From: "tim" <520010973502.removethis@t-online.de>
Newsgroups: uk.finance
Subject: Re: House Prices to Plunge 40% (for Sam)
Date: Sat, 9 Oct 2004 00:57:42 +0200


"Richard Faulkner"  wrote in message 
news:Di97QdM5l+ZBFw1b@estate.demon.co.uk...
> In message , tim 
> <520010973502.removethis@t-online.de> writes
>>

>>Agreed, but ISTM that this is what many are being 'fooled' into doing.
>>
>>
> I note the inverted comments, and could suggest that they actually fool 
> themselves into buying these things.

This is kind of what I meant.  They are being fooled into believing
that they are easily rentable for a 7% yield.  In some cases they
are promised a 7% yield as part of the sales agreement (the builder
pays them the difference for the first 2 years but that is instead of
the 'normal' offers available on new builds).  I know they are doing
this as, as a know local potential 'investor', I have had the sales pitch.
I declined.  To get this yield you have to pitch your rent right at the
top of the range for the area (1200 pm instead of 750 for my older
property).

I bet none of the buyers who have signed up have actually looked
at the local rental market and asked "what demand could there
possibly be for top end rental properties".  The first of these new
blocks was finished some years ago and did command premimum
rents at that level, so this is what they see when they look in the
agency windows.  But that block was just a small percentage of the
total available stock, when all these new blocks are finished 50% of
the available 2 bed stock will be looking for premium rentals and
IMHO tenants just aren't going to be there, BICBW!

tim