RetireJapan

Not intending to get political here, but as far as the analysis of the future of buy-to-let and investing in housing in general, it's hard to avoid.

Sybil wrote: ↑Mon Sep 09, 2019 7:42 am Any good investor would take into account how political changes might change the investment environment. Any person thinking of buying to let should take into the account the policies of the main political parties if they announce drastic changes with regards to it. The comments I have quoted are the general consensus of the experts in the field of buy to let.

It's worth considering that their opinions are very strongly motivated by personal interest. And of course they're absolutely right that the proposed changes would massacre the buy-to-let market. The guy claiming it'll result in a shortage of rental properties is just fear-mongering to keep his business running.

Personally I have no plans to buy to let because I do see change coming. I think that the idea the uk opposition have is going to be catching on in many places. Property prices have soared up faster than incomes have, while at the same time we consider shelter a human right. With more and more youth unable to own their homes and getting bilked harder and harder by investors there has to be change eventually. Property prices can't keep going up 5-6% an year when incomes don't match it and birth rates are dropping resulting in decreased demand. People have slowly been pushing past the age old wisdom of "no more than 1/3 of your income to rent/mortgage", and we are seeing people at 40-50%, but there is a breaking point where it can go no higher unless incomes suddenly magically increase. I just can't see any way that this works, and the UK opposition is just trying to get ahead of the inevitable reckoning before it blows up in our face(as to whether this is the best solution, I am unsure).

This whole thing feels like a ticking time bomb, 2008 was just the first warning, but it's back to business as usual. I've left REITs out of my portfolio because of this and am still wrestling with renting vs buying(probably sticking to renting).

One final note on buy-to-let: since it's everything in one baggie, it's the very opposite of diversification, and it has extremely high fees(stamp fees/taxes etc). I'd really say that if you want to be in property, invest in REIT's, unless owning the house is somewhat of a hobby for you or you are confident you can manage it for cheaper(remember, finding tenants etc takes time).

jcc wrote: ↑Thu Oct 31, 2019 1:28 am Not intending to get political here, but as far as the analysis of the future of buy-to-let and investing in housing in general, it's hard to avoid.


I think that the idea the uk opposition have is going to be catching on in many places. Property prices have soared up faster than incomes have, while at the same time we consider shelter a human right. With more and more youth unable to own their homes and getting bilked harder and harder by investors there has to be change eventually. Property prices can't keep going up 5-6% an year when incomes don't match it and birth rates are dropping resulting in decreased demand. People have slowly been pushing past the age old wisdom of "no more than 1/3 of your income to rent/mortgage", and we are seeing people at 40-50%, but there is a breaking point where it can go no higher unless incomes suddenly magically increase. I just can't see any way that this works, and the UK opposition is just trying to get ahead of the inevitable reckoning before it blows up in our face(as to whether this is the best solution, I am unsure).

This whole thing feels like a ticking time bomb, 2008 was just the first warning, but it's back to business as usual. I've left REITs out of my portfolio because of this and am still wrestling with renting vs buying(probably sticking to renting).

One final note on buy-to-let: since it's everything in one baggie, it's the very opposite of diversification, and it has extremely high fees(stamp fees/taxes etc). I'd really say that if you want to be in property, invest in REIT's, unless owning the house is somewhat of a hobby for you or you are confident you can manage it for cheaper(remember, finding tenants etc takes time).

You do realize that for the past 15 years the net population increase in the UK is about 300,000 annually. What do you think happens when an extra 5 million plus people appear on a crowded island?

If you read the news, 'the UK opposition' as you call them intend to make immigration easier so expect 'more and more youth unable to own their homes'.

Sybil wrote: ↑Thu Oct 31, 2019 4:15 am

jcc wrote: ↑Thu Oct 31, 2019 1:28 am Not intending to get political here, but as far as the analysis of the future of buy-to-let and investing in housing in general, it's hard to avoid.


