Buying to let

[seikopath]

A friend has 120 to 130k to spend on property in the UK to get rental income. Suggestions on a postcard please!

[Omegamanic]

Couple of cheap flats up North, maybe somewhere in Yorkshire. Or a nice(ish) semi, but again I’m sure the North provides more access at that price.

Ive been considering buying somewhere to let, but might build instead - or completely renovate a v large terrace to 3-4 flats, so that I have control over the management co. (for things like scheduled maitenance etc.) at least until sold.

I’m just waiting until I can start straight swapping my remaining sports Rolex for a house each, and then I’ll start a very nice property portfolio 😁

[number2]

A friend has 120 to 130k to spend on property in the UK to get rental income. Suggestions on a postcard please!

Might have one or two your mate can have a choice of.

n2

[PhilT]

There are a number of social/affordable housing charities who are looking for investment partners and willing landlords - often with advantageous terms and guaranteed rental income.

[yumma]

In my opinion and considering the limited budget available, I would buy in the best location possible and get a small flat, this would likely deliver the best rental yield.

Depends where you are in the Country but I'd focus on a Town/City within easy walk of a Train Station to a major train line. Maybe get something small but at least one bedroom.

As others have said look at the Local Authority 'Homes to Let' schemes. These may pay a tad under the open market rental value but consider there are no agents fees, they guaranty rent for three years and also will return the property to you in the same condition it was taken on in. Thus it's a risk free Tenancy agreement.

I bought a small Studio flat in the City of Chelmsford a few years ago, it was a real bargain and a bit of a mess, I remodelled it to make it a one bedroom flat and did it up. On the basis of what it cost me in total compared to the rent it attracts it will have paid for itself in 10.5 years (in reality much sooner if rents continue to go up). I think it'd be hard to get a much better rental yield than that.

Best of luck

[Strchr03]

Bear in mind that you’ll struggle to get a mortgage, should you want to leverage, on a property with guaranteed rent.


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[Mick P]

The glory days of BTL are over, the friend would probably be better off stashing the money in a tracker.

BTL is now governed by a mass of rules and regulations that are legally enforceable and expensive.

Tell him to stay well away.

It is even better to Buy and Forget by buying and just keeping the place empty and waiting for the next property boom.

[number2]

The glory days of BTL are over, the friend would probably be better off stashing the money in a tracker.

BTL is now governed by a mass of rules and regulations that are legally enforceable and expensive.

Tell him to stay well away.

It is even better to Buy and Forget by buying and just keeping the place empty and waiting for the next property boom.

I agree with much of what you say however an empty property still attracts council tax at the going rate.

[trident-7]

Maybe buy some garages?

- - - Updated - - -

I agree with much of what you say however an empty property still attracts council tax at the going rate.

Going rate PLUS 50% if it's empty for more than 6 months. Here in Bath at least.

[Mick P]

I agree with much of what you say however an empty property still attracts council tax at the going rate.

In the overall scheme of things, council tax is a mere running cost which you recouperate when you sell.

That's the advantage of a tracker, dead easy to buy, no hassle to run and dead easy to sell.

I have a spare house in Spain staying empty, prices are now rising, the weak Pound is working to advantage, so why lumber myself with the hassle of a tenent ?

[blackal]

Maybe buy some garages?

- - - Updated - - -



Going rate PLUS 50% if it's empty for more than 6 months. Here in Bath at least.

That is the rate across England, but think it is after 2yrs?

[trident-7]

That is the rate across England, but think it is after 2yrs?

I've just checked with Bath Council & you are correct. However I was told 6 months when I actually spoke to somebody at BANES about a year ago so, unless it has changed since then, he must have been making it up as he went along. No surprise there.

[ALindsay]

Investigate near any big NHS university hospital

[Hewjardon]

Maybe buy with a view to short term letting, eg Air BnB.
Avoid legislation and have a potentially broader choice of suitable locations.

[RustyBin5]

The glory days of BTL are over, the friend would probably be better off stashing the money in a tracker.

BTL is now governed by a mass of rules and regulations that are legally enforceable and expensive.

Tell him to stay well away.

It is even better to Buy and Forget by buying and just keeping the place empty and waiting for the next property boom.

Tosh. A well selected property in the right location would be a far more lucrative bet than a tracker. Buy and forget - wow. Bit early to be on the Sangria even for you surely?

