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Apparently Kirstie Allsop and Phil Spencer will be on my new street this week filming some new property porn program. Anyone got any messages they would like me to pass on if I see them? :)

 

I'm even thinking of getting a "welcoming" banner to drape on the outside wall of my house. Any suggestions for a slogan? :)

 

Cheers

"Smaller is better; Time to Downsize."

(That's not only the wasteline, Kirstie.)

or:

"House prices never go down. Right, P&K ?"

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Is it crash cruise speed yet?

hpiuk2011nov.gif

 

Mo.: Rt'mov : London : Rest of UK %chg/ Nt'wide H-oldSA Halif.SA Hal.NSA: HNindex : mom : DelusIdx

2010

J. : : 222,261 : 407,731 : 131,918 - 0.42% / 163,481 169,777 168,390 165,514 : £164,497 :- 0.11% :135.1% :sa

F : : 229,398 : 427,987 : 128,801 - 2.36% / 161,320 166,857 166,928 165,997 : £163,659 :- 0.51% :140.2%

M : : 229,614 : 417,461 : 130,995 +1.70% / 164,519 168,521 168,435 167,808 : £166,164 :+1.53% :138.2%

A : : 235,512 : 421,822 : 135,058 +3.10% / 167,802 168,202 168,593 170,772 : £169,287 :+1.88% :139.1% :

M : : 237,134 : 420,203 : 134,739 - 0.24% / 169,162 167,570 167,207 169,204 : £169,183 :- 0.06% :140.2%

J. : : 237,767 : 429,597 : 133,097 - 1.22% / 170,111 166,203 165,686 166,395 : £168,253 :- 0.55% :140.5%

Jl : : 236,332 : 422,248 : 133,627 +0.40% / 169,347 167,425 167,497 168,331 : £168,839 :+0.35% :140.0%

A. : : 232,241 : 405,058 : 134,088 +0.35% / 166,507 = n/a = 168,124 168,889 : £167,698 :- 0.68% :138.5%

S. : : 229,767 : 399,019 : 132,880 - 0.90% / 166,757 = n/a = 161,974 163,639 : £165,198 :- 1.49% :139.1%

O : : 236,849 : 418,778 : 131,396 - 1.12% / 164,279 = n/a = 164,949 165,275 : £164,777 :- 0.25% :143.7% :H

N : : 229,379 : 417,279 : 128,245 - 2.40% / 163,133 = n/a = 164,622 163,268 : £163,201 :- 0.96% :140.5% :

D : : 222,410 : 408,248 : 127,473 - 0.60% / 162,249 = n/a = 162,803 161,498 : £161,874 :- 0.81% :137.4% :

2011

J. : : 223,122 : 413,259 : 127,148 - 0.25% / 161,211 = n/a = 164,145 161,470 : £161,341 :- 0.33% :138.3% :

F. : : 230,030 : 430,680 : 125,624 - 1.20% / 161,183 = n/a = 162,697 161,680 : £161,432 :+ 0.06% :142.5% :

M : : 231,790 : 424,307 : 127,160 +1.22% / 164,751 = n/a = 162,712 162,151 : £163,451 :+ 1.25% :141.8% :

A : : 235,822 : 431,013 : 127,721 +0.44% / 165,609 = n/a = 160,393 162,303 : £163,956 :+ 0.31% :143.8% :

M : : 238,874 : 430,936 : 128,189 +0.37% / 167,208 = n/a = 161,039 162,344 : £164,776 :+ 0.50% :145.0% :H

J. : : 240,394 : 438,622 : 128,965 +0.61% / 168,205 = n/a = 163,430 163,642 : £165,924 :+ 0.70% :144.9% :

Jl : : 236,597 : 432,641 : 129,766 +0.62% / 168,731 = n/a = 163,981 164,714 : £166,723 :+ 0.48% :141.9% :

A : : 231,543 : 418,008 : 12X,??? +0.??% / 165,914 = n/a = 161,743 162,076 : £163,995 : - 1.64% :141.2% :

