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Sutton? Mitcham? I said mediocre. Not s**thole! Even then, £300k is buying you about a 600 sqft shoebox.
Thats no use to a couple in their 30’s with kids. Probably ok for someone in their early 20’s. So you can probably cut that £35k salary down to £25k. Then try the maths.
say £50k gross income for a couple. Bank will loan you between £150-200k where’s the other £100-150k coming from? Got to be about about well over ten years savings, by which time that couple in their twenties is now in their thirties, want a family and the 600 sqft shoebox is no longer fit for purpose.
if you can’t see that cost of housing is way out of whack and has a long way to fall now BTL is shrinking and mortgage lending rule for owner occupiers is being enforced then it’s because you’re wilfully not wanting to see it
God as a NE Landlord I find the London prices eye watering
If landlords have purchased Property for 425k in London and have a small yield how will they ever afford S24 ????
what sort of rent would a 425k property have
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.
Well, in Wimbledon where I live, a 650sqft first floor flat (terrace conversion) has just gone on the market advertised at £490k. An identical flat a couple of doors down the road rents at £1350 pcm.
£16,200 gross annual rent
£490,000 gross house cost
Gross yield 3.3%
Assume LL puts down 25% deposit and lends £367,500 @ 3.5% interest only. That’s £12,862 mortgage interest on the debt vs £16,200 gross cash flow. So prior to S24 that would generate £3,338 per annum net cash flow prior to any expenses (maintenance, letting fees, voids, etc etc)
Post S24 for a higher rate taxpayer assuming £1k annual deductible expenses:
£16,200 - £1k = £15,200 taxable income @ 40%
£9,720 post tax income + 20% refund (£3,240)
= £12,960 vs mortgage interest of £12,862
So barely wipes its face at 3.5% interest rates...assuming those workings are accurate.
Wow that is shocking in my opinion with low capital growth it’s just not worth doing
in 1985 i lived in Cheshire street Bethnal Green where the film 1984 was partly filmed as well as many other films, this road was gritty to say the least but good fun.
this was before gentification and if you look on the internet you can see pictures from this era when people still lived in absolute poverty in this street
My Girlfriend now wife rented in Wimbledon, when we came to buy in 1987, 2 years after university with professional jobs we could only afford to buy in Mitcham and lived there for 10 years
Wimbledon has never been a place where a working man could afford to buy without assistance from parents or inheritance, nothing has changed in this time. not even the snobbery towards Mitcham
Chartered Accountant, FCA 34th year in public practice,
BTL since 1992
I think £1350 is very poor. The flats I rent which are valued in the £400-£425k range achieve a monthly rental of £1500
Sutton? Mitcham? I said mediocre. Not s**thole!
Thats no use to a couple in their 30’s with kids
Population of LB of Sutton 202,000 A Rightmove study in 2015 found that Sutton was the fourth happiest borough in which to live out of 33 in London. It achieved the same placing in the 2016 survey.
All insulted in 1 fell swoop. maybe you should change your avatar to Donald Trump, Solzhenitsyn is not really appropriate for you
You can buy 3 bed houses for £330k in this borough where people flock to live as it has the best schools in London
A Trust for London and New Policy Institute report noted that Sutton had the highest rate in London of pupils achieving 5 A* – C GCSEs.[
This is not an echo chamber for virtue signalling, statements made need to be accurate, but hey why let the truth get in the way of a good story
Just did a RM search in Sutton for 3 bed terrace houses.
£325-350k - 2 properties
£350-400k - 17 properties
£400-450k - 55 properties
£450-500k - 59 properties
£500-550k - 24 properties
£550-600k - 17 properties
£600-650k - 7 properties
£650-700k - 4 properties
so as you can see there are very few 3 bed terrace houses for sale at around £325k (just 2). The median would sit somewhere in the £450k area. Again run the numbers from my first post for a couple each earning median salary of £35k - this is pretty generous given one spouse will likely work part time. The numbers just don’t stack up. New MMR lending rules will (and are starting to) crucify London.
BTL has definitely been supporting / bidding up prices in many areas. I walk down a street in Balham / Tooting / Wimbledon and at least 50% of the houses in many streets are BTL
Move to an area like Balham/Tooting which are also traditional working class areas and the numbers are much much worse. Think £800k for a 3 bed terrace!
Spot on again
BTL pushes up prices and stops FTB getting on the ladder
If not why do investors invest in property
Here’s an idea. Move to somewhere like Manchester and buy a 4 bed detached with 2 garages and garden in a postcode voted constantly in the top 20 places to live in the UK for the same money.
Countryside on doorstep, City 1/2 hr away. Lake District 1 and a 1/4 hrs away.