[thegreatdogwood]

Buy to let's are less lucrative than they used to be post the clampdown on tax relief. IN SE England you might typically get no more than 4% triple net yield (before tax) whilst that could go up to closer to 6% if you venture further north where historically there has been less capital growth. I wouldn't look at BTL's unless you are taking a 10 year investment view. Not wanting to sound like Carney but it's not hard to see that house prices could be under pressure in the short to medium term and those falls in value could easily wipe out the rental return.

I certainly couldn't recommend a tracker either at the moment. Total mystery how the 100 index is around the 7,000 mark and definite risk on the downside, along with reducing yields as dividends are paired back.

[Passenger]

Buy to let's are less lucrative than they used to be post the clampdown on tax relief. IN SE England you might typically get no more than 4% triple net yield (before tax) whilst that could go up to closer to 6% if you venture further north where historically there has been less capital growth. I wouldn't look at BTL's unless you are taking a 10 year investment view. Not wanting to sound like Carney but it's not hard to see that house prices could be under pressure in the short to medium term and those falls in value could easily wipe out the rental return.

I certainly couldn't recommend a tracker either at the moment. Total mystery how the 100 index is around the 7,000 mark and definite risk on the downside, along with reducing yields as dividends are paired back.

fwiw I agree with all of that.

[5avvy]

Is your friend looking to generate income or capital growth?
What is the hold period?
Does he/she ever plan to live there or will it always be an investment?
Although there isn’t any easy money in BTL anymore it’s still a viable long-term investment.
I’d personally be looking for freehold property in affordable areas within commuting distance from London.

[seikopath]

Is your friend looking to generate income or capital growth?
What is the hold period?
Does he/she ever plan to live there or will it always be an investment?
Although there isn’t any easy money in BTL anymore it’s still a viable long-term investment.
I’d personally be looking for freehold property in affordable areas within commuting distance from London.

Income.
Long term.
Investment.

I don't think his budget will stretch to that will it?

[broxie]

When your Uber driver talks about his BTL, you know the market is saturated.

[Spoonbed]

BTL without capital growth is a LOT of hassle for a pretty poor yield. I'd rather get 1-2% on account without the hassle of tenants.
And I cant see much appreciation in house prices for some considerable time (imho)

[5avvy]

Income.
Long term.
Investment.

I don't think his budget will stretch to that will it?

Is the £120k his cash holding or total of cash plus potential borrowing?

[seikopath]

Is the £120k his cash holding or total of cash plus potential borrowing?

Holding, plus he can potentially add to that without borrowing.

[5avvy]

Holding, plus he can potentially add to that without borrowing.

Dave, if you don’t mind, I’ll give this a bit of thought and ping you a pm later on.


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[seikopath]

Dave, if you don’t mind, I’ll give this a bit of thought and ping you a pm later on.


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Mate, that would be great. Thankyou.

[Mick P]

Tosh. A well selected property in the right location would be a far more lucrative bet than a tracker. Buy and forget - wow. Bit early to be on the Sangria even for you surely?

It would be nice if you could cut the quips about getting drunk on sangria, after the 10th time it becomes a bit repetative.

I have had 3 BTL's, how many do you have, I would guess none.

George Osborne introduced a phasing out of tax relief on mortgage interest and that hits profit hard. £130K that the OPs friend has will more than likely require a mortgage to make a purchase and the loss of tax relief makes it harder to make a living out of it.

As regards to Buy and Forget, it is growing at quite a fast rate. It started in London and is now impacting on northern cities such as Manchester and Leeds.

I had BTLs for 15 years and rent only accounted for a small part of the profits. The main profit comes from capital gains which in my day attracted tax relief in the form of tapering which does not not happen now.

BTLs are being sold faster by Landlords than they are being bought and the reason for that is simple, they are less profitable today than what they were even just 5 years ago.

[RustyBin5]

It would be nice if you could cut the quips about getting drunk on sangria, after the 10th time it becomes a bit repetative.

I have had 3 BTL's, how many do you have, I would guess none.

George Osborne introduced a phasing out of tax relief on mortgage interest and that hits profit hard. £130K that the OPs friend has will more than likely require a mortgage to make a purchase and the loss of tax relief makes it harder to make a living out of it.

As regards to Buy and Forget, it is growing at quite a fast rate. It started in London and is now impacting on northern cities such as Manchester and Leeds.

