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  • Property Prices

    Thoughts on the old chestnut - capital growth

    also the fiscal drag factor of investor stamp duty, you are no longer 'piggybacking' on your own business risk, now the government/HMRC is piggybacking on you. In fact the extra SD is not even piggybacking, it is cash taken upfront before you even got any business rolling to give anyone a ride
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    Agreed - stiffer headwinds for new BTL purchases - esp in SE.

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    I just look at facts and my view is the old ways are gone

    There is very good reason for PRA regs  some folk just dont understand thats things have moved on

    and PRA regs have bigger effect on the SE than any other area

    not to mention stamp duty and S24

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    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.

    Nothing wrong with that approach, I would disagree with some of your assertions about future capital growth however.

    Firstly, we're an island and secondly our population is growing at a staggering speed. Whilst we have in theory sufficient land to meet population growth a lot of it is green belt and rightly should stay so, but that means that property prices will inevitably continue on an upward trend with pauses as wages try and catch up.

    However such growth doesn't not guarantee property investing will remain as profitable, especially with the current environment of unstable government and increasingly hostile socialist policies which have failed elsewhere such as rent controls and excessive taxation. 

    I guess until we have a clear picture of what the economy is going to be like post Brexit and a stable moderate government it's anyone's guess. If we get an extremist Corbyn government, then of course we'll be in for a rough ride with mass unemployment and hyperinflation.
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    If we were to see higher growth rates it would need easier lending and inflation

    I dont think Govt wants high property inflation as it helps only the ones that own property now

    The Political situation is an odd one and we have not been here before

    This is the very reason I have used my strategy only factoring in a low growth rate

    I have opted for caution going for long term fixed rates and a good strong yield which I have to say is getting harder to find !

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    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.

    In nominal terms UK wage growth has halved in each decade since the peak in 1970s when wages rose by around 17% cagr - though today's mortgage rates are around 1/3rd of the average for the 30 yrs to 2000.

    Mortgages remain constrained at an absolute max of around 4.5 x salary - and thus slow wage growth means prices are also constrained.

    Nationally CML say FTBs borrow just 3.11 x salary (£38k) with a 17%/£24k deposit so pay average £142000.

    Meanwhile the general hike in SDLT rates is persuading many home owners to extend rather than move - so there are then fewer of the smaller cheaper properties for others looking to trade up.

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    I am not sure why so much negative comments coming from DL (not referring to this post only..) I would say- if u not feeling safe- drop LL business and start investing in something else..

    There is no point talk about something what actually not even happening.. Its all about planning ahead and adapting your business model for future changes..

    Yes crisis is coming, yes government will change but so intelligent LL will change too.. Its better to do something rather do nothing..
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    I have a reputation of being negative

    If i was negative I would not be planning to buy more property !

    I know I have changed my thinking on BTL

    We have seen a Govt who has made things much harder now to make wealth

    I'm still in the race just riding my horse in a different way

    I know my Profits are rising year on year as my Tax Bills show so I am doing something right

    BTL is changing and we have to change too ...

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    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.


    From reading many of DL's posts I can see where you are coming from, but to me DL is not negative.

    DL just has a different perspective, mainly one of caution.  Newer landlords, probably won't follow DL's advice, or at least can't if they want to grow a portfolio faster.

    I'm glad DL doesn't just paint the same rosy picture that other optimistic landlords have about the future of BTL.  We all need to show some caution, we are dealing with vast sums of money.  It all depends how much risk you are willing to accept.
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    Risk The Govt have introduced PRA regs because of risk

    I have noticed in my own personal property holdings that when I am doing a deal Lenders like to see around 60% LTV to play the game

    I can fully understand new Landlords needing to leverage up to the Max but they are pushing the Risk too

    when baby turtles are born not all make it to the sea

    Your more vulnerable with the higher LTV

    The NE Landlord will support what my view is because we have experience of low capital growth

    its a lesson the SE landlord has yet to learn




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    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.