Thursday, May 29, 2008
Greed accelerates price decline in a downturn
Estateangels: Landlords should look for 40 per cent property discounts
"Landlord Mortgages has advised buy-to-let investors that they should be looking for around a 40 per cent discount on property" "If you are under market value today but are then undercut by 20 per cent in the next year then no, it wasn’t a good time to buy" like they say... PRICELESS!
Posted by confused76 @ 04:06 PM (857 views) Add Comment
8 Comments
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1. yorkshireman said...
I think we may see the decline in prices going exponential sometime soon.
2. Rental John said...
Denial - Fear - Capitulation?
Looks like the BTL business model is busted - which ever way you slice it.
3. hpwatcher said...
w*nkers!
4. Maddison said...
I post again to say that there has not yet been the deluge of BTL properties on the market. Just spoke to supplier who has £3m worth of buy to let property and he says "my mortgage rates have come down and my rent has gone up it is good for me." I keep expecting him to be worried but he isnt! Most BTL have gearing of less than 75% so can get the better deals. His was actually pegged to the BOE rate.
5. lvmreader said...
@Yorkshireman,
Absolutely!
6. dohousescrashinthewoods said...
Well at least someone in the industry is willing to admit that "low single digit falls" is a dangerous assumption.
40% eh? Almost as bearish as us lot. I suspect they may ultimately get their fingers burnt, even at that level of discount.
Interesting they mention reposessions as a source of discounts - dog-eat-dog in the BTL bloodbath.
7. doom&gloom said...
40% Below Market Value. Shame Inside Track went bust - they had some great BMV deals. Hard to determine market value now as nothing's moving. The only way to go is via auction. Missed today's live auctions, but there's another tomorrow. Last one I saw was a real bloodbath - more gripping than Sarah Beeny in a tight top.
Noticed there are around five times as many auctions on the list than at this time three months ago.
http://www.eigroup.co.uk/onlineauctions/
8. doom&gloom said...
@Maddison.
The BTL investor who bought before the boom has rental yields which will pay the mortgage, and will pay the mortgage whatever happens to house prices.
I think this investor has the best position of all of us. It's all very well selling up and hoarding a massive pile of £££, but if the £ devalues quicker than the value of property, I'd rather have a property portfolio bought at a 'fair value' than £££ in the bank.