Sunday, Mar 22, 2009
The Times Goes Bear on BTL
The Times: Unhappy returns
An unusually candid summing up of a landlords lot.
Rent is not so much "dead money" now.
Posted by wdbeast @ 11:36 AM (1276 views) Add Comment
7 Comments
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1. techieman said...
Here's an idea for Landlords- lower the rent DURING the tenancy. After all (if) the cost of their mortgages have fallen, then dont they have excess profits over that before? If not during the tenancy (because perhaps - and i dont know this creates a legal issue) then approach the tennant during it and convince the tennant to stay by offering them say a one - off "cash back" at the end of the term together with falls thereafter.
2. japanese uncle said...
This is an excerpt of what I posted in 2007.
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HPC will be in the scale of 50-80% averaging around 55-60% after all. Sure thing. FYI those who grabbed houses in Japan circa 1993 after the house price fell by 7-8% yearly for three consecutive years, ended up in tears, as they had to watch the value of their houses sliding down further and further for another 10 years. As tens of thousands 'urban luxury flats' should flood in the market, whether buy or rent, FTBs in waiting should be spoilt for choice at cheaper rent (or price for purchase) for the foreseeable future. Wait and see is the only good strategy for the time being.
3. mark said...
prices still have a lot more to drop yet, at least 25%......after all the sceond round is about to start, USA is in dire straits, we are right behind them......
4. mark said...
oh yeh i forgot to say a firend of mine who is an estate agent has told me loads of people are handing keys back to banks because they can no longer afford the mortgages, this is in Cheshire area, she says expect a flood of distressed sales now....
thats the real truth behind the white teeth , fake tans, fake rolexesand minis lined up outside estate agents
5. growler said...
In my area, this week has seen a dearth of properties come on to buy and rent. Rents that have been on for ages now look really poor value. This is Gerrards Cross: land of Minis driven by sweet aftershave agents
6. drewster said...
What Mark says @ 3.
In the US, job losses have already broken records. Here in the UK unemployment is just starting to hit, which will decimate demand for rented property. Even if there were zero redundancies, there are still some 650,000 school-leavers every year who will be staying at home with mum and dad* rather than moving into rented accommodation or buying a place of their own.
(*Ok so there aren't a lot of dads around these days. However if mum is home alone unemployed or earning less than before, she'll want adult sons & daughters to stay at home to help with the bills. I know several people in this situation.)
7. uncle tom said...
There will be quite a few people who ended up with two mortgages when they couldn't sell their first house, who will end up with double negative equity, which will leave them no choice but to either put good money after bad, or go bankrupt.
A year ago I talked some friends out of going down that route; they still havn't sold their house, but they're very glad they didn't buy another..
~~~
Yes the market has much further to fall, and will overshoot before rebounding; and yes, some people will call the bottom too soon.
I don't think one should draw too much comparison with Japan, as the problems there were, and still are, very different to those here.
In real terms, I still expect prices to eventually settle at around 55% of peak, but the bottom of the market is likely to be a lot lower.
Best FTB target? I would guess that some of the flats at the heart of the BTL massacre will be extremely cheap at the very bottom of the market - those that are reasonably well located, reasonably attractive, and have effective concierge arrangements could provide a very good first step - but not just yet..