Tuesday, Oct 23, 2007
Even though it's true!
Mortgage Solutions: Institutes slammed for buy to let stance
Assetz has criticised the Chartered Institute of Housing (CIH) for supporting the argument that buy to let investors have forced first-time buyers out of the property market.
Posted by disillusioned @ 01:03 PM (437 views) Add Comment
6 Comments
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1. Taxed2death said...
This is the dude that was ultra BULLISH on the latest money week property round table, he and his company clearly have alot 2 loose if the property maket falls. :-)
2. shipbuilder said...
We is finkin' dat you aint givin' us no rezpect, innit. Assetz is gangsta, no messin wit dem aiiii!
3. paul said...
We izz da Assetz Boyz!
We got brains n'all like, innit. We knowz our sheet. You izz all wi dem bobo Chartered Insitute a' wha'evar.
Aiiiie. Innit.
4. New User 2007 said...
Assetz has criticised the Chartered Institute of Housing (CIH) for supporting the argument that buy to let investors have forced first-time buyers out of the property market.
= if a BLTer with a house sees its value go up (allowing a withrdrawing of equity for a deposit), while assuming the same income as a FTB (probably higher for a BLT as they may be older and have a lower/older mortgage on their main home), they then have access to a larger deposit. Until the market went crazy from 2003 this meant they were a safer bet for lenders i.e. potentially bigger deposit and/or paying from own income (less needed for own mortgage payments), as well as the rental income...they then got access to mortgages and could out-compete FTbers. (After 2002 we entered the higher and higher multiples allowing upward price competition among buyers owing to easy money and rents no longer covering interest payments...the Ponzi scheme began.)
Stuart Law, chief executive of Assetz, said he disagreed with Paul Diggory, president of the CIH, that tax relief for buy to let investors should be abolished.
Law commented: “To suggest that buy-to-let landlords have caused house prices to go up and that they should now be victimised, singled out from other businesses, is a simplistic and blinkered view. We have also seen the Institute of Directors backing up this misguided suggestion. As a member myself, I in no way support this stance and was never consulted before they took the decision to speak out, supposedly on my
behalf.”
= Just as private banks get special treatment from the government owing to their links with the real economy and potential for systemic risk, the housing market is also clearly different from a normal business and so should be taxed for social reasons.
He added the property rental market not only made a significant contribution to the economy, but recent figures from the Royal Institution of Chartered Surveyors showed with demand outstripping supply, a sudden withdrawal of landlords from the market would mean steep rent hikes for consumers.
Demand for rental is outstripping supply broadly in line with BLTers increasing as a percentage of house searchers almost in the same proportion as FTBers being priced out by BLTers, who with more equity have EASIER TERMS ON LOANS. Rental demand is therefore there precisely because FTBers can't buy a house i.e. a circular argument.
I am sending such responses to virtually every story where there is an opportunity to do so. Does anyone this doing this is a waste of time? Thanks
5. paul said...
The lag between the costs of buying falling and rent falling is exactly why house prices will keep plummeting until they trough out, and there will be no early reprieve.
If loan costs don't fall quickly, and rent stays high, then in the medium term the withdrawal of landlords from the rental market won't make a jot of difference to FTBs looking to move out of rented accommodation.
I think you are wasting your time, New User. Not because what you say isn't true but because they already know that but no-one wants to say it out loud.
6. New User 2007 said...
Thanks Paul.
I am just hoping that if I send out enough comments on newspaper sites and contact enough of the journalists writing these stories, that at least some of them are writing what they do because they don't actually know how to analyse or see through what the vested interests are saying (rather than because of an editorial line or a vested interest....although I am sure these dominate). They may at least one day say something else (I suspect not with this particular journalist i sent the above to...given the site it was on).
Just want to do my bit for the truth, but it does seem like a rain drop against an ocean.