I think that the idea the uk opposition have is going to be catching on in many places. Property prices have soared up faster than incomes have, while at the same time we consider shelter a human right. With more and more youth unable to own their homes and getting bilked harder and harder by investors there has to be change eventually. Property prices can't keep going up 5-6% an year when incomes don't match it and birth rates are dropping resulting in decreased demand. People have slowly been pushing past the age old wisdom of "no more than 1/3 of your income to rent/mortgage", and we are seeing people at 40-50%, but there is a breaking point where it can go no higher unless incomes suddenly magically increase. I just can't see any way that this works, and the UK opposition is just trying to get ahead of the inevitable reckoning before it blows up in our face(as to whether this is the best solution, I am unsure).

This whole thing feels like a ticking time bomb, 2008 was just the first warning, but it's back to business as usual. I've left REITs out of my portfolio because of this and am still wrestling with renting vs buying(probably sticking to renting).

One final note on buy-to-let: since it's everything in one baggie, it's the very opposite of diversification, and it has extremely high fees(stamp fees/taxes etc). I'd really say that if you want to be in property, invest in REIT's, unless owning the house is somewhat of a hobby for you or you are confident you can manage it for cheaper(remember, finding tenants etc takes time).

You do realize that for the past 15 years the net population increase in the UK is about 300,000 annually. What do you think happens when an extra 5 million plus people appear on a crowded island?

If you read the news, 'the UK opposition' as you call them intend to make immigration easier so expect 'more and more youth unable to own their homes'.

I would rather have my population going up by 300,000 people rather than going down by 300,000 people as it is in Japan. It is why I have more confidence in the British state pension than the Japanese state pension. Yes immigration plays a role in the increasing population, but it also an increasing birth rate- a big positive and people living longer. However, at the end of the day in relation to housing it is a question of supply and demand. There is just not enough supply of affordable housing in the UK whether it be start homes or council housing. Build, Baby, Build!!!!

Wales4rugbyWC19 wrote: ↑Fri Nov 01, 2019 2:35 am
I would rather have my population going up by 300,000 people rather than going down by 300,000 people as it is in Japan. It is why I have more confidence in the British state pension than the Japanese state pension. Yes immigration plays a role in the increasing population, but it also an increasing birth rate- a big positive and people living longer. However, at the end of the day in relation to housing it is a question of supply and demand. There is just not enough supply of affordable housing in the UK whether it be start homes or council housing. Build, Baby, Build!!!!

The population density in the UK is the highest in Europe. There isn't enough suitable building land hence the high prices of housing compared to wages. As a society, the UK can decide to reduce immigration so housing becomes more affordable. Or continue as present and house prices will continue to spiral out of control even as the last green spaces are concreted over.

By the way, the immigrants will eventually need pensions and health care as they get old. I guess you would propose importing another 20 million immigrants to cover their costs.

In Japan, the GDP might decline in the future. But the quality of life will improve as cities become less crowded and housing will be more affordable.

Sybil wrote: ↑Fri Nov 01, 2019 6:50 am

Wales4rugbyWC19 wrote: ↑Fri Nov 01, 2019 2:35 am
I would rather have my population going up by 300,000 people rather than going down by 300,000 people as it is in Japan. It is why I have more confidence in the British state pension than the Japanese state pension. Yes immigration plays a role in the increasing population, but it also an increasing birth rate- a big positive and people living longer. However, at the end of the day in relation to housing it is a question of supply and demand. There is just not enough supply of affordable housing in the UK whether it be start homes or council housing. Build, Baby, Build!!!!

The population density in the UK is the highest in Europe. There isn't enough suitable building land hence the high prices of housing compared to wages. As a society, the UK can decide to reduce immigration so housing becomes more affordable. Or continue as present and house prices will continue to spiral out of control even as the last green spaces are concreted over.

By the way, the immigrants will eventually need pensions and health care as they get old. I guess you would propose importing another 20 million immigrants to cover their costs.