I had BTLs for 15 years and rent only accounted for a small part of the profits. The main profit comes from capital gains which in my day attracted tax relief in the form of tapering which does not not happen now.

BTLs are being sold faster by Landlords than they are being bought and the reason for that is simple, they are less profitable today than what they were even just 5 years ago.

Well stop making comments that make you sound drunk then.

You would guess none - wrong again. I’ve had 6 buy to let properties - still have two as it happens. Suggesting a tracker as a better alternative whilst the FTSE is on a knife edge is reckless at best. I don’t think that was a very well informed comment or suggestion to make.

[Mick P]

Well stop making comments that make you sound drunk then.

You would guess none - wrong again. I’ve had 6 buy to let properties - still have two as it happens. Suggesting a tracker as a better alternative whilst the FTSE is on a knife edge is reckless at best. I don’t think that was a very well informed comment or suggestion to make.

Frankly I think you and I should put each other on the ignore list, you are just arguing for the sake of it and responding because you have a past grudge just pollutes the thread.

Even you seem to have reduced your BTL by 66%, assuming you had all 6 at once. You have to admit that the loss of tax reduction and tapering makes BTL a lot less attractive and that is why Landlords are pulling out in droves.

A tracker is a gamble just like BTL is, but if you have had 6 BTLs then you will have to conceed, they can become a PITA on occassions when something goes wrong whereas a tracker can be sold within the hour.

Anyway our squabbling is just messing up a serious thread, so let us both do the decent thing and ignore each other.

[yumma]

I’d still support a buy to let despite the petty squabbling. Property has always been the safest investment; and in my eyes, whilst basic economics of supply and demand exists will continue to beat other investments. Yes there was a period in the late 80’s when the market took a dive, and yes Brexit could be problematic, but longer term you will struggle to go far wrong. Luck and good fortune will always play a part but if I had a spare £120k I’d put it into property without a second thought.

[RustyBin5]

Frankly I think you and I should put each other on the ignore list, you are just arguing for the sake of it and responding because you have a past grudge just pollutes the thread.

Even you seem to have reduced your BTL by 66%, assuming you had all 6 at once. You have to admit that the loss of tax reduction and tapering makes BTL a lot less attractive and that is why Landlords are pulling out in droves.

A tracker is a gamble just like BTL is, but if you have had 6 BTLs then you will have to conceed, they can become a PITA on occassions when something goes wrong whereas a tracker can be sold within the hour.

Anyway our squabbling is just messing up a serious thread, so let us both do the decent thing and ignore each other.

Who said that?

[Wolfie]

Well stop making comments that make you sound drunk then.

You would guess none - wrong again. I’ve had 6 buy to let properties - still have two as it happens. Suggesting a tracker as a better alternative whilst the FTSE is on a knife edge is reckless at best. I don’t think that was a very well informed comment or suggestion to make.

It would be nice if you could cut the quips about getting drunk on sangria, after the 10th time it becomes a bit repetative.

I have had 3 BTL's, how many do you have, I would guess none.

George Osborne introduced a phasing out of tax relief on mortgage interest and that hits profit hard. £130K that the OPs friend has will more than likely require a mortgage to make a purchase and the loss of tax relief makes it harder to make a living out of it.

As regards to Buy and Forget, it is growing at quite a fast rate. It started in London and is now impacting on northern cities such as Manchester and Leeds.

I had BTLs for 15 years and rent only accounted for a small part of the profits. The main profit comes from capital gains which in my day attracted tax relief in the form of tapering which does not not happen now.

BTLs are being sold faster by Landlords than they are being bought and the reason for that is simple, they are less profitable today than what they were even just 5 years ago.

I’ve only got one BTL…. But, I do have an unfeasibly large penis

[-Ally-]

~8.2% pre-tax for me. It ain’t all doom and gloom.

[RustyBin5]

~8.2% pre-tax for me. It ain’t all doom and gloom.

7.5% here. Hence the challenge. There will be a move towards capital and interest mortgages for BTL with the tax changes, so borrowing costs will be greater but if the guy has £120k cash then a yield north of 6% after costs isn’t to be sniffed at.

[lenlec]

130k will get you a 3 bed semi round near me. £700 per month rent all day long
Nearly 7% return

[FazerBoy]

130k will get you a 3 bed semi round near me. £700 per month rent all day long
Nearly 7% return

There’s quite a difference between a gross yield and net yield...

