a yield/return in terms of rent etc

Personally I don't for a second think that further hpc isn't a very real possibility and that the problems in our economy are far from fixed (and won't be fixed by just inflating property prices)

And as you have pointed out that neither you, I, or anybody else is skilled enough in the complexities of economics to predict what will happen to house prices.

And that actually is my point, we all make a call on the 'market'. It's an educated guess, a hunch, spider senses, call it what you will.

But when BTLers, landlords or even just regular homeowners make this call and it comes good (for now anyway) a segment of the population, TDW for example, are furious and bitter.

That's the bit that annoys me. Let individuals make their call on the market and live by their decisions. Don't be envious and angry if your decision turned out to be the wrong one.

TDW (and plenty of other housepricecrash renting types) will say that the govt is manipulating the market, but central banks and govts manipulate all markets ie gold, energy, currencies etc. Such is life, what can ya do?

But markets can only be manipulated so much, at some point they become uncontrollable.

People might misinterpret my posts and think the reason I say all these things is that I'm some sort property tycoon (or pretending to be one)

I can assure you that is not the case, but I defend the right of landlords, btlers etc to do what they want with their money and if they succeed wish them well.

I just can't stand the jealousy, envy and bitterness that people display when they get it wrong and somebody gets it right.

DYK

Just simply means I'm looking at buying abroad,that mate who had the mortgage for 35 years,he's house is in one of these village trust areas,the other mate has got a £500,000 Tudor house,and to look at them both,I wouldn't give any where near that type of money.
Now my mate at work recently bought a house in Spain for 70k with your swimming pool and all that,I tell you something it knocks the other two houses that my mates have bought here by a long way.The money you can spend on property here I think is just silly.Eveyone is different of course,but I couldn't have a mortgage for 35 years,knowing I've got that debt around me for that amount of time..
I think it's just bonkers..

dpb

Won't be 35 years, but i predict they'll be more hiccups along the way than any previous 35 year mortgage

I'd love each to know just what proportion of the population work force benefits from increasing housing prices, ie people are putting up new stock. (houses) these are ultimately the only people that do benefit imo

DYK

That maybe so,but we seem to have got this culture over the years in the UK where everyone wants the big house,with the big kitchen and the big dining room etc etc,and that's fair enough.The difference is if you want that in this country,you have to pay stupid money for it..

jonc

There is also the fact that people now tend to refer to property as just as an investment rather than just a home, even FTB. They buy a place, do it up and then try to sell it on in the hope of making a tidy a profit before moving on to the next property driving prices up further.

Like any market, it's obvious that property prices go down as well as up, but I bought a property as a home to raise my family, not to make a profit. If the market go, great but I'm not looking get any advantage out of the rise, likewise if the market goes down, it won't affect me as I'm not look to sell. For me it's just a home for my family and plan to stay where I am for some time.

DYK

one thing I have noticed is just a short drive from me is what I call the higher elite area of houses.
Driving along any road around that area now and all you see is for sale signs.Whether that is because the houses are getting passed on to the children and they can't afford the council tax,or they are just selling and making some money out of it, or for some other reason.

jonc

Either way I'm sure they aim to make some profit on the sale of their property. These "private property developers" are as much to blame as BTL'ers if not more so in driving up prices.

madscoob

iTrader: (3)

the real money is in land, like a wise old farmer said to me, if you have any spare money boy buy land, any one can build a house but you need land to build it on, and god ain't making anymore land

njkmrs

I think certain people feel being a landlord is an easy job.
Sit back and count the cash.

Unfortunately that's not the case. You do have to work at it and take the risk in the first place.
Lets give landlords a break eh!!

GlesgaKiss

After all the hard work/costs are taken into account, what kind of yield does the average landlord earn? Or is the benefit of being a landlord more in the fact that you can have someone paying your mortgage for you (BTL)?

njkmrs

For me its the paying off the mortgages that I am after.
I have a full time job which I live off.
Its the earlier retirement I want and getting them paid off will help.

GlesgaKiss

What kind of properties do you think are the best to go for? Low-priced ones with high yields and poor tenants are presumably best avoided. The high yield will be wiped out easily when you need to pay for something I'd imagine. If I was going to buy anything it would be something like a 1 bedroom flat in Glasgow city centre. A different quality of prospective tenants, so virtually no hassle - I would hope! For the past 5 years or so I've had a target to save to which would let me buy a decent city centre flat outright. It's just what to do with the money once I have it. I suppose a decent deposit on two flats would be an option, but the sums would have to add up. But I do like the idea of having a good quality city centre flat.

