Thursday, Mar 13, 2008
"household rises, migration, immigration and housing supply shortages will help demand in the buy-to-let sector"
Mortgagestrategy: BUY-TO-LET SUMMIT 2008: Optimistic outlook for B2L
Speaking at the Four Seasons Hotel in Fleet, Hampshire, Michael Ball, professor of urban and property economics at Reading University, outlined a raft of figures and reports that give cause for optimism for buy-to-let landlords and lenders. He says: “The long term prospects for the buy-to-let sector are extremely good. Buy-to-let investors are in a good position. Rental demand tends to do well in a market slowdown.
“There are no signs of this much vaunted meltdown of buy-to-let.”
Posted by jack c @ 06:26 PM (1050 views) Add Comment
17 Comments
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1. tyrellcorporation said...
Jack, are you a housing/BTL bull?
2. hpwatcher said...
Jack, are you a housing/BTL bull?
Looks like it posting rubbish like that, though he has picked his time pretty well...in the sense that things are looking bad for the economy, in general, and housing in particular.
3. Fed Up said...
This has already been in the Times:
http://news.bbc.co.uk/1/hi/business/7282923.stm
but where do these BTLs think all the immigrants are going to come from?
If anything, a recession is going to lead to net emigration.
4. jack c said...
No guy's I'm not a housing/BTL bull - much more a housing/BTL bear - thought this little offering was very much out of the Connells and Azzetz comedy club routine - I'll post a sarky headline next time just to make position clear!
professor of urban and property myths would be more appropraite
5. quiet guy said...
Interesting article. I note that Professor Ball uses Paragon, the Royal Institution of Chartered Surveyors and the Council of Mortgage Lenders as sources for his analysis. Hm...
Here are another few articles relating to Professor Ball:
‘Don’t blame buy to let for house prices’
http://www.estateagencynews.co.uk/news/news-0307d.asp
Note the quote:
"The main driver of housing markets is interest rates and changes to the real economy, not the financial sector but general economic activity"
at http://news.bbc.co.uk/1/hi/business/1235297.stm
Introduction to evidence given to House of Commons:
"Professor Ball: I am Professor Michael Ball. I am Professor of Urban Property Economics at the University of Reading. I wrote a report for ARLA last year, and so they asked me to come along. The report was on buying to let after ten years."
http://www.publications.parliament.uk/pa/cm200607/cmselect/cmcomloc/uc47-iv/uc4702.htm
This professor seems to have a close relationship to some VIs.
6. uncle chris said...
It would be interesting to find out who provides funding to Professor Ball's department. Sadly, there are many "scientists" who are beholden to external funding influences - like a certain number of anti-Global warming "scientists" who, strangely enough, are funded entirely by large petroleum companies.
7. crash bandicoot said...
While you guys were blogging I tried to find out some more about professor Ball. He is a director of UPE Consultancy which seems to regularly produce reports for RICS, however they are a little shy of the limelight and I am unable to find a website for them. Interestingly though a group of Irish property speculators called in the good professor to back up their complaint about an RTE program speculating about the possibility of an Irish property crash (you can read the full details here http://magico.ie/files/admin/uploads/W153_Field_2_23412.pdf) Apparently 40% of bubbles don't end in a crash at all but experience a soft landing. Can I have two of those please?
8. Fwb said...
Crash, thanks for that link. It has explained something to me.
Recently I have been wondering why Ireland's housing market has started dropping and when you look at the economics it looks dead in the water. However, none of this would have happened without that nasty T.V. programme.
9. Old Sage said...
Absolutely right Uncle Chris. Many scientists in all sorts of industry areas have their research funded by VI's..it's a major problem as industry are the only ones with the money. Many supposed surveys are started by VI's too...makes you read your paper with a different eye eh?
10. confused76 said...
Here we go about immigration:
Poles leave for better standard of living at home
http://news.bbc.co.uk/1/hi/business/7282923.stm
Poland is a beautiful country, I cant blame them for wanting to leave the UK
11. crash bandicoot said...
I like the name "Mortgagestrategy". How's this for a mortgage strategy, get one that you can afford and then pay it back over 25 years? Can I have my consultancy fee now?
12. Stevie Dee said...
I made this remark earlier today. And Professor Michael Ball, is no better in my view than a slave merchant. To promote a house for the purposes of buy to let, is plainly immoral, packing places purely for monetary gain, is what the slave merchants did to slaves on the "slave boats" back in the 17th Century.
Has this guy ever heard of Shaftesbury or Wilberforce. The Professor needs to get a grip of his ego & his morality.
13. drewster said...
It's quite possible for rents to rise (benefitting savvy landlords who bought in the mid-1990s) while prices fall - in fact that's what seems most likely. For the last few years, prices have been very high relative to rents: the price-to-rent ratio has risen above its long-term average. This has now peaked and is coming down again. Over the next few years, we can expect the price-to-rent ratio to come down and eventually undershoot its long-term average. The most likely way for this to happen is for rents to rise while prices fall.
14. quiet guy said...
@drewster
"It's quite possible for rents to rise (benefitting savvy landlords who bought in the mid-1990s) while prices fall"
I agree that what you are saying is possible but the article gave no hint of the fact that anybody who enters the maket now is virtually guaranteed to lose money. The article looked very much like a sales pitch for the naive to me.
Rents may rise while house prices drop but will the rents rise fast enough to cover mortgage payments and equity loss on a property bought today? That seems unlikely to me.
15. hpwatcher said...
Poland is a beautiful country, I cant blame them for wanting to leave the UK
I did see that a survey about London, found it overpriced, dangerous - in terms of crime - with lousy weather.
It's a dump! If I had the chance, I would much rather live in Paris.
16. george monsoon said...
Here is a theory..
FTB's cannot buy because prices are too high and mortgage lenders, reluctant to issue loans.
FTB's rent instead, while watching the housing market drop, BTL's enjoy a good return with full occupancy.
When buying is once more an option,and the FTBs are able to enter the market again, they can't get a house because all the BTL brigade are once again buying up all the available property, pushing prices out of reach...B@$***ds!
Can anyone give me a reason why this would not happen?
17. new user 2007 said...
If the boost to the rental market is coming from FTBers because they cannot afford to buy, is the implication not then that their rent is lower than would be their mortgage i.e. they can afford to rent but not buy?
If rent is lower than the mortgage does that not then mean that BTL is subsidising the tenant. The reason they would do that is capital appreciation, but that is gone...
...in fact, the affordability issue for FTBs is one element, others are fear of falling prices and access to financing BUT these factors are also impacting BTL.
As for immigration (Poles now going home and to other parts of the EU as they have now opened their visa controls), housing shortages (seen many homeless people?) Japan comes to mind always.
All very odd.