Friday, Apr 13, 2007
Why would you pay the BTL landlords mortgage?
Firstrung: UK remains a low risk buy to let destination - Assetz
"As first time buyers are increasingly priced out of the market demand for rental properties is likely to rise, providing a strong basis for buy-to-let investment." Perhaps it's twisted logic on our part, if so please advise, but we're struggling with the concept that if you can't afford to buy with your own low rate first time buyer mortgage, you could afford to pay your buy to let landlords inflated interest only buy to let mortgage...
Posted by converted lurker @ 11:07 PM (125 views) Add Comment
9 Comments
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1. uncle chris said...
BTL are desperately trying to get rents up in this area (Wrexham) but it appears they have found an absolute limit in terms of the lower than average wages we have. I could point out 50+ 2-bed new-build flats still for rent in the area at £525 and yet similar rentals at £450 and below go in days. Buyers may overstretch themselves to get those properties, but why would renters pay more than they can afford just to see themselves go further into the red each month. What's the point of working if that were the case?
2. confused76 said...
Firstrung's comment is right, how can it be that priced out FTBs can pay rentals such to give a decent yield for the BTLers?!!
But the statements by the Assetz managing director should receve this week's Comical Ali special award:
"As first time buyers are increasingly priced out of the market demand for rental properties is likely to rise, providing a strong basis for buy-to-let investment. The overall shortage of homes is set to drive house prices in the UK up by 8 - 10% in 2007 and 2008, encouraging investors to take a long term view and benefit from strong capital gains despite historically low yields."
... 2007 and 2008, wow, that s a long term view!!
3. Whiteknight said...
.. be careful what you wish for. or beg for in this case then.
4. paul said...
Supply and demand myth again from Assetz.
It's not working any more ...
5. taffee said...
has the editor bought another buy-to-let or something....wouldn't surprise me!
6. denzil said...
Got to give Assetz PR machine credit. The company barely been in existence a year and people are quite happy to use them for a quote.
Assetz are about as VI as it is possible to be and so of course they will say: "The Uk remains a low-risk BTL destination" but it defies belief why everybody seems so content to give them some free marketing.
7. Weycresto said...
If Council and Housing Association Tenants have the Right to Buy then why not the tenants of BTL?
We should campaign for the Right to Buy from Private (BTL) Landlords now!
8. Fahrenheit451 said...
How about a twist to this..
Build more houses !!!
It's not brain science, but if the Planning system was not such a pain and we could all do the Build It Yourself from prefab timeber frame kits.
It only costs half the price and you can make it as big as you need ... today ... then add an extension tomorrow.
http://business.timesonline.co.uk/tol/business/money/mortgages/article1646624.ece
9. A Fool & His Borrowed Money said...
Statements by the Assetz managing director :
"As first time buyers are increasingly priced out of the market demand for rental properties is likely to rise, providing a strong basis for buy-to-let investment."
Someone should send him a financial Maths book for dummies to educate himself that;
a) If FTB's cant afford the rents,
b) Neither will the FTB's be able to afford a rent that covers a BTL'ers mortgage payment either!
BTL'ers buying AT today's prices are facing a shortfall in the rental income versus the BTL mortgage payment.
I hope they have figured out how to cough up the difference in years to come, what with rising Interest Rates, etc.
And those that saythey are putting up with the shortfall in hope of capital gains later on should consider this: By the time you have made a Capital appreciation, it will have been wiped out/ barely make a scratch against the years of subsidization costs.