Dingdongler

It's horses for courses but it makes no sense to buy a rental flat outright. Much better to split the cash and put deposits on 2-4 flats depending on your personal circumstances.

Or you could buy it outright and if/when you feel you want to expand then you can mortgage the property, release money and buy further properties.

In terms of yield you need to find the best balance for you. High yield properties as you say will often cause you lots of headache and will often also give poor capital growth.

If you can afford it you might be better off accepting a lower yield but have the chances of higher capital growth.

GlesgaKiss

Thanks Ding. A year or two ago I had delusions of 8 or 10% yields on cheap flats, but as I've accumulated more in the way of savings I've started thinking with a bit more sense. My thinking for buying outright was simply to have £100+k earning 5% or so (in the Merchant city, for example). It would be an alternative to stocks but, as I said, the sums would have to add up to leave a decent net yield. If I put down some deposits on flats I would be giving up that extra income to have a lot more capital down the road. But then again, would I be ending up with the same kind of capital I would have by just reinvesting the income from a mortgage-free flat or dividends on stocks etc? I'll need to work it out properly.

Dingdongler

You need to do the maths for your own personal circumstances. At first glance, (and making lots of assumptions like no hpc the day after you buy!) buying 4 flats might be better than reinvesting the 5% return. The reason I say that is that with the 4 flats you have leveraged your investment and so your total return will be multiplied.

But all strategies carry a risk, and to some extent the more you leverage the greater the risk.

What I'm surprised about is the yield you mention. Of course I know nothing of Glasgow property but 5% seems low. Personally I wouldn't buy at a 5% yield unless it was in a trophy area ie prime central london.

You can get 6% all day long in London (nice areas on the tube line) and 7% if you hunt around.

Are you looking at new builds? I find these to be over priced and it maybe worth looking at older property especially period conversions etc (if you have these in Glasgow?)

tony de wonderful

There you go again trying to reason that the current rise in house prices is primarily the result of some 'automatic' or 'natural' supply vs demand behavior, ignoring the 'hard facts' about ultra low interest rates, funding for lending, help to buy, etc.

Waffling about supply and demand is just a platitude and a tautology. Question - when is a market not a market? When an actor like the state can do things like flood the 'market' with cheap credit? Set interest rates arbitrarily? Give cheap and guaranteed money out as deposits? Give banks cheap money? Perhaps when the 'market' becomes a de facto Ponzi scheme dependent upon people entering with more and more money to sustain?

Calling it a 'market' just legitimises all that as 'natural'. Plenty of the people you are lauding as having made great decision actually made rubbish ones except they were saved by the state. If the state introduced a 50% tax on property ownership tomorrow would you be rejoicing at the subsequent state of the property market? Only supply and demand...blah blah, derp derp. Oh well the state screwed me over....I'll just accept it like a bad day.

I'm not bitter about people's sucess. I'm bitter in that the flip side is that people like me pay for it, because the government has arranged it that way. I've not risked money in property so why should I lose money to it?

dpb

Natural selection.

GlesgaKiss

That 5% would be a net yield by my rough calculations (guess). Over 6% in the Merchant city. Have you been there? It's nice.

http://www.rightmove.co.uk/property-...-42216545.html

Buchanan Street

http://www.rightmove.co.uk/property-...-40173928.html

These might not be central London, but they're not to be sniffed at. I can't afford London.

njkmrs

Keh ???

Dingdongler

Those flats look really nice and I wasn't trying to imply anything about Glasgow, I've never been.

For my own education can you tell me what the typical rent would be on those flats?

Cheers

GlesgaKiss

Between £600 and £700pcm.

It's a nice place. I think it would be great just being able to walk out of your door on a Saturday or Sunday morning and have a coffee outside a nice cafe and watch the world go by right in the centre of the city (in the summer here obviously!). Really nice architecture, friendly people and good shops.

http://en.wikipedia.org/wiki/Merchant_Cityhttp://en.wikipedia.org/wiki/Buchanan_Street
"Buchanan Street is renowned for its variety in high street shopping, including flagship stores, with rents on the street being as much as £250 per square foot, making it the 6th most expensive street in the United Kingdom for retail rent, only surpassed by 5 streets in London. Buchanan Street is also the second busiest shopping thoroughfare, second only to Oxford Street in London. Glasgow has been recognized for being the second best shopping destination in the United Kingdom, after London, since 2008."