Sunday, Aug 24, 2008
VIs attempt to defend and redefine BTL
observer: Has Britain's buy-to-let market been rent asunder?
During the property boom it was seen as a sure-fire way to make a profit, but landlords are now on a downward spiral and nobody is sure when the yields will return.
VIs talking-up e.g. Fionnuala Earley, still "chief economist" at Nationwide: 'A typical purchaser in 2006, even with the payments shock [of higher mortgage rates] will still have good enough rental cover because of the rise in rents. If there are strong rises in rents to come, why would they sell out?'
Posted by mken @ 09:08 AM (472 views) Add Comment
2 Comments
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1. Bubble&sqeak said...
The usual 1 dimensional thinking from Fionnuala Earley, how does she think that renters will pay for these "strong rent rises" in a failing economy? I really do not see the wage infaltion that would be needed in the pipeline.
How on earth has she kept her position in Nationwide? How could she hold her own in a serious debate around the board table? Or is she surrounded by equally blinkered buffoons? (rhetorical question, the answer is clear :-)
2. it_is_going_with_a_bang said...
A typical borrower in 2006? Not where I am.rents cover 2003 levels and no more. But I guess it's where you are.
Unless wage inflation increases landlords can kiss goodbye to any signicant rental yields.
Demand what you like but if people don't earn the money you won't get it.