Monday, Feb 05, 2007
BTL refusing to die?
Firstrung: 55% of buy to let landlords plan to buy more properties - Bradford & Bingley
A wide range of people are investing in buy-to-let. A survey of 3,617 UK landlords carried out by GFK NOP shows that confidence in the market is higher now than it was this time last year. The survey on behalf of Bradford & Bingley, the UK's leading lender of buy-to-let mortgages, found that a staggering 95% of landlords plan to either increase or maintain the number of buy-to-let properties they own.
Posted by converted lurker @ 12:36 PM (121 views) Add Comment
21 Comments
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1. sovietuk said...
ok if you've done your calculations correctly and you can weather the coming storm. If not prepare for a very bloody nose.
2. dohousescrashinthewoods said...
I see a parallel with a Benard Matthews turkey farm.
3. Me Me Me said...
Is someone selling bloody top draw print presses on Ebay?
4. harold said...
Buying properties for these guys is addictive. Get one, two, three, why not a fourth and fifth as well. If someone out there is willing to lend them the money, why not? However, like all gamblers, the luck of the BTL brigade will run out sooner or later. Dinner party conversations in the future will be "I lost over two million in the crash..." (as if they really ever owned it in the first place).
5. Davros said...
People are absolutely mad. I despair.
6. Surfgatinho said...
Of course they plan to buy more. They wouldn't have bought one if they didn't think it was a sound business model, which it was 5 years ago. Now however...
7. Randomkevlar said...
Wow, was it not last month (or DEC 06) that a Buy it Let survey stated that 91% of that market was going to buy more property this year!!! that's quite of drop in a couple of months (down to 55%) or am I getting my surveys wrong?
8. Tangara said...
If Tony did it, I will surely do it !
9. inbreda said...
The conversations wont be happening at dinner parties
queues at soup kitchens perhaps.
10. Mjchum said...
Depressing as it is, I don't think this boom will end anytime soon. All the talk at work is of buying property. Three friends have either just bought second houses (one with a big MEW on 1st home) or are about to buy, either in cash or with big deposits.
This thing has a while to run, unless (sorry, until) a serious economic shock causes the boom to go into reverse. This will happen, but no for a while.
The 2012 Olympics seems to be the current driver of prices in the SE. The consensus seems to be that the Games will prevent HPC, but after that . . . .
11. enuii said...
Bradford and Bingley are running nothing less than a Pyramid Selling Scheme with lax borrowing rules, some of these guys are stacked up to the gunnels with mortgages.
12. bidin'matime said...
Of course they (say that they) plan to buy more - if they admit that prices are too high to buy, it is an admission that they might fall!
13. p. doff said...
Of today's 6 valuations, 3 were BTL. The rental returns don't stack up, but the buyers obviously don't care. BTL still driving the market in this area as the odd 1/4% rate increase seems to make no difference to buying fever. Bliar still thinks it a good time to buy, and I guess he is best positioned to have inside knowledge if anybody does. Sorry guys, I don't see HPC happening just yet!
14. David20040_0 said...
With demand like this prices will just keep rocketing up.
15. uncle chris said...
No worries - lots of cheap properties for us to rent over the next few years if more BTLs come on the market. We originally started renting whilst we considered buying, but it has really opened our eyes to the benefits of renting. Three years later we are still enjoying the stress-free life that it brings. Yes we would like to buy one day but there is certainly no rush since we haven't decided which area we would like to settle. In the meantime, and with FTBs having fallen out the equation, the BTLs have got themselves in a right catch22 situation. If they continue to buy then rents stagnate or even fall, and if they all decide to sell then house prices drop. I don't understand why they cannot see this as a no-win situation - unless of course you entered the field 10 years ago.
16. sirgoogle said...
May the BTLs continue with their attitude. They will bring the house of cards down on themselves.
All this will mean that a .25% rise on 8 Feb is more likely than ever.
17. geed said...
Owning a property (but buy to let) has a huge tax advantage providing the home retains its value as it is not taxed. Saving is penalised, you earn money and get taxed, you earn interest and you get taxed, you then declare to the tax man how much taxed interest you've earned on your savings and he will then finally tax it as an income on top of your earnings. I could cry.
However here in Australia, if you BTL and the rent does not cover the mortgage payments (which it never does these days), you can claim the money that you've paid to top up the BTL mortgage as tax deductable at the highest rate you are taxed which is arpund 48% in my case. So the government contibutes to your BTL. I am encouraged by my own government to get into debt.
Times have changed people, Debt is the new way to succeed and if you cant afford that payment on the Cayman, take out an IVA and only pay for a 1/4 of it!
18. geed said...
Should be (NOT buy to let).
19. dohousescrashinthewoods said...
Geed, debt may have been the way to succeed but signs are it won't last.
Some say governments used it as a way to keep the economy going on empty.
Now it is starting to bite the lenders and lenders are starting to bite borrowers.
The housing bubble seems to be a child of the liquidity bubble - aka too much credit and debt - and this appears to be coming to an end.
What to do? If you can, get out of debt, stay out of debt while it all collapses I guess. That way you are not directly exposed to the bubble.
20. Rimmer said...
Geed
BE SERIOUS
200K Mortgage = 15K a year intrest to repay ( 7.5% )
Rental income PA taking 9 months as average = £700 PCM x 9 = £6300 PA Minus council tax for 3 months = £5900 Minus insurance ( for a BTL property ) = £5500 PA Minus agent handling fee and agents insurance ( 10% + VAT ) = £4750 .
This all assumes you cover the cost of bathrooms, kitchens, doors, decorating etc ( estimated at approx £1500 PA ) against tax.
Alternately you could take your £1500 / Month mortgage payment ( which is £18000 PA ) and invest it, should return easily £1000 tax free if you invest wisely, so at the end of year one you have about £20000 in the bank etc, unless your house has made ( and will continue to make ) 7% PA for the next 10 years you wont break even.
If an economic event happens and houses go south your be left holding the baby and still owing 200K looking for anyone to offer any kind of rental income, shares and equities sell at the press of a button, try that with your BTL!
Also dont forget all the fees etc to buy the thing in the first place - do your figures.
21. Rimmer said...
GEED
I fogot to add IRs miht also go to 8% and what then for the borrower?