Friday, Oct 12, 2007
more on the buy to let tulips from amsterdam
bbc news: britain's deflating buy-to-let bubble
so much then for get rich quick squad...I mean a man in derby has 13 buy-to-lets but ftb's cannot afford a house.Tide is changing and this articl just about sums it up.
Posted by taffee @ 07:48 AM (723 views) Add Comment
7 Comments
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1. inbreda said...
The beautiful Merryn Somerset Web was on the beeb this morning talking to a BTL (a "successful" BTL entreprenuer!!) who has amassed £8million property portfolio in 5 years. Odd that he knew how much all his properties were worth, but asked how much he owed he had to think about it before estimating the figure at £5.5 mill. "so if I sold everything I'd have £2.5 mill" he gleefully pointed out. "if you can sell such an illiquid asset" pointed out Merryn.
Brilliant. Shame it didn't last longer. The guy has worked 5 years riding a wave, lucky man, and will lose everything if prices drop 30%. Even the 2.5% DROP RECENTLY will have cost him 200,000. I wonder if he spends much time looking at it from that perspective?
2. happyrenter said...
If my envelope maths is right, Mr StripeySuit's CGT bill rises by £320k in April next year (assuming his £8m portfolio doubled over the last 5 years and they all have full taper relief)
from BTL to STSS (sell to stay solvent)......
3. Axxo said...
What about the 40% tax bill he get when he sells his £8mill of properties?
I bet the properties have been over priced and valued by a northern rock surveyor!!
4. uncle tom said...
Rents have only covered mortgage interest payments if the landlords have been fortunate with their occupancy levels, and they neglect maintenance.
Now that prices have stalled, interest rates are on the rise, and CGT changes are on the horizon, there is every reason to expect the more savvy BTLers to profit take. However, that could cause a temporary shortage of property to let, creating a brief upswing in rents. It will only be brief, because most tenants cannot afford a major rent hike..
What's the betting that the real, grade A++ fools then appear - and start buying into BTL...!
5. Tricky Dicky said...
Interetsing both because of the language used in the title and, more so, because it is currently the most emailed story on the BEEB website ;-)
In the e-age this is going to hit the ground so hard no amount of scraping and scrubbing will clean up the mess!
6. Axxo said...
Most articles about buy to let are not taking into consideration the true cost of ownership! All they ever say is how much money they are making from increases in house prices, but they have to pay the interest lost on the 15% deposit, making up the difference between the low rent and higher mortgage interest only cost ( in London for the last 2 years) the cost of insurance, mortgage arrangement fees, survey costs, no rent when tenants vacate and you have to find another, letting agent costs, redecoration costs, then the re-sale costs and ultimately the 40% tax your hit with when you sell!! Take all this into consideration and your not left with very much, even with 10-15% growth in London......So you think why bother, just stick the 15% deposit in a high interest bank account
7. sovietuk said...
What is it with Buy to Let ? - buying and overpriced shoebox which is basically just a millstone, exposing yourself to a level of debt that could potentially ruin you (who said interest rates will hover around 5-6% forever?), moaning tenants, hassle of decorating, hassle of showing new people around and just so you can say that you're into property at a dinner party.