Friday, May 16, 2008
By 'prevent', they mean 'cause'
Landlord Expert: Buy to let will prevent a housing crash
Strong rental demand will underpin the buy-to-let market and help the country avoid a more painful housing crash.
"All our anecdotal feedback is that significant landlords... are absolutely seeing the current market environment as an ideal opportunity for them either to continue to expand their portfolio or to start expanding them again," said Jeremy Law, head of buy-to-let at [f'cked] mortgage lender Bradford & Bingley.
Like other banks, B&B says the fundamental drivers behind buy-to-let -- immigration, fewer people per household, a more mobile workforce, first-time-buyers unable to get on the property ladder -- remain, and are driving rents higher.
Rising rental yields in turn mean landlords are able to pass on the impact of rising mortgage rates straight to tenants.
21 Comments
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1. mark wadsworth said...
"Immigration"? "Emigration", more like!
No doubt they'll spin it "Now that loads of undesirable Polish plumbers are jumping the sinking ship, many areas are becoming more desirable again"
2. denzil said...
This is little more than spin from B&B in attempt to raise money through a rights issue. Unless I'm wrong, B&B primary market is BTL so it is in their best interest to flog this particular dead horse.
Apparently a share-holder revolt is on the cards for B&B. Seems like the chairman has a hint of Applegarth about him.
3. vindicated said...
Bullsh*t. Rentals round our way are stagnating just like those properties that are for sale. I'm seeing rental prices fall here already!
4. gone-to-colombia said...
So, if I understand this correctly, these tuned on high power land lords are purchasing bargains in a market that has only just begun to crash?
If they were so smart why not wait longer, the market has clearly got much further to fall, or wait a while to when it seems to have reached its lowest?
Only a fool would believe this article.
5. uncle tom said...
Just a re-work of that desperate rubbish from B & B that came out a day or two ago.
At 1pm today I had a chat with my stockbroker at Brewins (to trim some dead wood) and casually explained why I thought B & B would go bust (too much BTL)
By 2pm the share price (which had been up for most of the morning) had dropped nearly 1.5%.
This is not the first time - last time we had a chat I cautioned over Barratt homes and that also took a dive after I hung up.
Perhaps they're listening to me...
...so who shall I slag off next time?? ;)
6. nubbers said...
I have seen mention of rising rental yields in this and a number of other VI articles. As as yield is a function of rent/price, your might have thought that people would realise that an increase in yield can be because of an increase in rent or, as might seem more likely at the moment, a fall in price.
I guess that anyone considering buy to let at the moment (target audience for this article) is so mathematically challenged that they will not realise what rising yields really signify. As has been pointed out before, all the more rich pickings to be had in a few years time.
7. malct said...
would it help to take some pressure off this evolving website if admin created at system whereby posters could communicate one 2 one but still annon?
just a thought.
8. Jimmyb said...
Rentals around here, Dorset are actually going down.
9. montesquieu said...
'Head of Buy to Let at B&B'
There's a job with a future if ever I heard of one ....NOT!
10. wdbeast said...
Maclt - great idea, one 2 one, so you can indoctrinate people with your twisted ideas away from the blog!
What exactly is your reason for posting here?
11. Davros said...
The crash is already underway, talk to anyone who's sold a house recently. Anyone who buys now is a fool, be it buy to letter or first time buyer. Anyone who thinks otherwise has their head in the sand.
12. malct said...
9. wdbeast said...
"Maclt - great idea, one 2 one, so you can indoctrinate people with your twisted ideas away from the blog!
What exactly is your reason for posting here?"
A Common Purpose
how about you - what was your last post?
13. Malct said...
9. wdbeast said...
Maclt - great idea, one 2 one, so you can indoctrinate people with your twisted ideas away from the blog!
isn't that what james wants?
beastie - explain some of my Twisted ideas - right now - without phoning a friend.
webmaster please make a note of this threat
beastie - who are you?
14. wdbeast said...
malct - "A Common Purpose"
Please explain, a common purpose for whom?
15. wdbeast said...
malct - why do you really post on here?
Very few of your posts are directly related to HPC.
What is your VI?
16. wdbeast said...
malct - What's up?
Don't you want a one 2 one with me in public?
17. Chasbmw said...
Funny idea that rents are going up...................my local paper has 8 pages of rental props and rents are not rising...........Mine has gone up £10 a month(1.5%) for the next 12 months, does not keep up with inflation.
when house prices were rising, there was no 'cost' in hanging onto a largish property as it was making more than your pension payments every month! With prices in decline lots of people will make more sensible decisions about their use of property and i can envisage a lot of underutilised stock coming onto the market.
Charles
18. jack c said...
First of all this article should be consigned to the "comedy Club" along with Stuatz comments
Couple of points (1) My nephew and his girlfriend have for several years rented a rabbit hutch, sorry I mean new build appartment - the landlord recently pushed up the rent by approx £100 per month (I suspect because his mortgage payments have increased due to a fixed rate coming to an end) consequently my nephew very promptly moved out and found a better terraced flat with much more space etc for less than he was originally paying !! - so these morons can print what they want but in the real world it is very different to what they portray.
(2) Have today attended an investment seminar run by a small specialist company (the usual vested interest presentation as they want cash to grow the fund). Interestingly they stated that the "credit crunch" (I'm really sick of this cliche) will last in their opinion for at least another 2 years - this partly ties in with Abbeys forecast that lending levels wont return to the 2006 levels for another 5 years.
BTL = Bridge that loss in many cases
19. uncle tom said...
It would be appreciated (in this quarter, at least..) if this site could come out of the dark ages and use some of the tools now commonplace on other blogs..
I'm thinking of private messaging and edit facilities in particular - the free to use php BB software is very good for this..
Come on admin, speak to us for a change - we never hear from you...
20. new user 2007 said...
Another great piece of analysis from a neutral source...
B&B, itself in trouble because of BTL, says BTL is great and low risk (the reason BTL financing has disappeared is because it is considered high risk...Northern Rock is now showing bad loans are worse than it said).
BTL is dominated by long term investors (they are trying to say most entered about 10 years ago..more than half entered in the last 2 years, when returns came only from capital an dnow they are just subsiding without capital growth to offset).
Jack C, I agree, I do not know of anyone who is paying rent above the cost of how much it would cost to pay the mortgage if they bought. I doubt only the people I know are that lucky...the landlords who bought years ago can still charge less and do, while the new ones may raise but not by enough to offset their increased mortgage payments...
I like comment on immigrant inflows (they are leaving, forget just not new ones coming in, which would be enough to undermine the market) and strong economy (it is only now beginning to weaken and repossessions rose when booming) will support BTL.
Incredible, as always.
21. Mr Mister said...
RE: new user 2007 said...
"Another great piece of analysis from a neutral source..."
Errrrr.....pot calling kettle black! lol
Incredible as always? Right back attcha!