[thegreatdogwood]

There’s quite a difference between a gross yield and net yield...

Correct and one of the biggest issues is covenant risk.

Just think about why someone rents paying a yield of 7 or 8% when they might pay half that on a mortgage. Yes there will be occasions when someone needs the convenience of renting for a period rather than buying, but it's often because they aren't able to take out a mortgage themselves. If you get caught with a non-paying tenant it can be a whole world of grief and cost getting back possession and putting the property into repair.

There is no such thing as a free lunch in property investment, the yield is a market reflection of the prospects for capital growth and a triple net income stream. Buy a property with associated costs, let it to someone who does not look after it, defaults on the rent and requires legal action to procure possession and any deposit looks pretty futile. Then there are the costs of selling, void costs ahead of sale and any CGT that could be payable, etc.

It's easy for individuals to say they got 7 or 8% yield in a single year. Achieving that consistently is very challenging, especially at the moment and professional BTL investors would always hold a number of properties that are targeted at the higher yielding BTL market to try to diversify the risk.

With all the uncertainty in the market, I simply can't see the sense of putting £130k into any of the capital markets at the moment, rather than sitting tight to see what the outcome of Brexit is.

[RustyBin5]

Correct and one of the biggest issues is covenant risk.

Just think about why someone rents paying a yield of 7 or 8% when they might pay half that on a mortgage. Yes there will be occasions when someone needs the convenience of renting for a period rather than buying, but it's often because they aren't able to take out a mortgage themselves. If you get caught with a non-paying tenant it can be a whole world of grief and cost getting back possession and putting the property into repair.

There is no such thing as a free lunch in property investment, the yield is a market reflection of the prospects for capital growth and a triple net income stream. Buy a property with associated costs, let it to someone who does not look after it, defaults on the rent and requires legal action to procure possession and any deposit looks pretty futile. Then there are the costs of selling, void costs ahead of sale and any CGT that could be payable, etc.

It's easy for individuals to say they got 7 or 8% yield in a single year. Achieving that consistently is very challenging, especially at the moment and professional BTL investors would always hold a number of properties that are targeted at the higher yielding BTL market to try to diversify the risk.

With all the uncertainty in the market, I simply can't see the sense of putting £130k into any of the capital markets at the moment, rather than sitting tight to see what the outcome of Brexit is.

A lot of what you say is true, but there are plenty of low risk places to hold your money - but the starting point is to seek proper advice including doing a risk profile and capacity for loss assessment with your advisor. I would not make any specific recommendation to anyone without following the full advice process first.

This is why I have never had an advice complaint in 25 yrs. it’s also why I get cross when statements like Mick’s appear saying he would be as well putting it in a tracker without knowing anything about the person or his/her situation.

[helidoc]

.....
With all the uncertainty in the market, I simply can't see the sense of putting £130k into any of the capital markets at the moment, rather than sitting tight to see what the outcome of Brexit is.

An excellent post.

I recently bought a house after renting in the interim, and liked the flat so much that I wanted to buy it. Putting Brexit uncertainty to one side, the maths just didn’t stack up.

Yield would be 6% at best, but with void periods, 6 month lets and agency fees could easily drop to 3-4%. At least a year to recover the up front extra stamp duty, then any profit taxed at my marginal rate of 45%. There’s not much net income, certainly not enough to accept the hassle and lack of liquidity. If you think there will be a lot of capital growth then OK, but I’m not seeing enormous value in purchase prices. Emotionally I’m still keen, but I’m very unconvinced by the sums.

Dave



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[Devonian]

The saying ‘a little knowledge is dangerous’ is quite apt on this thread. OP take professional advice.

[MrSmith]

Bit of a thread hijack but As all you experts are here in one place.
What would you do in this situation:
You have a £280-310k property with £725 P/M mortgage (soon to drop to £650 ish) and only owe £125k on it. It would rent for £1050-£1100 p/m have to factor in the £1500-£1700 service charge every year plus insurance and agency fees too.

I’ll be moving in with my partner in a year or so as she has the bigger more valuable property. Am I better off renting mine out? I don’t really care about making money I just like the idea of somebody putting £900 in a pension pot every month and owning an asset.
Or am I better off with the £160k to invest elsewhere?

