Wednesday, Jul 30, 2008
70% of Landlords surveyed see house prices falling in 2008 (but rising rental yields and a long term view make it a good time to buy)
mortgagestrategy: 70% of B2L investors to expand portfolio this year
In the face of falling house prices and fears of a recession 70% of property investors are planning to grow their portfolios this year, reports the Property Investor Show. The event surveyed UK buy-to-let investors and found that the majority are looking to take advantage of rising rental yields.Landlords are not unaware however of the struggling economy as 65% of respondents believe the UK is heading for a recession and 70% see house prices falling in 2008.
Posted by jack c @ 11:22 AM (1040 views) Add Comment
11 Comments
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1. renting2 said...
Can't see this making any sense at all unless they buy property at at least 20% disacount. Then the've got to get the finance for it - where from?
2. peter_2008 said...
Read the show's news bullet... one BTL investor said "This is a valuable service to society, and, I have to say, a financially subsidised service to our Government. I would appreciate their support in these difficult times whilst I keep a roof over the head of some of their taxpayers.” Wow....I have seen more modeste pimps...
3. nooneo said...
And where exactly are these people going to get their mortgages? Are they going to get them by securing their loans against their diminishing portfolios? With Northern Rock effectively out of the new mortgage business, bradford & bingley thoroughly bunged up and the Alliance & Leicester also having difficulty, it's hard to see where these later day spivs are going to get the money to buy, what in effect are little negative equity bombs for their arsenal!
4. Charlie Brooker said...
If there were any justice the govt would put a stop to BTL until prices had returned to saner levels.
Here's hoping . . . . in vein.
5. Charlie Brooker said...
The fact the prices are falling make it a bad time to invest in BTL.
BTL is a business - not a private venture - and is subject to margin calls when the asset's price falls below the outstanding debt.
6. Stevie Dee said...
Two words: "Landlord Licensing"
7. beartil2010 said...
'One quarter of respondents predict the drop is going to be at least 9% and of them only a third believe that the market will recover by this time next year.'
Only 25% of these landlords think the market will go down more than 9%. As it's going down another 20-35%, that 25% will get a shock, and the remaining 75% will get a really, really nasty shock when they realise all their equity has gone.
As nooneo says, they probably won't get mortgages for an increased portfolio. But if they do, what the hell, more properties will be coming onto the market when they go bust! Shame about their renters having to move out - but they can then move into a property with cheaper rent as the supply to the market continues to increase over the next 18months!
8. Captainflack said...
Surveying people at a BTL show and finding that 70% expect to grow their portfolios is like surveying shoppers at a supermarket and finding that 70% of them intend to stock up their fridges or that 70% of the people in the queue at McDs expect to purchase a hamburger shortly. It is not a representative slice of BTL owners in general, only those that are still interested enough to bother going to a show. The only question I have is what the hell are the other 30% doing there if they are not in the market to expand this year?
9. plato said...
A new market is emerging and it is 'Renting'. It's not just HPC Bloggers and serious thinkers now. It's something every new buyer will consider seriously and something every loser will have to do.The silly stigma of ownership is unreal.
This is creating a more sensible approach toward property debt and more importantly; Competition that will result in value for the Renter. Rental yields naturally increase with the drop in property prices. Those with large,expensive to run properties will rent out rooms to help with costs. The only requiremnt is for people to behave,the law to act in their favour and the government to assist.
10. Will said...
If a house value drops by 20% then the yield will rise, however the rentlal income stays the same.
Another myth busted.
11. Stevie Dee said...
Plato spoken like a true B2Ler. Listen, the government should have brought in "Landlord Licensing" before starting the B2L market in the first place. Derreliction of duty and care to society. Furthermore, each property should have a Licence, and this includes, living-in landlords. And Licence for Agents, only because the standards or rules can set in line with Human Rights Act as well Health & Safety.
In my view though, when the housing market does go down, that the Government purchase housing stock at a low price, because they can. And buy compulsory purchase the rest at "fair market value" from the rest of ther B2L parasites. I believe, a home is sacrosanct in building a healthy & flourishing society, thus divorcing this with commercial enterprise & trade. B2L is not trade, it is 21 century legalised slavery/serfdom. You can't have one sector (age group) of society monopolising a facility or service because of their distinct advantage or some fly-by just buying up property, it surely in real business terms would face questions from the OFT, abuse of power. Fortunately the "invisible hand" is showing or demonstrating this clearly, because every other individual of other age ranges through mimicking such activities are going to pull the whole thing down. And rightly so!!!