advertisement


Housing market

At 5% yield the 500k property is earning 25k pa. House prices aren't down the last 12 months so now you're at 525k property v 520k cash. But no one buys a house to let for a year and over the long term property is going to do better than cash unless you're exceptionally unfortunate with the timing. Otherwise who would ever buy property to let?

No chance of a 5% yield for me. More like 2-3. A lot less hassle and risk to earn 4.5% on cash on fixed deposit. Totally agree that long term, chances are you’ll be fine. I’d beg to differ that prices aren’t down over the past 12 months. Friends on the market in decent areas have seen viewings evaporate. If they want to actually sell, at least 15% off I reckon.
 
Yet my recent experience is that eating out in Spain and Madeira is much better value / less expensive than the U.K., their other costs presumably being lower.

Was referring to supermarket prices (and anecdotes from various friends around Europe).
 
Was referring to supermarket prices (and anecdotes from various friends around Europe).
Yes, I understood that. The comments triggered thoughts that there should be some relationship between the cost of the raw materials and the cost of meals when eating out. Is it down to other costs or are we being fleeced?
 
No chance of a 5% yield for me. More like 2-3. A lot less hassle and risk to earn 4.5% on cash on fixed deposit. Totally agree that long term, chances are you’ll be fine. I’d beg to differ that prices aren’t down over the past 12 months. Friends on the market in decent areas have seen viewings evaporate. If they want to actually sell, at least 15% off I reckon.

I'm sure there's a lot of regional variation. 2-3% is certainly not attractive, but hasn't London been around that for a while?
 
I'm sure there's a lot of regional variation. 2-3% is certainly not attractive, but hasn't London been around that for a while?

I am pretty sure I could get 4% to 5% in Morden, South Wimbledon and possibly Tooting too on an investment of around half a million. 450K for a two bedroom place, 1800 - 2200 rent.
 
Last edited:
Yes, I understood that. The comments triggered thoughts that there should be some relationship between the cost of the raw materials and the cost of meals when eating out. Is it down to other costs or are we being fleeced?
Labour and property overheads will make up over half and maybe 2/3 of meal costs. That's why the restaurant trade runs at a rule of thumb of dish cost = 3x-4x ingredient cost in the UK. Probably more in London, it needs to be.
 
Yes, I understood that. The comments triggered thoughts that there should be some relationship between the cost of the raw materials and the cost of meals when eating out. Is it down to other costs or are we being fleeced?

Can't really comment on the mainland but here many think the food industry is in need of reform.
 
I'm sure there's a lot of regional variation. 2-3% is certainly not attractive, but hasn't London been around that for a while?

IMHO, as a general rule, the ‘better’ the area, the lower the yield. That’s often offset by capital growth but that’s taxable so no point being crystallised. I honestly can’t see why landlords would enter the market now in the SE, particularly if leveraged. If the numbers don’t stack up for landlords and first time buyers can’t afford current asking prices, that means values are only going one way.
 
Can't really comment on the mainland but here many think the food industry is in need of reform.
What bit of it, and in what way? Relationships with farmers, catering and hospitality, or the old chestnut about it being the food industry s fault that people are fat? (Solution - put down the £3 tub of ice cream and buy a bag of apples, a bag of oranges, and a bunch of bananas for less instead.)
 
IMHO, as a general rule, the ‘better’ the area, the lower the yield. That’s often offset by capital growth but that’s taxable so no point being crystallised. I honestly can’t see why landlords would enter the market now in the SE, particularly if leveraged. If the numbers don’t stack up for landlords and first time buyers can’t afford current asking prices, that means values are only going one way.


Well I'm not convinced. Look, here's a get rich quick plan for free.

1. Buy this for cash preferably -- let's say for the asking price of £450K. IT looks very lettable now to me, I don't know if it has an EICR. I know exactly where it is and it is well located for lettings. There will be a demand from good quality prospective tenants.

