Sell you house with ASDA - free HIP!

[Mike Halmarack]

Considering that the majority of crashes have been "complete surprises", the best way to ensure that house prices keep climbing is to expect one.

[Grunff]

As would your 4.5% interest on a savings account.

But that's the flaw right there - what you're saying is that to make it a worthwhile investment, you are relying on the value of the stock to rise. This is fundamentally unsound for any type of stock. The return that a stock provides should not be contingent upon future increase in the value of the stock.

I would expect a higher yield, or I would not invest in that company :-)

I would say that in order for buy-to-let property to be at the right value to make a good investment it would need to provide a return of

6-7%. This means it would be slightly outperforming a savings account, and paying for the maintenance. There are very few properties that you can buy today in the UK which will provide you with that return.

[Mark]

Exactly. They just want to sell as many houses as quick as possible. Advising on work done would reduce their chances of taking it on.

Mark

[Mark]

There still seems to be plently of property developers and landlords buying at present - in my neck of the woods, at least.

Mark

[Tony Bryer]

Why is it fundamentally unsound? 3% from a company that has every likelihood of growing year on year is much better than 10% from a company that is going downhill.

[Grunff]

Not what I meant. The value of an asset, be it stocks, property, or anything else, should only reflect the current return available from the asset, and not any possible future growth in the value of the asset.

In other words, if an asset is increasing in value purely because people believe that it will continue to increase in value (and not because it is providing a higher return) then it is not a sustainable situation.

[Richard Faulkner]

I tried it for a while, a very nice and helpful general guide, with an offer of more help if desired.... some people thought I was being rude about their houses and gave them to agents who told them what they wanted to hear.

As an estate agent, you cant win, whatever you do....

[meow2222]

But where will that correction come, reduction in house prices or increase in rents? The rental market is being flooded by novice landlords encouraged by gushing do-up-and-rent programs, but this is a (tv program) marketing bubble that will burst as more and more people notice that the ideal promoted by said programs is simply ballcocks.

So which will it be, and why? I would think rents have to increase, property values I dont know.

NT