S : : 233.139 : 427,889 : 12X,??? +0.??% / 166,256 = n/a = 161,132 162,375 : £164,316 : + 0.20% :141.9% :

O : : 239,672 : 450,210 : 12X,??? +0.??% / 165,650 = n/a = 163,311 164,311 : £164,981 : + 0.40% :145.3% :

N : : 232,144 : 444,724 : 12X,??? +0.??% / 165,798 = n/a = 161,731 160,801 : £163,300 : - 1.02% :142.2% :

========================================

mom: - 3.14% : - 1.22 % : -Est.DI : 142.2% / + 0.XX% = n/a = : -0.97% : -2.14% : - 1.02%

 

Maybe not yet.

So far, only "high delusion" (near 144-145%) is being corrected.

 

When the Delusion index slides below 140% or 137%, then more "fun" maybe be underway.

Watch London asking prices, when they start it crumbled, it is really over.

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Halifax peak: Oct 2007, £199,770

Current price: £161,731

 

Nominal price fall = 19.4%

 

 

YoY CPI Inflation:

Oct 2008 = 4.5

Oct 2009 = 1.5

Oct 2010 = 3.2

Oct 2011 = 5.0

Oct - Dec 2011 = 0.8%

 

Inflation

 

1 / (1.045 x 1.015 x 1.032 x 1.032 x 1.008) = 0.863

 

 

Real CPI-adjusted house fall prices since Oct 2007 = 80.96 * 0.863 = 69.8%

 

Halifax index has fallen 30.2% in real terms since the Oct 2007 peak.

 

 

Clearly, the effects of inflation are having more of an effect with each passing year, but if prices stay flat then even if inflation runs at 4% in future, it will take another 4 or 5 years for us to return to the long term averages.

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Halifax peak: Oct 2007, £199,770

Current price: £161,731

 

Nominal price fall = 19.4%

 

 

YoY CPI Inflation:

Oct 2008 = 4.5

Oct 2009 = 1.5

Oct 2010 = 3.2

Oct 2011 = 5.0

Oct - Dec 2011 = 0.8%

 

Inflation

 

1 / (1.045 x 1.015 x 1.032 x 1.032 x 1.008) = 0.863

 

 

Real CPI-adjusted house fall prices since Oct 2007 = 80.96 * 0.863 = 69.8%

 

Halifax index has fallen 30.2% in real terms since the Oct 2007 peak.

 

 

Clearly, the effects of inflation are having more of an effect with each passing year, but if prices stay flat then even if inflation runs at 4% in future, it will take another 4 or 5 years for us to return to the long term averages.

 

Thanks for running the numbers. I think the people who say "inflation adjust prices don't matter" are missing something. The continued underperformance of property as an inflation hedge will slowly erode the key pillar of property investment: "you can't go wrong with bricks and mortar".

 

Once it becomes clear property is an extremely poor inflation hedge this class of investor may move into precious metals and mining shares. This could still take years though, such is the entrenched perspective on property.

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Thanks for running the numbers. I think the people who say "inflation adjust prices don't matter" are missing something. The continued underperformance of property as an inflation hedge will slowly erode the key pillar of property investment: "you can't go wrong with bricks and mortar".

 

Once it becomes clear property is an extremely poor inflation hedge this class of investor may move into precious metals and mining shares. This could still take years though, such is the entrenched perspective on property.

 

I guess it depends how you look at it.

 

In inflationary or deflationary times, having a roof over your head is generally a necessity.

 

Owning a home outright is obviously a good hedge in both these cases.

 

In inflationary times, having a home with a fixed (low) rate mortgage could be seen as a good hedge, especially if inflation translates to larger pay rises (as it eventually always does, if the rate goes high enough).

 

As for investments, (and the class of investor you describe) then youre right. There are far better ways to hedge.

 

But simplistically, for the average Joe, bricks and mortar (owned) can be seen as a relatively safe bet through such times.

