Thursday, Nov 22, 2007
BTL is doomed
Times: Problems at Paragon Mortgages
"ARE WE LIKELY TO SEE A SIGNIFICANT FALL IN DEMAND FROM PROPERTY INVESTORS? Some commentators are predicting a drop in demand of as much as 20 per cent, while the Royal Institution of Chartered Surveyors predicts that buy-to-let is set to become the preserve of the wealthy. It has released figures suggesting that to purchase a buy-to-let property you would need to stump up a deposit of about £65,000 – effectively 30 per cent of the property’s value." Dead in the water, dead in the water UAUUUU AUAUUAAUUAU
Posted by confused76 @ 08:44 PM (386 views) Add Comment
4 Comments
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1. New User 2007 said...
I just posed this on the Times site. Do you think they will allow it on?:)
Should we really be listening to the likes of Assetz's or Mortgages for Business's "experts"?...
They are after all paid their salaries, bonuses and stock options based on a rising housing market....
A rising housing market requires the next mug in the pyramid scheme to stump up more cash than the previous one...
This means they will need yet another mortgage from the likes of, oh, the lenders...
The obvious fear from some mentioned in the story makes me wander what they are hiding on their books...
By trying to talk up the market (the lower deposits needed since 2002, allegedly), they inadvertantly say something...
They have been relaxing their loan criteria as early as that. This is worrying, given the lack of transparency...
Paragon, after all, sounded just as confident in the media just a couple of months ago...
I would recommend BLTs don't buy shares in these firms. That way losses will be limited to the housing deposit.
2. Ihopeitgoeswithabang said...
All of sudden the Mortage Industry wants to distance itself from the RICS.
Indeed "pouring scorn on their view".
Which is a little silly as even my dog would probably be able to work out the maths that BTL as a proposition now is dead.
Nevermind, half those people offering their important views from the mortgage industry probably wont have a job next year so we won't have to listen to them.
3. Si said...
I've been quite surprised recently. A number of converted flats have come onto the market in southville, bristol, recently, an area that's dubbed "Little Clifton" and priced optimistically (~150k for a tiny 1 bed flat with no garden). I cycle past a number of them to work. Half of them have sold... (and one has a For Rent sign outside)! It's a popular area and I can only think it's the last blow off from the investers and FTB's. Whilst I wouldn't mind buying in this area, I certainly could not at the moment.
4. dohousescrashinthewoods said...
If BTL goes down the tubes, there is no none left to fill the shoes of the FTB, so the market is dead as a doornail.
Sounds to me like demand was already falling and this will be a huge additional blow to convertible demand.