[Devonian]

Bit of a thread hijack but As all you experts are here in one place.
What would you do in this situation:
You have a £280-310k property with £725 P/M mortgage (soon to drop to £650 ish) and only owe £125k on it. It would rent for £1050-£1100 p/m have to factor in the £1500-£1700 service charge every year plus insurance and agency fees too.

I’ll be moving in with my partner in a year or so as she has the bigger more valuable property. Am I better off renting mine out? I don’t really care about making money I just like the idea of somebody putting £900 in a pension pot every month and owning an asset.
Or am I better off with the £160k to invest elsewhere?

There are too many scenarios to consider to answer in a thread like this and as always I’d suggest you seek independent advice to get a true reflection of the pro’s and con’s of each. I’m guessing your mortgage is currently on capital repayment?

If you and your partner don’t work out you’ll have still have your own place.
Tax relief in the interest will only be basic rate within two years (it’s in its second year of decreasing).
There will be no CGT if you sell now as it’s your main residence. Depending on how long you’ve lived there so far depends on how much you’ll pay in the future.
If you buy in the future you’ll pay extra stamp duty as you’ve continued to keep this.
Service charge - not necessarily a bad thing as it means you’ll be unlikely to ever have big repairs yourself.
The demand for rentals is extremely high so you can pick and choose and in all likelihood you’ll get good tenants, though obviously it can’t be guaranteed.
As well as the tenant effectively paying your mortgage off, you also have the chance for capital growth in the long term. Even at say 2% or 3% a year that’s not bad.
What else would you invest in? Deposit based will lose money against inflation. Stock market probably the best choice long term, but a risk all the same.

I could go on and on . . . . .

Personally I’d keep it if I were in your position, but I’m not you so take advice on both options.

[RustyBin5]

There are too many scenarios to consider to answer in a thread like this and as always I’d suggest you seek independent advice to get a true reflection of the pro’s and con’s of each. I’m guessing your mortgage is currently on capital repayment?

If you and your partner don’t work out you’ll have still have your own place.
Tax relief in the interest will only be basic rate within two years (it’s in its second year of decreasing).
There will be no CGT if you sell now as it’s your main residence. Depending on how long you’ve lived there so far depends on how much you’ll pay in the future.
If you buy in the future you’ll pay extra stamp duty as you’ve continued to keep this.
Service charge - not necessarily a bad thing as it means you’ll be unlikely to ever have big repairs yourself.
The demand for rentals is extremely high so you can pick and choose and in all likelihood you’ll get good tenants, though obviously it can’t be guaranteed.
As well as the tenant effectively paying your mortgage off, you also have the chance for capital growth in the long term. Even at say 2% or 3% a year that’s not bad.
What else would you invest in? Deposit based will lose money against inflation. Stock market probably the best choice long term, but a risk all the same.

I could go on and on . . . . .

Personally I’d keep it if I were in your position, but I’m not you so take advice on both options.

Best response so far

[thegreatdogwood]

Bit of a thread hijack but As all you experts are here in one place.
What would you do in this situation:
You have a £280-310k property with £725 P/M mortgage (soon to drop to £650 ish) and only owe £125k on it. It would rent for £1050-£1100 p/m have to factor in the £1500-£1700 service charge every year plus insurance and agency fees too.

I’ll be moving in with my partner in a year or so as she has the bigger more valuable property. Am I better off renting mine out? I don’t really care about making money I just like the idea of somebody putting £900 in a pension pot every month and owning an asset.
Or am I better off with the £160k to invest elsewhere?

But you would be paying £650 a month in mortgage payments out of the £900 net rent you have received, possibly more when you disclose it has become a BTL. Typical London scenario, rental yield is poor so comes back to capital growth and your personal circumstances including appetite for risk.

I don't know what values are going to do over the next say 5 years, over 10 years it would be easier to point to London always having a long term upwards trend but equally when values fall, they dip further and quicker in London. It's expensive to enter and leave the property market so the security of your relationship is another consideration. You can get 2% risk free through a savings deposit but that's not very exciting either.

Lots of variables and Devonian is correct, you need someone to go through your personal circumstances in detail to point out the issues. A lot can also change in the next 12 months before it seems you have a decision to make!

[RustyBin5]

But you would be paying £650 a month in mortgage payments out of the £900 net rent you have received, possibly more when you disclose it has become a BTL. Typical London scenario, rental yield is poor so comes back to capital growth and your personal circumstances including appetite for risk.

