Friday, Jun 22, 2007
Unbelievable, sickening press release
Assetz: First-time buyer plight brings buy-to-let opportunities
The difficulties first-time buyers have been suffering in trying to get on the UK housing ladder are well known. Rising house prices, particularly in the most expensive areas such as London, the impact of other debts on their ability to raise the deposit and the refusal of the chancellor to raise the stamp duty threshold in the last two budgets to take into account rising prices have all added to the growing woes of this beleaguered group of would-be homeowners.While such a situation persists, there is a clear opportunity for the buy-to-let market. The NAEA figures suggest many are giving up, at least for now, on any hopes of owning a home. Many may be biding their time and waiting for a market correction, or put off by the current level of interest rates....
16 Comments
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1. Realist said...
That's brilliant. Rising interest rates and sky-high prices are putting off first time buyers, but what a magnificent opportunity for the canny BTL investor.
2. Deadspider said...
Um , .... , okay , what did this unnamed hack actually add ???
Can I please get a job like this , um , pleaze ?????
3. Scott said...
How funny! I thought the labour party existed for the weak. Thatcher's dictatorship has obviously cast a long shadow!
4. paul said...
Assetz. With a name like that its difficult to believe that anyone takes them seriously.
5. Freefall said...
So, unable to afford a mortgage of their own they can afford to cover someone elses mortgage interest payments? This really is an article for morons....
6. Planning4acrash (previously Pr) said...
So, the plight of BTL lenders will be beneficial to BTL'rs. Well, yes and no. Yes for those who bought years ago at decent prices and didn't leverage themselves to the hilt. No for those on 90-100% mortgages who bought recently. The crash is about loosing the froth, rather than about loosing the entire market. Of course there will be one or two BTL'rs who will benefit. The sensible ones. My dad for example owns 60% of a single flat in London that he once lived in and bought about 5yrs ago at a decent price, a very sensible investment and he will do fine from a crash, even tho he would have done better by selling at christmas time and putting his money into bonds!
7. royston said...
That's like arguing "there's more sea for the other boats because the Titanic sank".
8. converted lurker said...
I admit it's hard to take them seriously, given the quality of the article/press release - might have well as scrawled it in crayon. However, they're either dangerously out of touch with the overall mood and sentiment in the media lately, or they believe that their message will resonate with their audience, either way it pi55ed me off, very poor...
9. Christopher1955@hotmail. Com said...
I have read the earlier comments. I am a property investor with a very substantial property portfolio. It is a business that I enjoy and gives me a fair reward. If it were a business that exploited the first time buyers and made it impossible for them ever to enter the property market, I would not be part of it.
The problem within the UK property market is the chronic undersupply of properties. Kate Barker in her report suggested that 200,000 new homes were needed every year and I believe that the Government has now revised that figure to 230,000. The builders and developers are barely pushing 160,000 to 175,000 leaving a massive shortfall.
As a property investor I am involved in the purchase of a number of new homes from developers. One way of looking at this is that for every home I purchase, there is one less available for a first time buyer and that will naturally push the price up.
The other way of looking at this is that because the builder and developer know that I will always buy one of their homes, they have a ready market. This means that every home they build will always have a buyer. Consequently, they can build at an unlimited rate. If they build at an unlimited rate, they will have a better chance of meeting the Governments target of 230,000 new homes every year. If these targets are reached, house prices will stabilise because there is an adequate supply to met demand.
Thus I see the buy-to-let investor playing a very significant role in allowing the builders and developers to met the Government targets of house building and bring stability to the market which will allow every first time buyer to buy there own home. This will deliver on the mission statement ‘Making every property a possibility for anybody’.
10. glen said...
I have read the earlier comments. I am a property investor with a very substantial property portfolio. It is a business that I enjoy and gives me a fair reward. If it were a business that exploited the first time buyers and made it impossible for them ever to enter the property market, I would not be part of it.
The problem within the UK property market is the chronic undersupply of properties. Kate Barker in her report suggested that 200,000 new homes were needed every year and I believe that the Government has now revised that figure to 230,000. The builders and developers are barely pushing 160,000 to 175,000 leaving a massive shortfall.
