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I'm curious as to your vehement response to this question.
I offer the following as an alternative (area variances acknowledged).
There is still a shortage of property.
Rental prices are growing at pace.
Property prices are increasing.
Cost of finance is low.
Savings products offer low interest.
Diversified Mutual Funds are not 'knocking the lights out'.
If a property investment, leveraged at 75%LTV, assuming 3%pa capital growth, can offer 20% ROCE, what is the better alternative?
New properties being built all the time, look at certain areas where no over supply. Also what is being built is expensive relative to current incomes. Rental prices will drop as rent controls come in. Property prices are increasing- what plant are you on. Financial cost is low but not for long as governments will be forced to move rates up- thats the problem many fail to realize, as currencies come under pressure , inflation will rise ( debt problems - governments unable to repay therefore will inflate , reduces debt in real terms.) With economies collapsing over the next 12/18 months governments will be forced to raid people savings. ( can happen in various ways.remember they have all ready done it £617m from miners last year, and caps on amounts going into pensions so less tax refunds on pension payments.) Diversified funds going short and those long will get hit by stocks etx falling. Being leveraged in this environment is financial suicide, banks and lending institutions will be forced to cut back and increase margin requirements. ( happening already) And you still want to be long property and increase exposure to the sector.
Whilst new properties are being built, not nearly enough are being built, so still a lack of housing, something that will not change anytime soon.
Expensive homes lead to renting not purchasing?
IF rent controls come in they MAY impact certain areas, but plenty of areas have rent to earnings ratios way below the threshold limits for imposition of rent controls.
I assume you mean what planet, I'm based in the Frozen Wastelands of the North, where many have enjoyed 20+% house price growth in the past 3 years.
Interest rates will increase, but still low relative to average long term rates.
Boris about to increase threshold for higher rate tax to £80k, already increased to £50k?
CGT remains at 18%, for now, but not increased.
A repeal of George Osbourne's legacy would of course be great, but unlikely to happen any time soon.
I may be looking through rose tinted glasses, but suspect they skew the picture no more than your cynicism does.
I agree that one can be too leveraged and many people are, thankfully i'm not one of them.
I take Data from Lenders with a big pinch of salt
they have a vested interest in saying what they say
I just look at whats been sold what it has achieved and use my own data
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
Slowly working towards financial freedom
All that for £43.50 per week. You risk is much greater than you think. No rent or tenant hassle, property prices falling.
Plus equity growth of course
Problem is Steve, equity growth is about to disappear faster than a rat down a hole .