Monday, Aug 18, 2008
Running scared from BTL 'investments'
Times: Landlords to withdraw billions from buy-to-let
Around £18 billion of cash will be pulled out of the buy-to-let market in the next few years, further destabilising the housing market, according to a new study. The research, by the financial services firm Skandia, suggests that landlords will be driven from property investment by falling house prices, higher mortgage rates and sluggish rental growth. It forecasts that the stock of buy-to-let mortgages will collapse to £44 billion from £120 billion at the end of 2007. Assuming the average loan-to-value ratio of 80 per cent that would be sufficient to release £18 billion of cash tied up in property investments.
Posted by bufferbear @ 07:04 PM (409 views) Add Comment
4 Comments
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1. yorkshireman said...
Where are the buyers, who are doubtless clamouring to buy the property on offer and more importantly who and where are are their lenders ?
Answers on the back of a postage stamp please.
2. drewster said...
There are two contrasting attitudes here:
Old professional landlords: "The yields are terrible, I'm better off selling up and getting out now even if it means accepting a lower price than six months ago."
New accidental landlords: "I can't sell my house for what I think it's worth, so I'll let it out for a couple of years until the market recovers."
3. Nocibomber said...
drewster, I hope the new accidental landlords factor in the cost of redecorating after a couple of years letting to people who don't give a to$$.
4. Jacket said...
If correct, this would be an extra £84 billion (76 + 18) worth of property coming onto the market in the next few years.
Assuming an average property price of £170,000, that is equivalent to 494,000 properties.
Current average sales volumes are around 50,000 per month, so this is an almighty number of extra properties that will flood the market.