Buy to lets

I know this is a bit OT but I am about to exchange contracts on my first buy to let property in the next 3 weeks and im getting cold feet.
I have re-mortgaged my house to release the equity to pay for this its something I have always wanted to do.
Due to the turmoil in the housing and finance market I am beginning to question my judgment and timing Is anyone on this forum in this business that could offer advice.
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Don't!
MBQ
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On Thu, 08 Nov 2007 05:06:50 -0800, Man at B&Q

Encouraging just like the knowledgeable service you get at B&Q
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Phil Gardner wrote:

He's right though. Read up about financial bubbles. They are a perfectly natural phenomenon, that has been around for thousands of years. We are currently in the middle of such a bubble, and you are about to buy just before it bursts.
--
Grunff

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A housing bubble? No. There is still a shortage of housing. In certain housing segments things may be difficult. BTL is one, overall no.
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I never use 100 words when one will do ;-)
MBQ
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Look at it short term and run a mile!..
Look at it long term .. and yep, good as investment as any.
I reckon that the UK housing market will wobble quite a bit as its well over priced and has been that way for a long time.
And I suppose you have done your homework about the times when you don't have any tenants and allowed for maintenance costs etc...
--
Tony Sayer




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tony sayer wrote:

Historically a slightly worst investment than average actually.
A stock market tracker over the same period would have done better.

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The Natural Philosopher wrote:

Which is probably true. It is surprising therefore that if you go into a bank and ask to borrow 200k to buy a buy-to-let they won't bat an eyelid. Go in and ask to borrow 200k to invest in a FTSE100 tracker and you might get a different response.
The reason that people have made such a profit over the last ten years is not just the general rise in prices but the fact that a lot of that investment has been leveraged. But just as that is an advantage in a rising market is is a _big_ problem in a falling market.
In the long term it doesn't matter if property underperforms the stock market slightly. If three-quarters of your investment is coming from the bank your profit is increased four-fold.
Andrew
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Primary residence as collateral?

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Andy Hall wrote:

Oh, I am sure you could do it but I think that any financial adviser would be far more concerned with making sure it was documented that they had pointed out the potential downsides than they would it it was BTL.
Andrew
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.. and with zero input of effort, which is not free.
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Well in Cambridge ... you know that place.. Of silly prices...;)...
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Tony Sayer



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Phil Gardner wrote:

Just make sure you vet your tenants properly ;-)
<http://www.harrowtimes.co.uk/news/localnews/display.var.1767060.0.cannabis_factory_raided.php
--
Adrian C

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www.housepricecrash.co.uk
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http://www.freedeliveryuk.co.uk

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Beware! That place is a support group for the dispossessed, not a place for rational analysis of the housing market. A considerable number of them sold up in 2003 and have been calling a crash everyday since. I'd put about as much credence on their opinions as I would on Foxtons.
PWC produce monthly roundups of the whole British Economy which are pretty comprehensive, and rather better informed. Latest one is here, see pp.22-26 on the housing market. Their "central" prediction is slow growth. Their worst-case (5% probability) scenario is not a disaster. http://www.pwc.co.uk/pdf/uk_economic_download_nov07.pdf
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House prices aren't the only issue here though. You also have to consider the rental returns (which are suffereing) and whether your money would be better somewhere else.
MBQ
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Fair point, although even small capital growth can more than make up for mediocre rental returns. Also I'd steer well clear of city centre 2 bed "luxury apartments". These are notoriously overpriced, you're competing with every other landlord in the block to get them let, and they've been falling in value while the rest of the market has boomed.
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On Thu, 08 Nov 2007 07:38:49 -0800, Anita Palley wrote:

People do well to remember that a brand new dwelling has about a 20% mark up over a >10 year home. It escapes me why people should want to buy something that is going to take a certain amount of snagging (hassle if not cost) just to have everything new but perhaps not as practical/durable as needed.
--
Ed Sirett - Property maintainer and registered gas fitter.
The FAQ for uk.diy is at http://www.diyfaq.org.uk
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Ed Sirett wrote:

And in the short term may actually lose value. It will cease to be a shiny new house quite quickly, and builders will be building shinier newer houses all the time. People may realise the houses were overpriced to start with.
> It escapes me why people should want to buy

New houses can come with lots of problems, some minor, some not so (if your builder forgot to use wall ties).
I know they're usually execrably styled, but the 1970s were probably fairly good for houses. Fairly up to date compared to current building regs, room and plot sizes usually reasonable compared to new build. They can look shabby, but a quick makeover of kitchen and bathroom and a repaint can turn them round. Also they're often on nice mature estates with some trees.
Owain
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