Chip

Looking around there are some really good geniune deals on buying to let now that the housing market has slowed down. Has it reached a peak on the buying to let front or is it still worth going into this market.

Saw a few apartments on the weekend being built by large builders and left my number saying to get back to me if they could offer me a deal. One rang today offering me £600 month for 2 years if I bought within 8 weeks. I know this is a geniune deal as a colleague bought for the same price last November on the same site but without the £600 offer which equates to a discount of £14400.

Just wanted a few peoples views on whats going to happen in the market in the future as most seem to think after a slow 2005 it will be back to 5% in the coming years.

Chip

pslewis

Well, if you buy with a 10 year view and rent then you can't lose. If you want a profit in 5 years then plonk your money in TESCO!

We have a deep trough to go through soon I think - but a 10 year view has never failed to reward.

Builders/Developers ONLY do deals they NEED to do - don't ever get the idea that they are doing a special deal because they are 'nice'!! They are doing deals because they HAVE to ...... and that means that the market is hard at the moment and they need to off-load property before the crash they can see coming.

All IMHO of course

Pete

Chip

Pete,
I dont for 1 minute think any builder is nice. The Apt in question was sold but buyers have backed out and its one of the last on a fine development so obviously they want to offload it asap.

Chip

pslewis

Buy it then .... it seems like an absolute steal!

Pete

Vegescoob

Some in the field say work your figures out based on 10 months let per year. A mate who has several properties has found letting unfurnished to be better.
Good insurance to cover lost rent etc a must if you are working on a tight budget.
All imho of course and lots of info out there. I think Consumers Association do a book.

fast bloke

Arrggghhhhhhh noooooooooooooooooooooooooo - <chokes on words>

I agree with Pete

<bleaches fingers>

as a long term investment(10-25 years) you probably can't go far wrong with property. Make sure you can afford the mortgage if you can't rent it for 6 months. If you don't need a mortgage, get one anyway, you get tax relief on the interest. You may be able to bung it into your pension 'fund' next year, attracting even more tax benefit

MattN

Have I missed something, the builder is going to give you £600 a month?

chris's scooby

I think on some developments where the builders aren't hitting their targets they're giving away monthly mortgage payments for two years or £600 per month cash back.

Oh and i can sort out tenant referencing and rent insurance if you need it!

lukey1

buy-to-let is good at the mo as the mortgages are fairly different,
So for those first time buyers they struggle to get a mortgage for the property value where as if you are buying to let you just need a 15% deposit and be able to show the rent will cover your payments.

Chip

Yes, that is correct.

Chip

Diesel

Chip lots of little useful tips and advice on this as I have been letting for many years. Time for that pint I think!

BIGGEST tip is MAXIMISE the mortgage on the let property - as once you have bought it you cant adjust purchase figures/mortgage interest for tax/CGT etc

D

PeeOne

Don't know if you've seen this site before, but www.housepricecrash.com has a lot of views and data about this subject. My personal view of buy to let is don't touch it with a barge pole at the moment. As has been said, builders and banks aren't there to be your friend. They aren't giving you special deals because they like you, its because its a bad investment and they know it. If the market was booming and they could forsee prices going up this year, do you think they would be offering you money off? In my view, stocks and shares present a far better place for your money at the moment. It is widely recognised even by the most bullish of property experts that the property market is likely to stagnate at best in the near future. What have you got to lose if prices aren't going anywhere? I would be very very carefull about BTL-great idea 5-10 years ago, not so good now!

NotoriousREV

PeeOne, your view is short-sighted. The developers are offering great deals because the market has slowed and they want to get shut quick. Developers are in it for the short term, they maximise their profit and get out as quick as possible. In this case, they're offering an incentive to offload unsold property.

At the same time, due to the vast slow down in Buy To Let applications, banks are starting to offer good deals on the mortgages. People are abandoning the market so they're offering incentives to try to entice some business back.

Take a long view and you can't lose. Try and make a profit in 5 years and you'll get stung, badly. I'd say now is a good time to start preparing for the next property boom due in ~10 years time

ricardo

We recently looked at a very palatial new flat which was up for £199,950. The developers (after a lot of negotiation) would take £179,000, plus they agreed to a leaseback of £1300 a month to use it as the show flat, for 8 months. Plus stamp duty paid.

We talked about not going through with it, and they increased the leaseback to a year, plus two years topup of £200 a month on the rent.

And we still decided not to do it, because there will be so many new flats round here, and real prices are sliding. If we'd gone ahead that flat would still show up with a selling price if 179k if anyone checked, so the true scale of the discount is hidden. They are desperate, which makes me suspicious...

Petem95

They obviously know the market has passed its peak, and now prices will fall for some years to come. IMO getting a BTL now would be a very bad move, youve seriously missed the boat on this one.

Theres better ways to invest your money, and its very likely you'll be able to buy significantly more property for less cash if you hang on. (Exactly what Im doing infact).

NotoriousREV

I think that depends on your area. If you live somewhere where house pricing is less volatile and below the average anyway, it's not a bad time to at least start looking. I know several people who already have 5+ houses in their portfolio and they're still buying here in the north-west.