Tuesday, Nov 18, 2008
But I thought Assetzz said it's a good time to be a landlord?
Times Online: House rents fall as unsold properties flood market
"Rents fell for the first time in five years between July and October as home-movers flooded the rental market with properties that they could not sell."
a good read... unless you are BTL
Posted by growler @ 03:25 PM (824 views) Add Comment
10 Comments
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1. maddison said...
"This came as a report said that more than one in three landlords would be plunged into negative equity by the middle of next year as house prices continue to fall. "
So maybe 2 out of three are in positive equity with rent paying the mortgage. Result!
2. sold out said...
From the comments section in the article
"None of this bothers me. I have sold all 8 of my buy to lets in the last 2 years and made a big profit. Now I'm 4 months here and 8 months in Florida living off the profits.
Max, Reading, uk"
Lucky Max.
Highlights exactly why the BTL monster needs to be tamed and brought to its knees.
Max makes a killing in property and what is the benefit to the UK economy? Zilch.
He spends all of his undeserved profits in Florida.
3. maddison said...
The trouble is when you try and control this market by making it harder to be a landlord fewer properties come on the market and rents rise. This happened in the 80's. The only ones left in the game are absolute Sh**ts. What ever happend to nick van hoogstraten
4. mark wadsworth said...
@ Soldout, you can't fault Max of Reading for his excellent timing. But this is the whole point about house price bubbles - they are just opportunities for random transfers of wealth from the gullible to the cunning, but without adding any value to the economy as a whole, without even any significant amount of new housing being built. As ever, Land Value Tax would sort this out.
5. rumble said...
Banks neglecting risk assessment and throwing credit around, because the BoE enables it - should probably try to tame the credit bubbles before the BTL bubbles.
6. Luckjim said...
Wadsworth.
The problem with LVT is it taxes everyone who happens to benefit from rising house prices - be it a BTL investor or a young teacher who just happens to have bought in an up and coming area.
How about a scheme that entitled long-term tenants to share in any appreciation in the value of a property. Difficult to implement I know, and I take maddison's point about pushing decent landlords out of the market. But it would encourage landlords to focus on rental returns rather than taking a punt on capital appreciation. Might make BTL a reasonable option for an income on capital rather than a get-rich-quick scheme.
7. sold out said...
Mark wadsworth@04.34
Yes your right can't fault Max's timing and good luck to him.He got out at the right time and sold on to some proper muppetz.Individuals are not responsible for the BTL sham its government' policy for the last 30 years that has caused this disaster.
maddison@0406
You certainly do need to control this market.Its quite clear that a combination of goverments failure to provide social housing (especially thatchers right to buy) and leaving BTL unregulated has caused this problem.Funny how Germany and France seem to cope with a good rental market (bigger than ours) that isn't dominated by amateur BTL and get rich quick clowns.And they don't have silly house price bubbles like we have here in the UK.
Land value Tax as MW suggests or something similar needs to be brought in and tenants need to be offered longer term rental periods 3 to 5 years.
you say that demand for rentals would rise if fewer landlords where in existance and rents would rise.I disagree.Once this crash has hopefully resulted in a fall of 50% and most of these BTL's lose their investments these houses will be available for FTB's at an affordable price so rental demand should fall away.
8. denzil said...
Chatting to a good friend who is an EA. He commented that he is seeing disgruntled BTL landlords sell up, in many cases due to not have the spare cash to subsidise their tenants. My parents-in-law own a large number of rental properties and have no intention selling but what they are seeing is that virtually all of their new tenants over the last 6 months were due to the renters landlord selling their BTL. However, rents are stagnant but throw inflation into the mix and in real terms are clearly falling.
There's an interesting junction ahead and that is, will the likes of my parents-in-law see rents rise because of smaller numbers of rental properties available or will prices fall to the extent that renters (FTB et al.) decide to buy and hence create less demand in the rental sector. I think there needs to be a bit more carnage in the amateur BTL market first before landlords start to see rising yields.
The one thing I'm reasonably confident of and that is if I was a BTL and I'd bought in the last two if I hadn't already sold I would be selling.
9. confused76 said...
btl is a lost cause
1 in 3 landlords will be in negtive equity next year
2 in 3 landlords will be in negative equiy by 2011
1 in 2 landlords will be bankrupt
maddison says while paying the mortgage with the rent
but mortgages are interest only, and rents fail to cover the basic maintenance
so this is a negative amortization situation, BTLs dig themselves into a big black hole
with no hope of monetising their paper capital
when all of them want to redeem, who do they sell to? Martians?
10. confused76 said...
ah rent control!!
I hope not, this far west market of btl deregulation will die because of deregulation
example: all those who cannot sell, rent out, need no permit licence or else
the young professional who bought a 3 bedroom and is overmortgaged, will rent the spare room
btl will do cut-trough competition for the scarce solvent tenants around
supply = unlimited, every home owner is soul searching as a forced landlord
demand = very very limited here in london, courtesy of Lehman, Morgan and Citi, American expats are packing, the Eurotrash are selling cars mopeds and dogs and swimming back home
BYE BYE BYE TO LET