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READ THE CHARTS HERE ! (And examine the actual DATA): http://tinyurl.com/GEI-data

They whisper their messages to those who can decipher them, as we have done on GEI.

 

hpiuk2011nvcalls.gif

Close-up : H&N Index (average of Halifax & Nationwide) ..... Rightmove's Greater London Offering prices

ukhansm.jpg.ukgrlsm.jpg

 

The Rest of the UK (H&N Index, with Gr.London prices extracted)

ukruksm.jpg

=== === ===

 

Rest of the UK is now in Crash Cruise Speed, and should soon crash below GBP 120,000.

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I guess it depends how you look at it.

 

In inflationary or deflationary times, having a roof over your head is generally a necessity.

 

Owning a home outright is obviously a good hedge in both these cases.

 

In inflationary times, having a home with a fixed (low) rate mortgage could be seen as a good hedge, especially if inflation translates to larger pay rises (as it eventually always does, if the rate goes high enough).

 

As for investments, (and the class of investor you describe) then you’re right. There are far better ways to hedge.

 

But simplistically, for the average Joe, bricks and mortar (owned) can be seen as a relatively safe bet through such times.

 

Indeed, I'm just talking about investors, BTL hacks and second-home-is-my-pension types. As possible marginal price-setters right now I think they're pretty important to the market.

 

To own the roof over one's head has utility that I don't think you can easily measure in currency.

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But you can measure it in terms of income required to service the very real debt.

 

But if you are able to finance the very real debt for the long term at a much cheaper rate than the equivalent rent then it is likely to be a good investement. The Bank of England kept the base rates at 0.5% again today. How little of a surprise it was to the markets, and how little of a problem they have with it is shown by the pound rising nearly half a cent against the dollar in the following hour of trading.

There is certainly something for the HPCers to celebrate though, houses in the rest of the UK are now only slightly more expensive than they were eight years ago.

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Thanks for running the numbers. I think the people who say "inflation adjust prices don't matter" are missing something. The continued underperformance of property as an inflation hedge will slowly erode the key pillar of property investment: "you can't go wrong with bricks and mortar".

 

Once it becomes clear property is an extremely poor inflation hedge this class of investor may move into precious metals and mining shares. This could still take years though, such is the entrenched perspective on property.

I AGREE!

 

Property is:

+ Positively driven by rising rents (which in turn come from rising incomes), and

+ Negatively impacted by rising interest rates (which oft come from rising inflation)

 

So they are an imperfect inflation hedge

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I think it will be a cold day in hell before the average Joe thinks property is a bad investment. If, as an investor, you can hang on long enough - it will turn out to be a good investment.

 

If you bought a 200k 2 bed new build in Manchester that is now worth 100k, if you can wait 30 years, you'll be okay. The mortgage will be paid off and it will be worth - well, who knows, but, whatever it is worth, as a leveraged investment, bought with other people's money (their rent) - it will have been a good investment.

 

Given everything that has gone on to date, if my son said to me now - 'how shall I provide for my future - shall I buy a house to have as a home and buy another to sell when I get old and can't work anymore - or save whatever I can afford into a pension' - well, it is, as they say, a 'no brainer'. Is it not?

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I think it will be a cold day in hell before the average Joe thinks property is a bad investment. If, as an investor, you can hang on long enough - it will turn out to be a good investment.

 

If you bought a 200k 2 bed new build in Manchester that is now worth 100k, if you can wait 30 years, you'll be okay. The mortgage will be paid off and it will be worth - well, who knows, but, whatever it is worth, as a leveraged investment, bought with other people's money (their rent) - it will have been a good investment.

 

Given everything that has gone on to date, if my son said to me now - 'how shall I provide for my future - shall I buy a house to have as a home and buy another to sell when I get old and can't work anymore - or save whatever I can afford into a pension' - well, it is, as they say, a 'no brainer'. Is it not?

