Tuesday, Apr 10, 2007
Greed is good...apparently
Firstrung: Buy to let landlords have on average eleven properties under management - Paragon
Figures from buy to let specialist mortgage provider Paragon Mortgages have revealed the number of properties in the average landlord's buy-to-let (BTL) portfolio has continued to rise...In November 2006, the average number of properties owned by a landlord stood at 10.2, a figure which rose by February to 11.1. In addition, the average portfolio value has risen 7 per cent in that time.
Posted by converted lurker @ 12:40 PM (131 views) Add Comment
16 Comments
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1. Davros said...
As someone who has been renting for 6 years, I can tell you with utter certainty rents are not rising. Anyone who reckons buy to let is a good investment at the moment needs their head read.
2. royston said...
Only a guess, but could it be that some former home owners sold because they couldn't believe the huge sums of money that BTL buyers were willing to pay?
........then again, would Paragon Mortgages gain anything by misleading as to the nature of the rental market and creating panic among potential buyers and renters?..........Mmmmmm!
On the other hand, maybe it is simply true that everybody on the planet wants to relocate to London - I mean, what a lifestyle we have, what weather - and there just aren't enough homes to go around.
3. Dunk said...
Yehhhh! - the supply of rental properties is increasing!
4. taffee said...
this paragon guy seems too bullish to be true....personally rents are not going through the roof if anything round here they seem to be getting cheaper.The yield by any business standards simply makes no sense....its capital growth that makes buy-to-let worth while and that is stalling.
Cannot believe people think property is a one way bet still....mind you there was the dot com boom of couse.
5. Sam said...
that's good, at least it a fewer number of muggs that are keeping the game going rather than new wanna be landlords getting in the game.
I wonder what they'll do when mortgages end up in negative equity - and they try to increase rents.
Note: landlords in our block of flats increased rent by about 8/9% this year. our neigbours moved out. we're moving out soon. -we're near london bridge. - so much for the huge demand and hot market in london.
6. doomwatch said...
11 properties to cash in before the big one. That'll take some time; they better start soon.
7. p. o. o. r said...
Dunk said "Yehhhh! - the supply of rental properties is increasing!" - I would agree that the number of rental properties is increasing, but like wise the number of rental properties that are staying on the market and taking month until they are let is increasing... Just think whilst the property is not let it is costing the owner money :-) - Competition keeps price low which is why rental returns are not increasing in the same way as property prices. Soon there will be a big off-loading of the rental properties, and this could trigger the market to crash. especially if we have a few more hikes in interest rates..
8. george monsoon said...
~The MPC are bailing out a sinking boat with a thimble under captains orders!!... sooner or later they will have to resort to the bucket and throw the captain overboard. Its gonna happen and soon. Will someone archive this comment so that I can say "told you so" to all the bulls on here!
9. p. o. o. r said...
gm - I would agree with you, however can you be more specific will they throw the captain overboard "Sooner" or "Later" - Give us a date that you expect this to happen - or maybe a month.. My prediction is July 2007 - Start of the holidays which is normally a good time for house hunting - Also by this time we will know what is happenning to Mr Brown, HIPS will have been introduced, and I am guessing that we will have seen another two increases in Interest Rates with the threat of another before the year end. However I do not think things will crash until the start of 2008... and then there will be a lot of tears - At the moment the Economy is strong, and it is not going to start to turn until next year - High Interest Rates will knock a few of their stools, however Job losses will really scare people - If in the first QTR of 2008 the feed back to the stock market is that the year has not been as good as predicted then stocks and shares will also take a pounding - Again my guess is that we will see the FTS100 break the 7000 figure before the end of this year, but will drop back to around 5000 or less by the third Qtr of 2008 - Now lets archive this one.... :-)
10. paul said...
"Their confidence is a good indicator of current conditions - and their confidence is high. They know that tenant demand is pushing rents and yields upwards and remain confident in the long term capital appreciation of their current properties. They fully expect to continue expanding their portfolios in both size and value over the next 12 months."
Such a cheap marketing trick - crediting your customer base with a false observation of your own reliability. Like a knock-down carpet salesman saying "Our customers know that our carpets are the best".
And BTW, just saying that rents will go up won't make it come true.
11. Soothsayer said...
Have rented in London for 6 years now. In my case rents first fell 10% in 2002/3 and then receovered a bit. Hva erisen a bit recently. But overall over 6 years they have risen by probably 6% over 6 yrsie 1% per year...much below inflation...some areas might have risen more...maybe 2% pa. My current flat has a mthly rent of 1200 and a 100% mortgage would cost 2400 per mth + maintenance charges...who would want to get into buy to let I wonder
12. Fahrenheit451 said...
Its cheaper to rent than buy, roll on the crash, when its hits 90% al the BTLs will bail out.
Then when it hits 75% all the BTLs will buy again, but with all the competition the rents will have dropped through the floor.
And it will continue down to ...
OK when it hits 50% I might be tempted, got to give in sometime ...
13. confused76 said...
I am renting and moving out. One half of the tenants in the block of flats where I leave (Notting Hill) are moving out this summer, landlords tried to increase rent by up to 25%!!!. The same 1/2 of the flats have been put on the market to be sold. I know of at least 5 (out of 20) tenants who were in talks to buy their flats, but backed out because of price. My flat has been viewed by more than 15 buyers before a first offer!! The sentiment with landlords is still bullish, but buyers are wary of the bubble.
14. Johnny said...
BTL = Deckchair attendant on the Titanic, still arranging deckchairs after it hit the Iceburg
15. Dr K said...
confused76,
I believe the landlords are outrageously increasing their rents so that they can sell their properties! If a tenant is willing to suffer the increase, the landlord is quids in and if the tenant moves out, the market is still sufficiently buoyant that they can sell at an outrageous profit. You say that 15 people viewed your property and only 1 offered a price; to me that it is still indicative of the bullish market by virtue of 15 people are still trying to buy one over priced flat! Until the flats are on the market for at least a month or two and viewings are 3-5 people per month with no or below asking price offers, the market has to be considered bullish. I believe the madness is here until at least Spring 2008 (and that depends on whether high end banking bonuses are reduced compared to 2007), then you will see stasis and if the economy begins to stall, there will be a correction of 10-30% in late 2008/early 2009. I have been renting for nearly 12 months, having previously been a home owner, but I have prepared myself for renting for another 2-3 years before dipping my toe back into the housing ownership market.
16. bidin'matime said...
Dr K - We sold in July 2005, preparing ourselves for a year or so in rented - now we're thinking 5 more years yet, but we enjoy the change in lifestyle so much, we don't mind. My prediction is that prices will be no higher in 10 years time than they are now.