2 bedroom flat for sale in Kingston Road, Wimbledon, SW19 (rightmove.co.uk)

2. Rent it for £1800 a month. You may get much more in fact. I wouldn't be surprised if there are offers of £2K

That's at least £21K on an investment of, let's say £450 + £5K to cover tenanting costs and bits of work. That's not 5% but it's close and I may have been underestimating the achievable rent. If it's not 5% this year it'll be 5% next year as long as the rentals market remains uncontrolled. And because of the location (outstanding for transport, you are 5 minutes from the Northern Line, 15 minutes from the District Line and British Rail to Waterloo, 10 minutes from the A3, close enough to St George's hospital . . . ) the capital value will grow too.

I would do it myself but . . . well no buts actually . . . I'm just too lazy! And anyway I've tied away the money into bonds so it'll take a bit of ingenuity to make it happen.
 
Well I'm not convinced. Look, here's a get rich quick plan for free.

1. Buy this for cash preferably -- let's say for the asking price of £450K. IT looks very lettable now to me, I don't know if it has an EICR. I know exactly where it is and it is well located for lettings. There will be a demand from good quality prospective tenants.

2 bedroom flat for sale in Kingston Road, Wimbledon, SW19 (rightmove.co.uk)

2. Rent it for £1800 a month. You may get much more in fact. I wouldn't be surprised if there are offers of £2K

That's at least £21K on an investment of, let's say £450 + £5K to cover tenanting costs and bits of work. That's not 5% but it's close and I may have been underestimating the achievable rent. If it's not 5% this year it'll be 5% next year as long as the rentals market remains uncontrolled. And because of the location (outstanding for transport, you are 5 minutes from the Northern Line, 15 minutes from the District Line and British Rail to Waterloo, 10 minutes from the A3, close enough to St George's hospital . . . ) the capital value will grow too.

I would do it myself but . . . well no buts actually . . . I'm just too lazy! And anyway I've tied away the money into bonds so it'll take a bit of ingenuity to make it happen.

How about:

Legals (say £2K), stamp duty (at additional rate) of £23,500.
Too far from me so would need a managing agent. 10% + VAT = 12% of rent.
Repairs / maintenance
General tenant hassle and agro (may be lucky, may not be)
Non payment of rent (may be lucky, may not be).
Insurance
Boiler service and cert
Govt continuing to make it a hostile environment for small landlords, increasing taxes etc.

Nah, I’ll take a 4.5% bond, same as you. If folks like us can’t be bothered, who’s going to pick up the slack if first time buyers can’t afford it?
 
Just poking my head in to say that we are planning to start looking for our first house in a few weeks, not as an investment but simply as a home for our family. Wish me luck. This thread terrifies me.
I wish anyone taking this step now good luck. Having bought my first house in 1979 and second in 1987 I caught both on a rapidly rising market and watched prices plummet soon after (thanks Maggie). I was lucky and never had to sell up and am now mortgage free, hopefully you will do at least as well. My daughter bought her first home a little over 18 months ago. Although the value is almost flat her mortgage is less than rent would be.
 
Just poking my head in to say that we are planning to start looking for our first house in a few weeks, not as an investment but simply as a home for our family. Wish me luck. This thread terrifies me.

Very best of luck. I know they are devils spawn, but make friends with local agents. Don’t rely on Rightmove etc. No chain and finances in place makes you a plum buyer in this market. There are a lot of kite flyers around. It may sound obvious but you need to find a seller who actually wants / needs to sell (as well as it being a house you want to buy of course).
 
How about:

Legals (say £2K), stamp duty (at additional rate) of £23,500.
Too far from me so would need a managing agent. 10% + VAT = 12% of rent.
Repairs / maintenance
General tenant hassle and agro (may be lucky, may not be)
Non payment of rent (may be lucky, may not be).
Insurance
Boiler service and cert
Govt continuing to make it a hostile environment for small landlords, increasing taxes etc.

Nah, I’ll take a 4.5% bond, same as you. If folks like us can’t be bothered, who’s going to pick up the slack if first time buyers can’t afford it?

one good thing ... its epc c i think
 
Just poking my head in to say that we are planning to start looking for our first house in a few weeks, not as an investment but simply as a home for our family. Wish me luck. This thread terrifies me.

ah dont be terrified . we will help you !!! time to buy is now without the craziness of past 2 years . ringing up to see a house to be told 50 people are wanting to view so dont bother !!
 


advertisement


Back
Top