 

Or, prolonged economic depression could see the flat go unoccupied for a period or the whole building could be devalued through social decay or lack of maintenence. If the BTL investor cannot keep the plates in the air for the full 25 year term, the forced sale and negative equity will bankrupt them.

 

Just an alternave scenario :)

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Given everything that has gone on to date, if my son said to me now - 'how shall I provide for my future - shall I buy a house to have as a home and buy another to sell when I get old and can't work anymore - or save whatever I can afford into a pension' - well, it is, as they say, a 'no brainer'. Is it not?

Nope.

Not a no-brainer. More like a big-risker.

The world is changing, and the way we live and where we live - and certainly what people pay for rent may undergo very dramatic change in the future. Do you really think the next 2-3 decades will be anything like the last 2-3 decades ?

 

Think how incredibly stupid most Estate Agents are, and how very narrow they are in their way of thinking. Do you really want to rely on a thought process like theirs to determine your long-run financial future?

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Nope.

Not a no-brainer. More like a big-risker.The world is changing, and the way we live and where we live - and certainly what people pay for rent may undergo very dramatic change in the future.

So is giving your money to a pension fund to invest in mortgage debt and government debt etc

Do you really think the next 2-3 decades will be anything like the last 2-3 decades ?

No. For one thing, I don't think pension funds will be paying out money (sufficient that you can live on), in 10-20 years time. Not that I think buy to let is a slum dunk, but anything that allows you to retain control is better than easily broken promises for the future.

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Nope.

Not a no-brainer. More like a big-risker.

The world is changing, and the way we live and where we live - and certainly what people pay for rent may undergo very dramatic change in the future. Do you really think the next 2-3 decades will be anything like the last 2-3 decades ?

 

Think how incredibly stupid most Estate Agents are, and how very narrow they are in their way of thinking. Do you really want to rely on a thought process like theirs to determine your long-run financial future?

 

Well, I'm not really thinking about how Estate Agents think and act. I am not quite that stupid. I observe that throughout history property has had a value. In fact, the ownership of land and property is surely the (what's the right word?) absolute - ultimate - definitive - best way to store wealth.

 

If I had bought 3 houses in 1800 when I was 30, got other people to pay the rent, paid back the mortgages - what position would I be in in say 1840.

Ditto 1900.

Ditto 2000.

 

And if I'd hung on to them and passed them on to my children - and they'd hung on to them and passed them on to their children ...

 

Sure the future is going to be different from the past - but if someone gave me 3 houses now, I'd be as happy as Larry and could immediately retire and live on the rent that two of them would produce. At what point in the future do your foresee that owning two houses and renting out would be a bad idea?

 

 

People own commercial premises for generations - lease after lease - upward only rent reviews - an endless stream of unearned income.

 

You got something better?

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Well, I'm not really thinking about how Estate Agents think and act. I am not quite that stupid. I observe that throughout history property has had a value. In fact, the ownership of land and property is surely the (what's the right word?) absolute - ultimate - definitive - best way to store wealth.

 

If I had bought 3 houses in 1800 when I was 30, got other people to pay the rent, paid back the mortgages - what position would I be in in say 1840.

Ditto 1900.

Ditto 2000.

 

And if I'd hung on to them and passed them on to my children - and they'd hung on to them and passed them on to their children ...

 

Sure the future is going to be different from the past - but if someone gave me 3 houses now, I'd be as happy as Larry and could immediately retire and live on the rent that two of them would produce. At what point in the future do your foresee that owning two houses and renting out would be a bad idea?

 

 

People own commercial premises for generations - lease after lease - upward only rent reviews - an endless stream of unearned income.

 

You got something better?

 

Property owned outright and property you've got a BTL mortgage on are different animals though. One will hold some value in the long term, the other could bankrupt you. You're making the assumption that everything will go smoothly with your three houses for the entire duration of the mortgage term. I think this is wishful thinking at best and to quote Chris Martenson, "the next 20 years will be nothing like the previous 20 years". Could the leverage involved see a problem with one property turn into a problem with your entire portfolio?

