Saturday, Aug 09, 2008
BTL novices in trouble
Telegraph: Buy-to-let mortgages plummet 93pc in a year
"The number of buy-to-let mortgages has plummeted by 93 per cent in the past year leaving tens of thousands of novice landlords struggling to find affordable deals." Game over for the alternative pension.
Posted by quiet guy @ 12:28 AM (1109 views) Add Comment
17 Comments
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1. paul said...
"landlords will need to increase the rents that they currently charge by 15 per cent to keep up with the changing market."
Yes, good idea. Ask tenants for more money at the wrong end of a recession - that should work!!
2. peter_2008 said...
"Selling up is a last resort."? Hmm not sure about that. The longer you holden , the bigger the lose will be. But what do I care, HA!
3. taffee said...
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Experts said the sharp fall in the number of buy-to-let loans available will hit the estimated 110,000 novice landlords with only one buy-to-let mortgage because they do not have a portfolio of properties to help cushion the blow of a slowing market
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really?...I reckon anyone with a pofolio of properties is properly shafted!
4. titaniccaptain said...
Alot of people must be cr@aping themselves reading that......they bought into the lie..........speaking of craping ones self.... I am...im playing with DJ fontanna (Elvis's drummer) in a few hours wish me luck guys aaaaaaaaaaagggggggggghhhhhhhhhhhhhhhhhhhhh
5. handle_it said...
From listening to people I work with I'm still of the firm opinion that a vast majority of people who haven't experienced a recession think "the credit crunch" is a blip or minor inconvenience. I think therefor that many BtL's will hang on in the belief that prices will recover. Sadly for them it may well indeed be better to cut their losses now instead facing complete ruin.
6. taffee said...
of course...and then as usual they will sell at the bottom crushing prices and so the spiral begins...they will vow never to buy property for investment again and the housing market will be in the doldrums for at least 10 years
7. Eternal Sceptic said...
I blame it all on the politically correct educational system. If you indoctrinate people to believe there can be no winners and no losers, it comes as no surprise to me that untold numbers come unglued when reality comes crashing through the door.
8. A_landlord said...
So the Savills guy says that selling is the last resort. He obviously doesn't want a huge influx of properties coming onto the market at the same time to cause a further oversupply and crash.
I will have 3 properties needing remortgaging next Easter, so my tenants have been warned for a maximum of a 5% increase and then depending on the deals available, I will either remortgage and try and fix for another 3 years or just accept the SVR of LIBOR+0.95% but with no expensive arrangement fees and maybe pay some off each to reduce the monthly payments. Luckily I have very low LTV on a few properties, so overall a have a healthy cushion if not all houses rent/mortgage rates go up.
Difficult to say what I'll do now, as the market can change dramatically over 6 months, but I have long term tenants of +2years and they don't want to (or cannot) buy a house and are happy renting, so no need for me to sell and as I see it --- not shafted yet.
I am not delusional, there will be a big crash - probably over 30% from its peak last October, but I purchased the properties to sell in 20 years time and as long I cover all expenses
It isn't all doom and gloom if you have
9. mark wadsworth said...
Tee hee, splendiferous.
TItanic Captain, best of luck with DJ Fontana.
10. layers said...
As Nelson from the Simpson's would say.... "Ha, ha"! I do feel sympathy for these people 'cos I have a big heart but really, you should have seen it coming!
TC - You'll be fine, enjoy and good luck to ya.
*** To Kirsty Allsopp - come on post a comment on this site, we'd love to hear from you. And how is Lord Daddy? Any tips on what on the Elite are talking about over dinner! *****
11. Sold Ok said...
"Buy to Regret" as I saw somewhere yesterday!
12. str 2007 said...
This government could sacrifice the BTL landlord to the credit crunch.
This will help accelerate house price falls and be good for votes.
13. paul said...
Best of luck Dominic Fontana!
"BtL's will hang on in the belief that prices will recover"
Yes, because people are risk averse in trying to guarantee themselves a gain when actually under current adverse conditions they should be taking the risk (putting the property on the market) to try to avoid a loss.
The press is their own worst enemy here - the longer they tell people to clutch onto the vain hope that things will get better, the longer this whole mess will take to play out!
14. Peter_2008 said...
There was a really good post here yesterday. http://www.housepricecrash.co.uk/newsblog/2008/08/blog-loss-aversion-and-finding-a-bottom-16067.php It explain perfectly about the human behavour machanism in a boom and bust circle, which is something that none small time bankers or EAs will ever understand.
15. peter_2008 said...
There was a really good post yesterday here. http://www.housepricecrash.co.uk/newsblog/2008/08/blog-loss-aversion-and-finding-a-bottom-16067.php. It explains perfectly about human behavouir in a boom and bust circle, which none average bankers or EAs even thought about. Yes, people will hold out, and yes that's why they will lose more and that's why the bust will overshoot on the way down as well.
16. Davip said...
As the landlord above shows, this is what's wrong with property ownership in the UK. The cost of borrowing goes up, so the tenants are 'warned' of a coming increase in the rent. Heaven forbid You should have to cover any of the cost of owning Your house, eh? The tenant repays the capital borrowed through rent, the taxpayer pays the interest on the outlay (becuase it's a 'business' expensen) and the landlord gets an entirely free house charged to the labour and pocket of everyone else -- all with the tax-concessionary blessing of our foul government.
It's about time the tax-break for the BTL leech was removed.
17. waiting for the crash said...
A_landlord
What happens when one of your tenents decides to move out because of the rent rise and you have a void, even one month, with you will have to cover from your income and also that you find re-letting your property into a more competitive letting market, (you can only rent your property at a market rate, just because your costs rise 10% does not mean you can pass them on) you receive less rental income. Or one of your tenents becomes unemployed and leaves you with rent arrears and costs for eviction? Be prepared! I'm laughing at your rational frankly.
Enjoy your period of delusion/denial - we laugh.