What are your thoughts on the UK housing market?

[2be]

I can get a rental yield of over 8.0% in a desirable up and coming area .... Is this that bad, particularly given cash in the bank earns so little interest?

Hi Spreader,
The answer to your question is not that simple, as it relates to the risk/reward ratio.

Lets say that one owns the property and do not have any mortgage on it, then I would say the risk factor is eliminated, one might have smaller or larger returnes, but the ownership of the property is securred, 8% return in that scenario is good (though conservative), especially if it is a part of the overall strategy of spreading the invested capital.
The second scenario is less favourable, and that is if one owns less then 30% as positive equity. Any increase in the interest is likely to eat at the profit, and if one gets a wrong type of tenant, (belive me it does happen!) it might and will diminish considerably the otherwise 8% profit. In that case 8% profit( I mean gross income before any expenditure)is just above the border line. The ownership of the property might be threatened in adverse market condition/s, especially if the owner is a small private landlord (less than 4 -5 rented properties, and the properties are in a similar situation) on a medium income with other financial commitments. In this bracket are properties that were bought in 2004/2005 with then 15 -20% deposit being required and in areas of reasonably high renting demand.
The third scenario is least favourable, when one owns less then 10% as positive equity (or no equity is owned at all) and somehow manages to get 8% profit, possibly due to the currently low interest rate. While it is ok for a time being, any rise of interest rate and other risks involved with letting makes this a very risky situation IMHO.
Some properties purchased during or after 2006, but before the Northen Rock downfall might be in that situation. In this bracket are less experienced private landlords who have "taken advantage" of very low deposit requirements on "Buy to let" mortgages, and if they purchased newly build property they are more than likely to be in a negative equity by now, due to the new built deprecitiation alone and due to the general market condition at the moment. The "ownership" of the property might be severly threatend by relatively small change in interest rates (2 -3%) and by any adverse change in general market condition/s.

I have not discussed the capital value appreciation/depriciation , especially if the purchase has been the newbuild property.

These are just but a few possible examples which will make 8% profit a very different proposition to be considerred as good, risky or not not worthy the risk involved.

I do wish you many good and responsible tenants and good profits,
2be

 

[abha]

I would like to know you about Laeeque Ahmad. My dad bought a house from him too, we do regret working with Laeeque because he played both sides and made us pay extra money on the side assuring us we would get the price we wanted for the property if we did so. My dad paid him $2000 and ended up paying asking price for the house after that.

 

[DionysusToast]

Your dad brought a house from him AND he wrote fraudulent pay slips for you.

He sure sounds like an all-rounder...

 

[Johnkarner]

His statements on the basis of historical trends in the U.S. housing assessment, Many economists and business writers anticipated the market correction of a few percentage points to 50% or more of the maximum values ​​in some markets,

 

[anley]

I would like to know you about Laeeque Ahmad. My dad bought a house from him too, we do regret working with Laeeque because he played both sides and made us pay extra money on the side assuring us we would get the price we wanted for the property if we did so. My dad paid him $2000 and ended up paying asking price for the house after that.

Next time realise that there are more spivs and low lifes in the property market than all the other industries put together.