I don't know what values are going to do over the next say 5 years, over 10 years it would be easier to point to London always having a long term upwards trend but equally when values fall, they dip further and quicker in London. It's expensive to enter and leave the property market so the security of your relationship is another consideration. You can get 2% risk free through a savings deposit but that's not very exciting either.

Lots of variables and Devonian is correct, you need someone to go through your personal circumstances in detail to point out the issues. A lot can also change in the next 12 months before it seems you have a decision to make!

At £650 a month it sounds like a capital and interest mortgage, so even if prices of property don’t grow then month on month the equity is building as the debt reduces. If the £650 is interest only then the rate needs reviewed as it seems to high on a £125k loan

[Devonian]

At £650 a month it sounds like a capital and interest mortgage, so even if prices of property don’t grow then month on month the equity is building as the debt reduces. If the £650 is interest only then the rate needs reviewed as it seems to high on a £125k loan

That’s why I said I assumed it was on repayment, as interest only he would be paying 6.25% (650pm on a 125k loan).

[MrSmith]

Yes it’s repayment not interest only, I know the yield is not great but I almost don’t care about that as long as it pays for itself and as the mortgage repayments go down the income will go up (it will be paid off when I retire) as for increase in value well I feel it’s gone up rapidly in the last 2 years and now has stalled along with everything else and any more gains there will be small.
My gut feeling is to keep it as has been pointed out if the relationship sours I have a place to live but I’m more looking towards having an income for us in retirement :-)

The only issue I can see is a lender saying no when I have to convert to BTL and the yield not tallying with their requirements

[Devonian]

The only issue I can see is a lender saying no when I have to convert to BTL and the yield not tallying with their requirements

Some lenders will give you ‘consent to let’ so you can do it legitimately and you should be able to keep the same rate/product.

If they don’t there are some extremely competitive buy to let rates nowadays. Nor,ally fees can be quite high switching products every 2 years or so, so maybe a 5 year fixed - they are good deals on them. Or ‘let to buy’ deals are an option, though you’re technically not buying.

Then there’s a very large contingent who just don’t tell the lender full stop. Not a route I’d recommend obviously but it does happen.

I’m sure though if you get some proper advice ‘consent to let’ is the most viable option. Make sure you explore this before taking out any new deals of your rates up soon.

[trident-7]

I'm paying base rate plus 0.89% on my BTL mortgage, for the lifetime of the mortgage. I presumed that this was a good deal so haven't tried shopping around & changing it. Is it a good deal?

Also, how do I work out what yield I'm getting? Mortgage is about £95K. Rental income £1200pcm

[Devonian]

I'm paying base rate plus 0.89% on my BTL mortgage, for the lifetime of the mortgage. I presumed that this was a good deal so haven't tried shopping around & changing it. Is it a good deal?

Yes very good.

[thegreatdogwood]

Yes it’s repayment not interest only, I know the yield is not great but I almost don’t care about that as long as it pays for itself and as the mortgage repayments go down the income will go up (it will be paid off when I retire) as for increase in value well I feel it’s gone up rapidly in the last 2 years and now has stalled along with everything else and any more gains there will be small.
My gut feeling is to keep it as has been pointed out if the relationship sours I have a place to live but I’m more looking towards having an income for us in retirement :-)

The only issue I can see is a lender saying no when I have to convert to BTL and the yield not tallying with their requirements

So you need to look at where you are in the repayment cycle to know how much of the £650 is repaying capital and what balance is servicing the debt. The outcome varies enormously dependent on how long the loan has to mature and will give you a simple idea of what sort of return you are getting on the capital deployed if you hold and prices remain static. So for instance IF you were at a stage that the repayment was split 50:50 then on your figures (and simplifying some complexities) you are getting £9k income less about £4k of interest so £5k from combined equity increase (debt reduction) plus rent surplus (post mortgage payments) on your net equity deployed for opportunity cost purposes (say £160k on your figures)

That's around 3%. Now if values increased 5% over the next 12 months then that adds a further amount (say £14.5k) into your notional annual return = 12%+ before tax = happy days

To be at break even though you just need to see the capital value fall by £5k (1.7%)

Geared returns are terrific when values increase, but as I keep saying a London BTL investment proposition in particular (with modest rental return) is entirely about what happens to the value as that will make or break the returns.