Ponty
pfm Member
On a place of mine, the SVR is 7.49% which is (fortunately) fully offset. The yield is circa 3%. For a landlord with a lumpy debt, you can do the math….
Housing market
- Thread starter matt j
- Start date
On a place of mine, the SVR is 7.49% which is (fortunately) fully offset. The yield is circa 3%. For a landlord with a lumpy debt, you can do the math….
The rental market here has gone bonkers, it cannot last. Houses come on the market, are sold to landlords out of the area, a quick slap n dash refurb, back on the market weeks later at astronomical rates.
Yes indeed but you're in the SE where the asset goes up 7% + pa. Buy a street of BTLs in Grimsby for the price of one flat in London, you'll pick up 10% return on every one you let, but 10 years on they'll still be worth 9/10 of fxxk all.
As ever capital growth offsets rental revenue.
Ponty
pfm Member
The cash still needs to be found every month to pay the big mortgages in the SE, that’s the pressure point hurtling down the line for many.
andyoz
pfm Member
I'd say a row of cheaper stuff with that yield will be the place to be with the crap coming down the line in the over heated markets.
Yes, it's a different model and too many people have historically thought that they could rent out a place for £600, mortgage of £500, guaranteed return of £100 a month, until a tenant defaults or leaves, then they don't have any reserve.
Ponty
pfm Member
Yep, underpinned by housing benefit.
Ponty
pfm Member
Or their mortgage payment doubles….
I currently have a void on a place. It would rent in a matter of hours but it’s my choice because a previous tenant who lived there wants to return. They looked after it very well so happy to suck it up. Better the devil you know and all that.
mandryka
pfm Member
The reality is that in that situation you just whack the rent up. If T doesn't like it you get rid. It'll take time, but with a level head it's mostly doable. And the more businesslike landlords will have taken out insurance against defaults and will have made sure that they can use an accelerated eviction procedure. The bottom line is that the losers aren't the landlords, or at least, not the sensible ones. It's the low rent tenants -- they'll just have to move to a less expensive part of the world or less salubrious accommodation I guess.
By the way, I know it's not really your point but I just searched for residential lettings for £600 within 20 miles of where I live -- Wimbledon. That radius goes into some not particularly stylish neighbourhoods -- like Tolworth and deepest Croydon. The only things are rooms in HMOs.
mandryka
pfm Member
It'll come down because the country needs private landlords. I wouldn't be surprised if it comes down in 2024 before the election.
clivem2
pfm Member
And up even more after the next election…?
Ponty
pfm Member
Trouble is, if they whack it up even further, folks such as me will never, ever sell.
They don't need you to sell if you keep renting it. And you aren't going to stop renting it and let it sit empty while you pick up the charges, are you?
Ponty
pfm Member
The govt hate small landlords though and are doing everything in their power to make it unattractive, to enter, participate and even exit the market! It will be fascinating to see what labour do, assuming they win. My hunch is whatever they try will be trumped by the law of unintended consequences.
