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I've ran the numbers on similar situations before and I can't see how an average rental in London makes any profit unless you bought it 10 years ago or have already paid off the mortgage. I see online people mentioning 6% yield rates but no way that can happen if you buy somewhere new. For example
Lewisham, 2 bed flat in a Georgian terrace, with 5.5% buy to let mortgage is £1797 a month.
https://www.rightmove.co.uk/properties/125674835
A very similar 2 bed flat to rent a couple of streets away is £1800.
https://www.zoopla.co.uk/to-rent/details/61651959My point is landlords are scum but people trying to buy in to it now are extra stupid scum.
Sumo-
I've ran the numbers on similar situations before and I can't see how an average rental in London makes any profit unless you bought it 10 years ago or have already paid off the mortgage
Completely agree - in full knowledge that I am headed to the golf club thread I almost became an 'accidental landlord' a few years ago when my sister moved out of our flat. I did the maths and at best it is a low-cost option on long-term capital growth, i.e. zero yield but your costs are just about covered when you have a tenant in.
The thing is, there is a huge swathe of the boomer population that doesn't trust the IFA / asset management community, doesn't understand the equity market and believes that property is the only safe place for your pension over the long term. Given the number of investment scandals in the 80s and 90s (Allied Dunbar, Equitable Life, endowment mortgages etc etc), as well as the performance of property over that time period (particularly the golden years of BTL under Blair) I do understand it.
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Are you not making 1800 a month in profit by someone else paying your mortgage even at 0% yield, just into an asset not cash? I accept there is some cost to maintaining the property everywhere but you're essentially taking on debt for someone else to service?
NickCJ
kkg337
My heart bleeds for some of the people the FT interviewed