 

And 'executive' apartments in city centres based on old economic paradigms may not hold their value in the way land and property values have been traditionally considered to do so.

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Property owned outright and property you've got a BTL mortgage on are different animals though. One will hold some value in the long term, the other could bankrupt you. You're making the assumption that everything will go smoothly with your three houses for the entire duration of the mortgage term. I think this is wishful thinking at best and to quote Chris Martenson, "the next 20 years will be nothing like the previous 20 years". Could the leverage involved see a problem with one property turn into a problem with your entire portfolio?

 

And 'executive' apartments in city centres based on old economic paradigms may not hold their value in the way land and property values have been traditionally considered to do so.

So what about, say, if you had a £200K lump sum from, say, inheritance?

 

A good friend of mine is in that situation and they are keen to buy a property outright to rent out. They're looking at a nice low-maintenance flat aimed at young professionals in London, say zone 2-3.

 

In supersimplistic terms they think believe they can rent out such a place for £1000 a month, so if buying for £200K they figure that's a 6% yield. I verify this having rented these kinds of places myself, for that kind of rent, in the particular area my friend is looking at. I think my friend is seeing me as a potential customer!!

 

They've not had or needed the £200K before, so its liquidity is not of huge necessity to them. In fact the opposite would be true, as they've been asking me how secure the banks are. Yeah, asking me!! LOL, as if I know anything - but they know of my economy/politics nerdiness. But of course I've told them about the max £85K savings protection limit per institution and warned them about multiple brands belonging to one Group e.g. Marks and Spencer being HSBC.

 

I've suggested investing in other stuff but they're just not interested: not only are they saying they wouldn't know where to start, but there's a genuine (sensible!!) fear that they would lose money and potentially swiftly. A fool and their money, and all that...

 

They are super-keen to protect their newly-gotten wealth, and whilst it might seem paradoxical to chuck the money into what can be seen currently to be a depreciating asset, the sheer "realness" of a property.

 

My friend has slight ethical concerns (but only slight!) about the idea of landlords pushing out FTBs, but reasons this is London and there will always be a market for young professionals who don't plan to be in London forever. My friend also rented for a few years so kind of has a "what goes around comes around" sort of philosphy. Relatively unconcerned about the plight of the youth.....

 

Because of an outright purchase, voids periods are not really a concern.

 

So my friend is in a interestingly fortuitous situation to have this much capital to invest. I am genuinely at a loss as to how to challenge the apparent straightforwardness of their proposition. So here I am asking a (usually pretty friendly) bunch of strangers on the internet! ;-)

 

Seriously I would be interested to see what people think, seeing as you're (presumably??!) more experienced in handling larger lumps of capital than Joe Average like me.

 

Thanks

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So what about, say, if you had a £200K lump sum from, say, inheritance?

 

A good friend of mine is in that situation and they are keen to buy a property outright to rent out. They're looking at a nice low-maintenance flat aimed at young professionals in London, say zone 2-3.

 

In supersimplistic terms they think believe they can rent out such a place for £1000 a month, so if buying for £200K they figure that's a 6% yield. I verify this having rented these kinds of places myself, for that kind of rent, in the particular area my friend is looking at. I think my friend is seeing me as a potential customer!!

 

They've not had or needed the £200K before, so its liquidity is not of huge necessity to them. In fact the opposite would be true, as they've been asking me how secure the banks are. Yeah, asking me!! LOL, as if I know anything - but they know of my economy/politics nerdiness. But of course I've told them about the max £85K savings protection limit per institution and warned them about multiple brands belonging to one Group e.g. Marks and Spencer being HSBC.

 

I've suggested investing in other stuff but they're just not interested: not only are they saying they wouldn't know where to start, but there's a genuine (sensible!!) fear that they would lose money and potentially swiftly. A fool and their money, and all that...

