Wednesday, Dec 12, 2007
Buy to let still alive.......
Home Move: Buy to Let lending remains bouyant
Err CML says Buy to let increased in October.... Comments please
Posted by maddison @ 10:53 AM (1473 views) Add Comment
24 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. Debtfree said...
Investors use auction houses. You won't see many people paying top price through the estate agents at the moment which is why mortgage lending is down. But, BTL is for investment, so they could reflect the amount of properties being snapped up for less at the auction houses ?
Its just a guess.
2. techieman said...
BTL MORTGAGES increased (not same as BTL increased). Johny come lately / remortgaging / MEW particularly to fund voids or difference between costs and rental income/ or having to stump up for off plan dues ? Any way doesnt provide support for not having reached the peak of a market, so pretty inconsequential, unless the data was more detailed.
3. geed said...
This may be true but as Techieman says some survey's include MEWing as a "new" mortgage and does not specifically monitor "brand new" mortagaes which is the key indicator. Clearly this skews the data massively and like the majority of surveys out there provides a truly unreleastic picture.
4. paul said...
Are you trying to say that the price falls are illogical or the last rush into buy-toi-let?
Prices are still dropping especially on BTL properties which are typically new builds. If people are rushing in to buy an asset that is falling in price, and falling at an accelerating rate, then that's because they're not very clever, that's all.
5. Hpwatcher said...
As house prices lower in value, there will inevitably be an increase in activity from those who expect the market to quickly recover. I expect the figures to decline, substantially, as we enter 2008 i.e. as the economy moves deeper into recession.
6. uncle tom said...
Why, in December, are the CML putting out a press release based on the 3 months to the end of October??
Given the time lag between purchase deals being agreed, and mortgages being finalised, this mostly reflects pre-crunch deals.
Looks like they're scraping the barrel here...
7. maddison said...
February will be the key month as all data will be post crunch and all banks will have reported in the US giving a better picture of sub prime woes. Bonuses will be paid and the banks will have another financial year to start lending again....
8. cyril said...
I think statistics on BTL mortgages can be a bit unreliable - for example the arrears statistics.
A lot of people who moved house recently have kept their old house and taken out a BTL mortgage on it. Therefore these people are (a) not likely to be in arrears and (b) if they are, they can choose whether the arrears are on the BTL mortgage or the other one.
I know one person who did this because they couldn't find a buyer for their old house so they rented it out. D'oh!
9. Cash In The Bank said...
My friend has just taken out a new BTL mortgage for the house he has been renting out in Leeds for the last few years. He's MEWed himself a nice Audi out of it, but admits that the rent no longer covers the 35 year mortgage repayments. I fear that by the end of next year he'll be in NegEq, especially in Leeds, the land of over-supply!
10. jack c said...
From today's FT adviser
Landlords at the coalface remain unconcerned about reports of a slowdown in the buy-to-let market, according to Mortgage Express research. Almost nine out of 10 landlords told the intermediary lender they plan to either increase their portfolio or leave it untouched in 2008. About 95 per cent said they are positive about rental yields, which were holding steady at 5.72 per cent. When asked about the prospect for rent levels in the next six months, 95 per cent of those surveyed believe rental yields will remain robust, with a third expecting them to rise and 62 per cent expecting them to stay at the same level.
11. Morencyo said...
Paul, might it be that their thinking that even if capital prices are on a downturn, then rents must improve offering attractive yield positions. They are obviously looking at a longer position from a capital perspective betting that the market will recover. in my view this is spot on providing they buy in the right area.
12. Morencyo said...
why are my comments not posted?
13. drewster said...
Maybe some amateurs are still coming into the market. Whereas a professional is quick-moving, an amateur will have been mulling over the idea of BTL for a couple of years now without really bothering to do anything about it. They probably don't follow the news much and certainly don't read the business pages. Recently they've received a letter inviting them to a "special offer" from a developer or lender, or perhaps they've been on a BTL seminar. They think that now is a good time to pick up a bargain so they jump in.
14. little professor said...
15. Nkemp1000 said...
These figures don't make any sense.
In October there were 88,000 new mortgages for buying a home (BoE figures), yet this artice tells us of 991,600 BTL 'approvals' in a quarter (divide by 3 gives us about 330,000 for October).
The figures are spin and worthless.
16. paul said...
very good professor.
The logical disconnect between the current set of circumstances and vested interests' projections of future growth hasn't been picked up on in a lot of the wider media, mostly because the media have become so used to just parrot-phrasing anything the vested interests tell them to say.
17. paul said...
jack
"mortgage express research"?
18. jack c said...
Paul, yes Mortgage Express research, completely impartial, no vested interest - you can't help but admire them in a way for continually trying to keep the thing afloat with hot air.
19. jack c said...
Drewster - excellent pick up – I know two people who focus almost exclusively on arranging BTL mortgages largely introduced from property developers/advisers and I put the question to them recently that surely buying off plan etc was beginning to slow/dry up. The response was that the BTL mortgage applications are now coming from “amateurs who are new to the market and don’t really know what they are doing”.
20. Debtfree said...
why dont you post my comments ?
21. maddison said...
People seem to think that anyone new to the market is an amateur and the people who have been in the business for a couple of years are professionals. Basically any BTL has had to do nothing much but just watch as the agent brings in the tenants. The real amateurs will be exposed when rental demand starts to fall off. Not sure when that will happen though. Apparently the eastern europeans will return to their own countries in a few years just like the spanish and greeks did after EU enlargement in the 70's
22. techieman said...
Mortage Express? "Got that Mr Bradford? Securely Mr Bingley"
23. Urine Trouble said...
I was talking to an agent the other day, think he left school this summer. I told him I am waiting with my cash to buy a house when prices come down, he replied, " the local market has gone from frothy to crunchy in a matter of weeks" What the heck does he mean?
24. new user 2007 said...
What Uncle Tom said sums it up. The data reflects approvals pre-crunch. The same loans would probably not be given out now.
This is all the usual VI game. One week crying foul an ddoom (as the CML did) before the interest rate decision, and then bringing out something to encourage buying. It is a pity the BoE does not see the game/pattern.