Column-buy-to-let Is Uk's Bubble......

[Guest wrongmove]

COLUMN-Buy-to-let is UK's bubble; N.Rock its needle:James Saft

" LONDON, September 18 (Reuters) - Buy-to-let property investment is Britain's version of subprime and the Northern Rock (NRK.L: Quote, Profile , Research) debacle will prove to be the needle that pops the bubble.

Lending terms will be tightened, rates will rise, and most important of all, confidence will be hit. The army of small British property investors now taking on risk on a heroic scale will realize that an investment that costs more to own than it generates in income and stops rising in price is a bad idea.

Buy-to-let, which now accounts for about 12 percent of British mortgage lending, is the practice of buying property, typically borrowing the vast majority of the price, and renting it.

And like so many bubbles before, it has been a great business over the past decade as property values nearly tripled, making fortunes for many investors and giving lenders who were prepared to take higher risk rocket-fuelled growth.

The lesson of the Northern Rock saga, indeed of the global financial crisis, is that credit, confidence and rising asset prices form a self-reinforcing cycle on the way up, encouraging ever greater risk taking.............."

[wotser]

COLUMN-Buy-to-let is UK's bubble; N.Rock its needle:James Saft

" LONDON, September 18 (Reuters) - Buy-to-let property investment is Britain's version of subprime and the Northern Rock (NRK.L: Quote, Profile , Research) debacle will prove to be the needle that pops the bubble.

Lending terms will be tightened, rates will rise, and most important of all, confidence will be hit. The army of small British property investors now taking on risk on a heroic scale will realize that an investment that costs more to own than it generates in income and stops rising in price is a bad idea.

Buy-to-let, which now accounts for about 12 percent of British mortgage lending, is the practice of buying property, typically borrowing the vast majority of the price, and renting it.

And like so many bubbles before, it has been a great business over the past decade as property values nearly tripled, making fortunes for many investors and giving lenders who were prepared to take higher risk rocket-fuelled growth.

The lesson of the Northern Rock saga, indeed of the global financial crisis, is that credit, confidence and rising asset prices form a self-reinforcing cycle on the way up, encouraging ever greater risk taking.............."

Dot forget ...NR was first port of call for BTLers seeking a mortgage!

[sign_of_the_times]

Dot forget ...NR was first port of call for BTLers seeking a mortgage!

surely they danced with the devil first ?

[BandWagon]

COLUMN-Buy-to-let is UK's bubble; N.Rock its needle:James Saft

It's about time someone figured out that Sub-Prime in the US is called Buy-To-Let in the UK.

[scuuzeme]

surely they danced with the devil first ?

Met him on the crossroads.

He took their souls.

But hell, he tought them to play this here "property investment game" reeaal goood.

[needle]

COLUMN-Buy-to-let is UK's bubble; N.Rock its needle:James Saft

" LONDON, September 18 (Reuters) - Buy-to-let property investment is Britain's version of subprime and the Northern Rock (NRK.L: Quote, Profile , Research) debacle will prove to be the needle that pops the bubble.

Finally my contribution is recognised!!!!

Edited September 18, 2007 by needle

[scuuzeme]

Thanks for the link Wrongmove, cheered me up considerabley after the events of the past day or so!

Would be nice to see it reprinted in some of the papers, here's hoping.

[pimperne1]

COLUMN-Buy-to-let is UK's bubble; N.Rock its needle:James Saft

" LONDON, September 18 (Reuters) - Buy-to-let property investment is Britain's version of subprime and the Northern Rock (NRK.L: Quote, Profile , Research) debacle will prove to be the needle that pops the bubble.

Lending terms will be tightened, rates will rise, and most important of all, confidence will be hit. The army of small British property investors now taking on risk on a heroic scale will realize that an investment that costs more to own than it generates in income and stops rising in price is a bad idea.

Buy-to-let, which now accounts for about 12 percent of British mortgage lending, is the practice of buying property, typically borrowing the vast majority of the price, and renting it.

And like so many bubbles before, it has been a great business over the past decade as property values nearly tripled, making fortunes for many investors and giving lenders who were prepared to take higher risk rocket-fuelled growth.

The lesson of the Northern Rock saga, indeed of the global financial crisis, is that credit, confidence and rising asset prices form a self-reinforcing cycle on the way up, encouraging ever greater risk taking.............."

He must have some data to support this argument other than BTL accounts for 12% of British Mortgage Lending and deposits are now 15%. If he does then he should produce it, if not then he is not really an authority, he is guessing. I am thinking, how many of these new mortgages are to new BTL "investors", how much is there between rent and mortgage repayments, how many are to landlords who have a large portfolio and who are therefore able to take higher interest rates without too much pain. Pleased to see well presented arguments (not that I expect anyone to think this is one) but if it is not borne out with some more facts than this then is dilutes rather than advances the case. Does he really think that those who provided 15% deposit are more likely to be the cause of the "crash" than those who borrowed 125% of the property value (again, he must have some data, otherwise he would stand charged with guessing).

[erranta]

Met him on the crossroads.

He took their souls.

But hell, he tought them to play this here "property investment game" reeaal goood.

People who committed suicide, were hung, any other reason who could not be given a consecrated ground burial in the old days were more than likely buried near crossroads (placement of hanging gibbets)

'so their evil spirits could never find the right path home'

Hence - "Met him on the crossroads"

[Guest Shedfish]

this article certainly makes up for their 'average 1 bed flat to cost £1M by 2020' article last year

[Nationalist]

People who committed suicide, were hung, any other reason who could not be given a consecrated ground burial in the old days were more than likely buried near crossroads (placement of hanging gibbets)

'so their evil spirits could never find the right path home'

Hence - "Met him on the crossroads"

Nah, it was just PR. If you're going to hang someone you want as many passers-by as possible to see the swinging corpse, so a crossroads makes more sense than an ordinary roadside. It's all about exposure.

(Nothing changes )

[Guest wrongmove]

Gosh you are slow today RB - this was posted aaaaaaaages ago!