Friday, Nov 30, 2007
BTLers' confidence has plunged
IFAonline: Investor confidence lowest since 2005 - Standard Life
"Buy to let property confidence has dipped more significantly, sinking from 23 points in July to 0" BTLers wish they had not grown their portfolios during the past year: rental income s@cks and assetz prices are gonna fall. What is the silver lining for them? NONE!!
Posted by confused76 @ 01:58 PM (685 views) Add Comment
10 Comments
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1. jack c said...
Several people I know started with a single BTL property approx 7 years ago and as that property gained in value they withdrew the maximum equity and used it as a deposit on A.N Other BTL and repeated the exercise over the years (you guy’s know the concept). On paper they became “wealthy” – a simple exercise of assets minus liabilities = £’s worth of wealth - this is then followed up by a property on the Costa but that’s another story.
The above exercise is fine when prices are rising year on year, the problem arises when prices stagnate or worse still begin to fall – couple this with rising mortgage rates, rental voids, property trashed by tenants, rising refurbishment/maintenance costs and absence of The Rock or Paragon to re-mortgage your entire portfolio and you are in trouble. I can see a parallel developing similar to that of the Split Capital Trust collapse several years ago – don’t be surprised if BTL in certain parts of the country simply implodes.
2. x blogger said...
The one thing that I cannot forsee with this looming crisis is what is going to happen with many tenants across the UK. This to me is the missing part of the puzzle. If the market freezes no problem. Markets rarely do that.
Could the market freeze? Buyers are needed to move a market.
A puzzle all the same. ???
3. x blogger said...
Could we be heading for a nation of squatters in repo houses that will not sell through auction houses.
Imagine the headlines for that senario.
A puzzle indeed. ???
4. realist75 said...
'Could we be heading for a nation of squatters in repo houses that will not sell through auction houses'
How about: a nation of squatters in 'luxury' off-plan BTL / BTflip rabbit hutch apartments?
These will become the new slums and the epitome of this housing boom.
5. X Blogger said...
My only solution to some of the puzzle.....
Fastest crash in history within 12-18 months bringing house prices to the mean.
Massive cut back of immigration and incentives for exising immagrants to leave.
A nationalisation of the banking system in some form.
This still leaves the problem of a very weak economy. Still puzzled.
Any comments please.
6. x blogger said...
I am seeking a solution?????
7. the northerner living in oz said...
The best way would be to allow a crash to run its course
Over 2 years.
This would get the pain over with quickly.
After about 12 Months for the U.K first nationalised bank to start purchasing all these buy to let’s at 50% or less of the current valuation.
And rent them out at a fair market rent to current tenants as long as they pay rent.
8. talking rot said...
A random thought for "x blogger":
If a nationalized bank repossesses a house and then continues to rent it to the extant tenants, then that housing is being provided through the State. Isn't that social housing? If local authorities are given responsibility for day-to-day management and maintenance, then isn't it the same as Council Housing?
Housing stock is nationalized without the Country paying a penny. Isn't that a clever scheme - you have to admit, Liebour has brains.
Of course, I don't believe any Government is sufficient imaginative to think up a wheeze of this cunning and no Government is sufficiently competent to pull it off.
9. Stevie Dee said...
Is x blogger really Alistair Darling? lol
10. x blogger said...
Guys now you are starting to cook.
Carry on in this direction and this site will be great not just good.
I know you can do this. Solve the puzzle.