As a property investor I am involved in the purchase of a number of new homes from developers. One way of looking at this is that for every home I purchase, there is one less available for a first time buyer and that will naturally push the price up.
The other way of looking at this is that because the builder and developer know that I will always buy one of their homes, they have a ready market. This means that every home they build will always have a buyer. Consequently, they can build at an unlimited rate. If they build at an unlimited rate, they will have a better chance of meeting the Governments target of 230,000 new homes every year. If these targets are reached, house prices will stabilise because there is an adequate supply to met demand.
Thus I see the buy-to-let investor playing a very significant role in allowing the builders and developers to met the Government targets of house building and bring stability to the market which will allow every first time buyer to buy there own home. This will deliver on the mission statement ‘Making every property a possibility for anybody’.
11. Scott said...
Hi Glen.
I see that you seem to be a person with a conscience but under-supply is a myth. There are thousands of properties that are empty in Cambridge alone. Even here in London, if you go past a block of new flats at night, there are hardly any lights on. Japan is the same size as us with twice the population but they are still recovering from the crash of 1991. They keep putting new blocks up in Manchester, even though the population has been declining for the past 25 years.
The novice buy-to-letters will suffer in the forseeable future. The larger ones such as yourself will be okay. But the worry is the divide it will create among the haves and have nots.
Will your son be able to get into University because you can easily buy the exam papers from the teacher who lives in the cabin next to your dust bin? Will you be able to drive at any speed you want because the next cabin is where PC MunRoe lives? Have a coproximal addition, no worries, nurse Jenny at cabin 11 will sort you out.
12. talking rot said...
Glen
If the problem is too little supply and not enough demand, then rents should have risen in line with property prices. Rents haven't risen in line with prices and thus the current high price of houses can not be linked to a straight supply-demand situation.
Japan has a population of 80 millions and less land available for houses. However, from the early 1990s until recently, property prices fell. The cause of the Japanese high property pirces was speculation. When people are broke, it doesn't matter how much demand you have.
I would be very interested in your thoughts on the impact of speculation upon prices. Please tell.
Also, there are a few Bloggers here who have an extreme view. I think your voice as an alternative view is good. Please don't be put off.
General Patton -> "If everybody is thinking the same, then no one is thinking."
13. royston said...
Glen,
Most of us here think that the problem is excess investor/speculator demand fueled by overly-cheap money, rather than an actual lack of supply. After all there has been very little change in population numbers over the past 10 years. We only need more houses now because people are trying to use houses as a store of wealth. They have done so because they have lost faith in their pensions. Houses are for living in. Investors should use gold as a store of wealth. If investors had been buying gold with the same gusto with which they have bought property, the price of gold would have gone through the roof. The same is true for tulip-bulbs, works-of-art, classic cars or any other non-perishable item you care to think of.
14. Stillthinking said...
People keep making comparisons between the UK and Japan housing situation. We are not culturally the same. The Japanese live in much smaller apartments in high rise blocks, they reuse rooms. A home in Japan is somewhere to sleep not somewhere to live. In my personal opinion, they are extremely used to cramp conditions to the extent they have mild agrophobia (whatever the name of open space fear is).
Accordingly, their requirements for land bear no comparison to the single person, parents & kid requirements of the UK. If you have a fixed budget in Tokyo and you want to live in an expensive area, you can literally reduce the size of the apartment down to something barely capable of holding a bed.
Uk flats are a pretty large fixed size, and micro-apartments are obviously unpopular. Plus typically people want to buy, the Japanese tend to rent and then move into the house of their other half to look after parents.
So, UK housing is UK housing. Comparisons with Japan don't make sense to me. Aside from that, I agree with the view that the present high prices flowed from low interest rates.
15. confused76 said...
Glen,
no offence... uk property was a good investment until a couple of years ago, now is a hype, like dotcom stocks in late 90s.
wanna have some evidence of that:
- rents are not increasing at the same rate as house prices (they would if housing shortage was the key factor)
- house price inflation peaked when IRs were lowest and is now moderating thank to the BoE rate rises
16. Orwell said...
Glen,
I think we should build on everything so everybody can have one or two buy to lets...and ? I think particularly in London we should start building on the green parks, the playing fields and the children's parks.
Excellent idea...build over everything and cover it in buy to lets ... I have no problem with that.