When the 100% mortgage comes back, will we see..........
Scooby Regular
Joined: Oct 2009
Posts: 6,345
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From: In a house
House prices currently have a floor of a 7% yield - these are the FTB houses (which are also the BTL houses!).
In essence, all you do is take the monthly rental for, say, a 2 bedroom house in your area ... when this is 7% of the house price, you have hit the floor.
This floor is still way above what the FTB can afford ... and this floor is raised each time rents are raised .......... renters are effectively pricing themselves out of ever owning a home for themselves, doomed to buy anothers house for them.
In essence, all you do is take the monthly rental for, say, a 2 bedroom house in your area ... when this is 7% of the house price, you have hit the floor.
This floor is still way above what the FTB can afford ... and this floor is raised each time rents are raised .......... renters are effectively pricing themselves out of ever owning a home for themselves, doomed to buy anothers house for them.
Where did you get 7% from? Is it an average for the country? In London I can tell you that you'll struggle to get much more than 5%. You'll get more if you go to undesirable areas and have bedsit type arrangements.
On that basis I'll assume that Mamoom's latest property is either in a shat hole or he is packing in ten illegals to every room
Last edited by Dingdongler; Oct 28, 2011 at 03:55 PM.
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