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[aaronjb]

If you have savings where do you put them?

I was recently talking to a sensible decent estate agent, who told me the following if you have about £100k to invest.

The local authorities allow around £1,000 per month for housing a single mum with child. So,landlords are happy to charge that £1,000 per month. Buy a cheap flat in a not-so-good area of London for around £100k or even less. Et voila a 10% gross return, get a management company to deal with everything for you. Better than a building society or whatever. The property is unlikely to increase in value much, but still remains as a saleable asset.

Since I was first told this, I have found quite a few people who actually do it, very profitably. Now where's that odd £100k I had lying around . . . . . ?   

I would be amazed if you could  buy any type of flat anywhere in London for £100k.

Rightmove seems to suggest there are a few - probably in places I wouldn't want to drive through, let alone live, though and I've no idea how large it's idea of 'London' is: http://www.rightmove.co.uk/property-for-sale/find.html?searchType=SALE&locationIdentifier=REGION%5E87490&insId=3&radius=0.0&displayPropertyType=flats&minBedrooms=1&maxBedrooms=&minPrice=&maxPrice=100000&retirement=&partBuyPartRent=false&maxDaysSinceAdded=&_includeSSTC=on&sortByPriceDescending=&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=flats&oldPrimaryDisplayPropertyType=&newHome=&auction=false

[Kevin Wood]

Went to a big new development in Bicester, show homes I thought felt really small. The 5 bedroom ones cost around £500k, the living room was tiny! Maybe fit 2 x 2 seater sofa + TV at best, seriously small.

Then look at the main build areas, and its a concrete jungle, houses squeezed in, some had balcony's looking out basically onto the giant car parks behind the houses 

Once filled up with cars, 3 bins per household its going to be a sight and smell to see 

That's why I much prefer older houses, 1920's to 1960's ish, decent sized rooms, with high ceilings and decent garden.

Yep, they have just built umpteen 4 and 5 bedroom houses on an old garage forecourt near me. 5 bedroom places have a parking space and a garage, the rest have pretty much 1 parking spot per house, as far as I can see. No storage for bins at all. The development is so packed-in that the bin lorry has to pull over outside, blocking an A road, while the crew run all over the development looking for bins. 

Surely a typical 4 bedroom house is going to have a 2 car family plus a 3rd car for a teenage kid before you consider people coming to visit, etc. Developments like this seem to get rubber-stamped by central government even if the local planning guys object, as it fits in line with the government's "pile the peasants high" central planning policy.

[Sir Tigger KC]

Bear in mind Rog that your 'sensible decent estate agent' ultimately wants to sell you a property, so will paint a rosy picture of being a landlord!   

There are areas of the UK where you can achieve 10% and more on your investment, however I have my doubts whether you can in London, the South East or the South in general....    The high yielding properties will generally be in run down, neglected and deprived areas, where the properties are cheap and the risk of bad tenants is higher.  The risk/return ratio is just as important in property investment as it is in stocks and shares! 

Managing agents are fine when it comes to collecting the rent and charging their commission, but when it comes to dealing with a bad tenant they generally are useless beyond writing a letter or two....    The other thing with agents is when you need repairs done they will often charge 10% of the cost as a management fee so there is no incentive for them to get a decent price for the work.  I had a quote of £1000 from an agent once for a roof repair and when I told him I'd find my own roofer he magically found another who did the work for £500! 

I've rented to a few single Mum's over the years and in my experience the girls are usually OK.  It's the arsehole blokes that they hang around with that cause the problems in terms of antisocial behaviour, damage to the property and rent arrears cause they've spent their girlfriends rent money on booze and drugs etc etc 

Property investment can be a good way to make money, but it is far from hassle free!! 

[aaronjb]

Yep, they have just built umpteen 4 and 5 bedroom houses on an old garage forecourt near me. 5 bedroom places have a parking space and a garage, the rest have pretty much 1 parking spot per house, as far as I can see. No storage for bins at all. The development is so packed-in that the bin lorry has to pull over outside, blocking an A road, while the crew run all over the development looking for bins. 

I wonder if the amount of development near you is in any way related to this article .. or, rather, if this article was in any way paid for by a developer - http://www.dailymail.co.uk/money/mortgageshome/article-2387600/The-hidden-gem-towns-trade-bigger-property.html

Alton, Hampshire
This market town is an hour from London Waterloo by rail. An average-sized four-bedroom property is £415,763, while in better known Farnham, nine miles away, it rises to £636,708, says home.co.uk.
Adam Masters, at Hamptons International, Alton, says: ‘There are fantastic schools such as Lord Wandsworth, Eggars, Amery Hill and Alton College.’
Hamptons has

Be prepared for a sudden inrush of Mail readers, Kevin..

[Rog]

Bear in mind Rog that your 'sensible decent estate agent' ultimately wants to sell you a property, so will paint a rosy picture of being a landlord!   

