Saturday, Oct 20, 2007
Listen to John Heron!
MortgageIntroducer: New build speculation is not buy-to-let
"John Heron looks at the differences between new build and buy-to-let and why the latter will continue to flourish. Established investors – and that often means people who’ve been in the industry for a decade or more – know pretty accurately what types of home will appeal to each type of tenant, where they want to live and how much they are prepared to pay. They also have a good idea of the number of other landlords with similar properties, so they can avoid being in a market that is swamped by over-supply." This is a cr@p!
Posted by confused76 @ 05:47 PM (270 views) Add Comment
2 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. New User 2007 said...
I find this story quite funny for a number or reasons. A major one being inconsistencies and what I have seen in reality (including friends who are professionals working in the city doing buy to let). For example, on the one hand, new builds are "only 5% of buy-to-let"..someone should let the high street banks know, as they are cutting a lot of buy-to-let mortgage offers for institutions targeting just 5% of this market. I have seen buy-to-letters buying where rents will in no way cover even interest payments. They, like my friends, are relying on leveraging their deposits to make a capital gain. One circular argument is almost insulting. There is demand for rentals because of the surge in buy-to-lets having priced so many out, so using that to justify continued rises based on demographic trends and demand is playing the figures at best. And a BIG FINALLY…..the impression I get from the story is that house prices cannot fall (an argument no doubt good for those providing buy-to-let mortgages), and one belief that most buy-to-letters rely on. The finally comes from having a look at the site of the experts who are talking about the impossibility of a crash. Generally, given their level of confidence regarding prices only going up, why do they need such high and rising LTVs? They should only need enough to cover basis taxes and administration, as if this has not been one big liquidity Ponzi scheme, prices will surely be higher when it comes to repossession. Moreover, if there is so much demand out there, there should be no worry about houses being sold at fire sale prices if they are repossessed. There own actuaries are not as convinced it seems.
2. New User 2007 said...
I find this story quite funny for a number of reasons. A major one being inconsistencies and what I have seen in reality (including friends who are professionals working in the city doing buy-to-let). For example, on the one hand, new builds are "only 5% of buy-to-let"…..someone should let the high street banks know, as they are cutting a lot of buy to let mortgage offers for institutions that are targeting/restricting just 5% of this market. I have seen buy-to-letters buying where rents will in no way cover even interest payments. They, like my friends, are relying on leveraging their deposits to make a capital gain. One circular argument is almost insulting. There is demand for rentals because of the surge in buy-to-lets having priced so many out, so using that to justify continued rises based on demographic trends and demand is playing the figures at best. And a BIG FINALLY…..the impression I get from the story is that house prices cannot fall (an argument no doubt good for those providing buy-to-let mortgages), and one belief that most buy-to-letters rely on. The “finally” comes from having a look at the site of the experts who are talking about the impossibility of a crash. Generally, given their level of confidence regarding prices only going up, why do they need such low and falling LTVs? They should only need enough to cover basic taxes and administration, as if they really believe that this has not been a liquidity driven Ponzi scheme, prices will surely be higher when it comes to repossession. Moreover, if there is so much demand out there, there should be no worry about houses being sold at fire sale prices if they are repossessed. Their own actuaries are not as convinced it seems.