 

They are super-keen to protect their newly-gotten wealth, and whilst it might seem paradoxical to chuck the money into what can be seen currently to be a depreciating asset, the sheer "realness" of a property.

 

My friend has slight ethical concerns (but only slight!) about the idea of landlords pushing out FTBs, but reasons this is London and there will always be a market for young professionals who don't plan to be in London forever. My friend also rented for a few years so kind of has a "what goes around comes around" sort of philosphy. Relatively unconcerned about the plight of the youth.....

 

Because of an outright purchase, voids periods are not really a concern.

 

So my friend is in a interestingly fortuitous situation to have this much capital to invest. I am genuinely at a loss as to how to challenge the apparent straightforwardness of their proposition. So here I am asking a (usually pretty friendly) bunch of strangers on the internet! ;-)

 

Seriously I would be interested to see what people think, seeing as you're (presumably??!) more experienced in handling larger lumps of capital than Joe Average like me.

 

Thanks

 

Sounds like a great idea, in this particular circumstance.

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Property owned outright and property you've got a BTL mortgage on are different animals though. One will hold some value in the long term, the other could bankrupt you. You're making the assumption that everything will go smoothly with your three houses for the entire duration of the mortgage term. I think this is wishful thinking at best and to quote Chris Martenson, "the next 20 years will be nothing like the previous 20 years". Could the leverage involved see a problem with one property turn into a problem with your entire portfolio?

 

Everything you say is true. But, equally, a lot of people own, or part own, more than one property whose mortgage is being paid off by tenants. If they make it through to the 25 years - and the property becomes theirs - they are in an enviable position - are they not? I'm not a big, closet fan of BTL - but if I had a few hundred grand at my disposal now - I'd probably buy a house and take a grand a month rent. I'd leave it in my will to my kids and drum into them that they are to keep it all their lives.

 

And 'executive' apartments in city centres based on old economic paradigms may not hold their value in the way land and property values have been traditionally considered to do so.

 

Property and land have not held value in the way they have been 'traditionally considered' to. They have, by any measure, been a great investment for a long, long time. I'm not a big fan of the BTL ethos - one person paying off another person's mortgage - but if you accept that there will always be a need for rented property - well, as I have said, it's a good way to get out from under.

 

If I had bought a few properties 30 years ago - as I get close to retirement age now - I'd be laughing. As it is, I'll be working until I drop.

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So what about, say, if you had a £200K lump sum from, say, inheritance?

 

A good friend of mine is in that situation and they are keen to buy a property outright to rent out. They're looking at a nice low-maintenance flat aimed at young professionals in London, say zone 2-3.

 

In supersimplistic terms they think believe they can rent out such a place for £1000 a month, so if buying for £200K they figure that's a 6% yield. I verify this having rented these kinds of places myself, for that kind of rent, in the particular area my friend is looking at. I think my friend is seeing me as a potential customer!!

 

They've not had or needed the £200K before, so its liquidity is not of huge necessity to them. In fact the opposite would be true, as they've been asking me how secure the banks are. Yeah, asking me!! LOL, as if I know anything - but they know of my economy/politics nerdiness. But of course I've told them about the max £85K savings protection limit per institution and warned them about multiple brands belonging to one Group e.g. Marks and Spencer being HSBC.

 

I've suggested investing in other stuff but they're just not interested: not only are they saying they wouldn't know where to start, but there's a genuine (sensible!!) fear that they would lose money and potentially swiftly. A fool and their money, and all that...

 

They are super-keen to protect their newly-gotten wealth, and whilst it might seem paradoxical to chuck the money into what can be seen currently to be a depreciating asset, the sheer "realness" of a property.

 

My friend has slight ethical concerns (but only slight!) about the idea of landlords pushing out FTBs, but reasons this is London and there will always be a market for young professionals who don't plan to be in London forever. My friend also rented for a few years so kind of has a "what goes around comes around" sort of philosphy. Relatively unconcerned about the plight of the youth.....