There are areas of the UK where you can achieve 10% and more on your investment, however I have my doubts whether you can in London, the South East or the South in general....    The high yielding properties will generally be in run down, neglected and deprived areas, where the properties are cheap and the risk of bad tenants is higher.  The risk/return ratio is just as important in property investment as it is in stocks and shares! 

Managing agents are fine when it comes to collecting the rent and charging their commission, but when it comes to dealing with a bad tenant they generally are useless beyond writing a letter or two....    The other thing with agents is when you need repairs done they will often charge 10% of the cost as a management fee so there is no incentive for them to get a decent price for the work.  I had a quote of £1000 from an agent once for a roof repair and when I told him I'd find my own roofer he magically found another who did the work for £500! 

I've rented to a few single Mum's over the years and in my experience the girls are usually OK.  It's the arsehole blokes that they hang around with that cause the problems in terms of antisocial behaviour, damage to the property and rent arrears cause they've spent their girlfriends rent money on booze and drugs etc etc 

Property investment can be a good way to make money, but it is far from hassle free!! 

Yes of course, and absolutely understood, but I try to keeps things short.

Some authorities now pay the landlord or the agent direct for exactly the reasons you state.

An interesting thing is that in my area the rental income is the about same for a nice flat in a nice area with good professional tentants as it is for some s%^&hole in a crap area with DSS tenants. The difference for the landlord is that the first property costs at least £200+ the second costs £100k or even less.

[Kevin Wood]

Yep, they have just built umpteen 4 and 5 bedroom houses on an old garage forecourt near me. 5 bedroom places have a parking space and a garage, the rest have pretty much 1 parking spot per house, as far as I can see. No storage for bins at all. The development is so packed-in that the bin lorry has to pull over outside, blocking an A road, while the crew run all over the development looking for bins. 

I wonder if the amount of development near you is in any way related to this article .. or, rather, if this article was in any way paid for by a developer - http://www.dailymail.co.uk/money/mortgageshome/article-2387600/The-hidden-gem-towns-trade-bigger-property.html

Alton, Hampshire
This market town is an hour from London Waterloo by rail. An average-sized four-bedroom property is £415,763, while in better known Farnham, nine miles away, it rises to £636,708, says home.co.uk.
Adam Masters, at Hamptons International, Alton, says: ‘There are fantastic schools such as Lord Wandsworth, Eggars, Amery Hill and Alton College.’
Hamptons has

Be prepared for a sudden inrush of Mail readers, Kevin..

Gawd'elp us! Send them to Huntingdon.

Alton, Hampshire

This market town is an hour from London Waterloo by rail.

They haven't experienced South West trains' service very recently, then. More like an hour and a half now, although it was comfortably under the hour back in the late '90's. Progress, you see.

Hamptons has a four-bedroom home in Ings Close for £489,950.

No they don't. Do you think they mean Maltings Close?

Still, if it sells a few papers...

[Rog]

I would be amazed if you could  buy any type of flat anywhere in London for £100k.

You certainly can, but you would not want to voluntarily live in it   

[aaronjb]

They haven't experienced South West trains' service very recently, then. More like an hour and a half now, although it was comfortably under the hour back in the late '90's. Progress, you see.

An hour and a half, you say? Then all the underground travel once you're there. Must be wonderful having a three hour commute if you're travelling in to the smoke, eh! Rather them than me.

Although if there was space for a double garage, I'd actually quite like this property: http://www.rightmove.co.uk/property-for-sale/property-26980005.html

Though it seems like anywhere worth moving for would be well outside my price range (unless Amy gets a serious pay hike from minimum wage ).. Like this or this

[Rog]

That's why I much prefer older houses, 1920's to 1960's ish, decent sized rooms, with high ceilings and decent garden.

Me too. My current house just put up for sale is quite new, built around 1905, the one I want to buy is not so new, built around 1870 ish 

[Rods2]

Went to a big new development in Bicester, show homes I thought felt really small. The 5 bedroom ones cost around £500k, the living room was tiny! Maybe fit 2 x 2 seater sofa + TV at best, seriously small.

Then look at the main build areas, and its a concrete jungle, houses squeezed in, some had balcony's looking out basically onto the giant car parks behind the houses 

Once filled up with cars, 3 bins per household its going to be a sight and smell to see 

That's why I much prefer older houses, 1920's to 1960's ish, decent sized rooms, with high ceilings and decent garden.

Yep, they have just built umpteen 4 and 5 bedroom houses on an old garage forecourt near me. 5 bedroom places have a parking space and a garage, the rest have pretty much 1 parking spot per house, as far as I can see. No storage for bins at all. The development is so packed-in that the bin lorry has to pull over outside, blocking an A road, while the crew run all over the development looking for bins. 

Surely a typical 4 bedroom house is going to have a 2 car family plus a 3rd car for a teenage kid before you consider people coming to visit, etc. Developments like this seem to get rubber-stamped by central government even if the local planning guys object, as it fits in line with the government's "pile the peasants high" central planning policy.

Blame two jags as he changed the planning rules so developers only need to cater for one car. It is all part of the last government's war on the motorist and climate change policies. Developers can also develop estates where cars are banned and there are no parking spaces! 