In Japan, the GDP might decline in the future. But the quality of life will improve as cities become less crowded and housing will be more affordable.

I am currently living in one of those urban areas that is experiencing one of the most rapid declines in populations (Kitakyushu), on the whole it is rural areas that have experienced population declines, and believe me, it is not nice. I have been living here for two decades, falling populations gutter out the whole of society from closing nursery schools, merged schools, covered markets with almost all the shops having their shutters down. It is not for trying from the local city council who have ploughed a lot of money, a lot of it wasted trying to get people to come and live in Kitakyushu. It's current idea is 'U-turn' to try and get people to come back and live here. We even have a summer festival called 'a one million' festival our determination to keep the population up above that number, even though it has just gone below that number. Needless to say there is a building boom for old people's homes, but all these need to be supported by the younger generation through their labour or their taxes.

As for pensions, The UK state pension went up by 3.9% last year because of the triple lock, this is because of average earnings going up. The Japanese state pension on the other hand has just stayed the same for the last three decades. The younger more vibrant (yes more immigrants) UK labour force allows us to be able to afford to pay this more generous state pension, while Japan continues to be bedevilled by the three deadly Ds demographics, debt and deflation.

And I think we're getting political again. Let's wrap this tangent up here please

Yeah, my intention was to make a general commentary on the precarious future of buying to let, not on politics, and I'm a bit disappointed that it was completely ignored that and a political angle was taken. So let me rephrase without any political background(which really isn't that relevant anyway)

The math really isn't that complicated: we have gone from buying with savings to 10 year loans, 20 year loans and now 35 year loans to allow for people to stay within that "1/3 of your income" to be spent on housing rule. An increasing number of people are breaking the rule, using 40-50% of their income on their mortgage or rent.

If income doesn't go up lockstep with rent/mortgages(and thus result in inflation), eventually we will reach a point where any form of property based investment simple will not return anywhere near what we have been seeing to date. Unless we start seeing multi-generational loans(which sounds really sketchy to me)

Which is why I think that regardless of politics, buy to let is doomed in the long term. When exactly the market breaks, I have no idea, but I think it's something worth seriously considering when looking at your investment plan.

Wales4rugbyWC19 wrote: ↑Sun Oct 13, 2019 8:22 am
I go through a mortgage broker who specialises is expat mortgages. His company is called international mortgages. He is based in Weybridge in Surrey.

This is great info, thanks. This is something I REALLY want to find a way to do. However when I put your info into Google "international mortgages" is such a generic term I can't find his company. If you have a moment can you let me know his contact, website or anything.

BTW, notice your handle. I was at the Wales vs Uruguay game ... In happier days.

eyeswideshut wrote: ↑Tue Sep 10, 2019 2:41 am he had a devil of a time getting a mortgage being a non-resident. He ultimately got one with a regional credit union thanks to diligent searching by his mortgage broker.

Yes, I've tried over the years never had any luck. If you know it, can u share name of the credit union and broker? Thanks in advance

KyushuWoozy wrote: ↑Thu Nov 07, 2019 4:06 am

Wales4rugbyWC19 wrote: ↑Sun Oct 13, 2019 8:22 am
I go through a mortgage broker who specialises is expat mortgages. His company is called international mortgages. He is based in Weybridge in Surrey.

This is great info, thanks. This is something I REALLY want to find a way to do. However when I put your info into Google "international mortgages" is such a generic term I can't find his company. If you have a moment can you let me know his contact, website or anything.

BTW, notice your handle. I was at the Wales vs Uruguay game ... In happier days.

Sorry I should have given you his we address https://www.international-mortgage-plans.com/ If you want some more info, mail me. I am going through a second buy to let and the pace is glacial with all the documents you need.

I took my son to the Wales vs Fiji in Oita- great game even though they were 4 yellow cards. Funny to think the last rugby world cup game I went to was in 1991 Wales vs Australia; Wales were thrashed 38 vs 3. How times have changed!!!