Monday, Jul 23, 2007
Hey Landlord Post This!!!
Telegraph: Buy-to-let repossessed
At an auction room in Covent Garden on Thursday, 52 of the 179 flats and houses that went under the hammer were on sale "by order of the mortgagee" - in other words, they were repossessed properties. A closer look at the auction catalogue reveals that many were new-build flats that had been sold to buyers with incentives such as stamp duty and legal fees paid or rental guarantees, suggesting that they were bought by budding buy-to-let landlords.
Posted by nearly30 @ 04:15 PM (190 views) Add Comment
5 Comments
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1. nearly30 said...
Looked into this from rough stats available via CML and BoE:
Mortgage +3 months in arrears
YEAR TOTAL % OF TOTAL IN ARREARS
1999 73,200 0.50
2000 120,300 0.47
2001 185,000 0.55
2002 275,500 0.40
2003 417,500 0.33
2004 526,300 0.66
2005 701,900 0.65
2006 849,900 0.59
ALL ORDINARY MORTGAGES
YEAR TOTAL % OF TOTAL IN ARREARS
1999 10,982,000 0.88
2000 11,173,000 0.85
2001 11,247,000 0.72
2002 11,364,000 0.59
2003 11,452,000 0.45
2004 11,512,000 0.47
2005 11,596,000 0.54
2006 11,704,000 0.50
What is interesting is if you notice - as IRs have come down - the number of arrears has also come down for general mortgages.
But, BTLers have more or less stabalised! So, is BTL really a good investment? Rental yields have been declining!
Is it the case that the stats reflect that more have either just found the investment too difficult to manage without raising / rising rents - the 'chancers' of the show?
IMHO. I think the recent trend for Buy to Leave Empty goes to show that the game is up - as HPI has gone too far - and with IRs going up - any stall will see BTL investment portfolios shedding properties much like a mange ridden dog sheds hair!!!
2. nearly30 said...
Sorry didn't come out well - here it is again:
Mortgage +3 months in arrears
YEAR ~ TOTAL ~ % OF TOTAL IN ARREARS
1999 ~ 73,200 ~ 0.50
2000 ~ 120,300 ~ 0.47
2001 ~ 185,000 ~ 0.55
2002 ~ 275,500 ~ 0.40
2003 ~ 417,500 ~ 0.33
2004 ~ 526,300 ~ 0.66
2005 ~ 701,900 ~ 0.65
2006 ~ 849,900 ~ 0.59
ALL ORDINARY MORTGAGES
YEAR ~ TOTAL ~ % OF TOTAL IN ARREARS
1999 ~ 10,982,000 ~ 0.88
2000 ~ 11,173,000 ~ 0.85
2001 ~ 11,247,000 ~ 0.72
2002 ~ 11,364,000 ~ 0.59
2003 ~ 11,452,000 ~ 0.45
2004 ~ 11,512,000 ~ 0.47
2005 ~ 11,596,000 ~ 0.54
2006 ~ 11,704,000 ~ 0.50
3. nearly30 said...
Sorry being a bit rubbish - holiday brain.
Top block of data is for BTL mortgages
Bottom is all other mortgages
Hence smaller totals for the top block - although the growth is massive from 73,200 to 849,000 - WOW!
4. paul said...
Nearly, I'm sure you have a valid point there but I'm not sure you've articulated it for the hard of understanding here. Anyway, the gist of the article is clear, and the general climate is evident.
NEW -BUILD BUY TO LET IS BOMBING.
5. Orwell said...
Well what we know and have known for some time then:
1. The flats 'sold' (with Dean's 20% discount?), with incentives, for between £224,995 and £249,995 last year.
2. Their reserve price at the auction last week was £140,000.
3. 5 sold for £145,000, the other for £155,000.
4. Local estate agents have similar flats in the development on the market for £180,000 so the average price is 20% less Dean, meaning (180 / 120 x 100 = £150k), yes about right it seems.....
5. There are dozens of properties vying for every tenant..People will have to take a massive drop in price if they want to shift the properties.
6. Experts fear the number of repossessions will only increase. The number of buy-to-let mortgages rose by 50 per cent last year to 330,000, according to the Council of Mortgage Lenders. But over the same period the Bank of England has raised interest rates by 1.25 percentage points.
7. A further rate rise is expected soon.
8. Recent figures from the Royal Institution of Chartered Surveyors revealed that the percentage of landlords offloading properties had jumped to its highest level in two years.
9. If prices fall, as they appear to have in certain areas of the market, then selling out could prove problematic.
Dean, are you still with us?
Dean.....
Dean......?