 

Because of an outright purchase, voids periods are not really a concern.

 

So my friend is in a interestingly fortuitous situation to have this much capital to invest. I am genuinely at a loss as to how to challenge the apparent straightforwardness of their proposition. So here I am asking a (usually pretty friendly) bunch of strangers on the internet! ;-)

 

Seriously I would be interested to see what people think, seeing as you're (presumably??!) more experienced in handling larger lumps of capital than Joe Average like me.

 

Thanks

 

I'd buy a property with it.

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Come on guys, you know it isn't that easy.

 

A 6% yield will probably be something more like 4 - 4.5% once service charges, repairs, voids, are taken in.

Add £4k in buying costs.

 

and don't kid yourself that yield doesn't matter whether you are buying with cash or not; would you still buy it if it was returning 1%? Of course not, you'd stick your money in a bank as the return on your investment would be lousy.

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Don't put all your eggs in one basket.

 

Split it all up:

 

Investment Trusts - look at Personal Assets Trust (ticker PNL). Up 10% this year (plus a divi yield).

 

PMs

 

EMs Large cap boring firms - oil, utililites, big retailers. These firms own us, we need them.

 

Landlording is like farming, nothing but worry! Especially the livestock. Time consuming if you self manage, ripped off if managed. Highly illiquid.

 

Buy some dollars, as sterling looks weak and feeble.

 

Buy some very nice rare things - clocks, watches, art - always a demand for this by the one percenters. Makes sure it's small, forget cars and big furntiture.

 

Good luck!

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Come on guys, you know it isn't that easy.

 

A 6% yield will probably be something more like 4 - 4.5% once service charges, repairs, voids, are taken in.

Add £4k in buying costs.

 

and don't kid yourself that yield doesn't matter whether you are buying with cash or not; would you still buy it if it was returning 1%? Of course not, you'd stick your money in a bank as the return on your investment would be lousy.

 

I've got no experience investing 200K, let alone buying a property, so I can't really comment on Testicle's circumstances. However I do rent a flat on a nice London street and probably fit into your friend's target demographic. I think your caution is very relevant.

 

I bet the letting agent rip the landlord off every year on the contract renewal for a start. God knows what their cut was when we moved in. Nice old townhouses in nice areas need an incredible amount of maintenance too. The wiring is old so you get electrical problems, for one. The various flat owners collectively seem to continuously spend a fortune on renovating the interior and exterior of the building. I've had plumbers round on a number of occasions to fix boiler and washing machine issues. Wear and tear has required some form of interior renovation each year I've lived here. Communal areas are cleaned every weekend. The landlord even has to pay for the plants and boxes on our balcony that we replace every year.

 

It must all add up! Funny how you never hear all this from the MSM property rampers. Combine this with some well-timed negotiations from myself in 2009 when things looked scary and I've no idea how the landlord would be making any money without ZIRP.

 

Obviously the main benefit of a nice Zone 2 area is the chance of voids must be close to zero.

 

With limited prospects for capital appreciation and a questionable real yield, I'm not sure I would accept the opportunity cost at this point. For Testicle's friend maybe prime London property makes a lot of sense long-term. But I would also note that £200k doesn't buy you prime London! So is he willing to mortgage up?

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...a lot of people own, or part own, more than one property whose mortgage is being paid off by tenants...

This is very emotive language that doesn't really describe the situation at all, but has been used an awful lot in the last decade.

 

If a landlord can fund an asset for less than the tenant, don't both sides benefit? If the landlord wants to take on risks that the tenant doesn't, don't both sides benefit? If a landlord can provide access to an asset that the tenant can't because they have no security to offer to obtain a mortgage, don't both sides benefit?

 

It's often portrayed as a very one-sided relationship, but that's not always the case. Haven't landlords sheltered many of our younger generations from the capital losses we've seen everywhere but London in the last few years?

 

Why does this phrase never get used for commercial buildings?

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