After seeing the hassles my daughter has where she lives on an estate with this, I would NEVER buy a flat, apartment or house with only one allocated parking space.

[Kevin Wood]

They haven't experienced South West trains' service very recently, then. More like an hour and a half now, although it was comfortably under the hour back in the late '90's. Progress, you see.

An hour and a half, you say? Then all the underground travel once you're there. Must be wonderful having a three hour commute if you're travelling in to the smoke, eh! Rather them than me.

Although if there was space for a double garage, I'd actually quite like this property: http://www.rightmove.co.uk/property-for-sale/property-26980005.html

Though it seems like anywhere worth moving for would be well outside my price range (unless Amy gets a serious pay hike from minimum wage ).. Like this or this

I used to live in a bungalow up the road from the house in the last link. It has been on the market for a while, and I can see why now.

I moved out of Alton to Four Marks due to the lack price of houses with double garages.

[Varche]

If you have savings where do you put them?

1. Inflation for the past few years has been running at an average of 2% above the 2% target. This has now been loosened to 2.5% in Carnage Carney's BOE report, which suggests 4.5% inflation.

2. Interest from banks is in the 0.25-0.5% range pre-tax, so their value is going to drop by at least 4% a year. The Government through ZIPR and high inflation are stealing the value of your savings.

3. Gilts - Market rigged by the Government with QE. Once QE is withdrawn or in the US even a hint of reducing it then the price drops as the market is less rigged. When they drop you make losses, plus they currently pay between 2 and 3%, so the Government is stealing by stealth the value of your money.

4. Equities are overbought and there will be a market correction in the not too distant future, probably on the back of more bad Eurozone news. The PE ratio is currently far too high this suggests a correction in the order of about 25%. Again all that QE money has created and inflated the bubble so another rigged market.

5. Gold, this is currently dropping, but if you do have a punt make sure it is real physical gold, not a worthless piece of paper saying you are entitled to x amount of gold. Physical gold is ALWAYS more expensive than paper gold. Where Germany has asked for its gold back from the US it is going to take them 7 years to get it back. The rumour is that is has been leant out as this is a way for banks / central banks to make money from it. So will there be a shortage and the price goes up again, who knows?

6. UK Property, personally I think this is one of the better prospects at the moment. With an expected 5% per year house price inflation, buying your first house or trading up to a larger one or purchasing a BTL as part of a pension plan, may be a good move. I was going to sell my house as part of moving to the Ukraine, but I'm now looking at renting it. Where I live there is a shortage of property, so prices are going up and normally a house will rent in under 5 days from being placed on the market. The Government is relying on rising house prices and economic growth to provide a 2015 feel good election victory. Many people think house prices are about 25% too high, but I think with the norm of 2 working in a couple / family home this has changed the amount that they can borrow and supply and demand is well and truly on the demand side at the moment.

7. Pensions unless you are a higher rate tax payer then after Gordon Brown's tax raid on them and the high fees then they are IMHO probably a bad investment. In my view I made a big mistake putting a lot of money into various pensions when I was young and much richer, I did almost in the early 1990's buy 2 BTL properties which is what I should have done. They would be worth far more in capital and income terms than my pension will be. Personally, these days I would rather pay the tax and be free to invest the money where I want to rather than it being locked into a pension fund with much less flexibility. 1-1.5% may not seem like much in the way of fees per year on your pension, but over 40 years it is a considerable  part of your pension pot, especially when investment funds are static or dropping, like we have had over the last 13 years in the UK.

These are just my personal thoughts, so please don't consider them any sort of investment advice, as they are not. You need to decide your own investment strategy and take appropriate professional advice.

8. Collection. I think there will be good money to be made collecting something not in vogue. Antiques are done to death. Stamps? Old cars (Omegas)? Mopeds, Postcards. ideally something that you are going to enjoy collecting and seeing around cluttering up your house for 30 years!

[Field Marshal Dr. Opti]

That's why I much prefer older houses, 1920's to 1960's ish, decent sized rooms, with high ceilings and decent garden.

Me too. My current house just put up for sale is quite new, built around 1905, the one I want to buy is not so new, built around 1870 ish 

1905....Edwardian

1870....Victorian.

[Rog]

That's why I much prefer older houses, 1920's to 1960's ish, decent sized rooms, with high ceilings and decent garden.

Me too. My current house just put up for sale is quite new, built around 1905, the one I want to buy is not so new, built around 1870 ish 

1905....Edwardian

1870....Victorian.

I see things as follows

1905....Edwardian - Hasn't cost too much in the 18 years we've lived there   

1870....Victorian. - Going to cost a fortune in repairs etc before even moving in !   

 . . . I know, it's my choice I don't have to buy it, but I will, providing repair costs are reflected in purchase price.  Who knows about wall stitching ? I'd never heard of it, but I certainly have now

[aaronjb]

Who knows about wall stitching ? I'd never heard of it, but I certainly have now

Is it in any way related to fence crochet?