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Neverwhere

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  1. Neverwhere

    A Goodbye To All That Buy To Let

    I don't think that's true, because a lot of small-time BTL landlords are second-steppers, and so their use of BTL finance to hoard their earlier properties does two things: It withholds first time buyer properties from the market and thus artificially constricts supply and prevents price discovery. It allows them to significantly overpay for their second property as they can extract imagined equity - at a price that they haven't tested on the open market - from the first property to pump up the price that they pay for the second, effectively making a substantial chunk of their borrowing for this second property interest-only. So the use of BTL finance by 50 second-stepper landlords will have exerted an influence on prices via 100 properties; whereas the use of BTL finance by a 50 property portfolio landlord will have exerted an influence on prices via 51 properties, (again including their own home). The portfolio landlord certainly bears a greater share of the responsibility as a single individual, but the aggregate impact - and shared responsibility - of the second-stepper landlords on overall demand and affordability is large. It's easier for people to overlook aggregate impacts than it is for them to overlook discrete impacts, especially when they particularly want to do something for themselves and are therefore motivated to rationalise or ignore the consequences for other people, but aggregate impacts are often the most significant. Reducing the attractiveness of BTL finance to second-steppers could have a very significant long-term impact on prices, as it increases the supply of properties to market, (because people will once again have to sell their first properties before they can move to their second), at the same time as it reduces effective demand for properties that are already in the market, (because the same people will no longer be able to use interest-only finance on the first property to fund their deposit on the second).
  2. Might have missed this - there's a lot bearing down on BTL landlords! - but is the change to HMO licensing in there? The strongest impact seems like it could be difficulty/increased costs when attempting to refinance, which would be a bit staggered, but every little helps
  3. Neverwhere

    A Goodbye To All That Buy To Let

    It should definitely start ramping up from there. As to how long, I think the time frame will vary case by case. Of those who will already be underwater at that point there's the possibility some may have cash (or foregone maintenance/letting agent fees) available to cover the shortfall for a limited time; the choice of who to build up arrears with first (lenders/HMRC); the amount of time that it will take for those arrears to translate into lenders taking possession of properties/HMRC filing for bankruptcy (probably taking in a CCJ along the way); the length of time that the receiver takes to market the property/allow the tenants an opportunity to find somewhere else to live (they may see out the life of the tenancy before attempting to sell); and the route by which it's marketed (estate agent/auction) and length of time to sell. As the tax relief decreases further/prices slide that's likely to pull down more landlords who might have just been able to scrape by initially, (as might the need to meet a 5.5% stress rate at remortgage), so the first wave should result in successive further waves, whilst all the while demand is leeching out from the market as would-be BTL landlords find themselves unable to compete for properties at these prices. I have a hunch that the reduction in demand may have the larger impact on wider prices, whereas the forced sale of existing rental properties may present the best individual buying opportunities.
  4. Neverwhere

    A Goodbye To All That Buy To Let

    That is a very interesting anecdote, thank you for sharing. I think it does make sense to expect portfolio BTL landlords who have no way to make the numbers work post-Section 24, in terms of either income tax or CGT, to attempt to prolong their current lifestyle for the maximum amount of time possible; especially as the longer they hold on for the more they can convince themselves that there's a chance it will all be magically reversed before they actually do go bankrupt; whereas people who were never so mad as to build up double or triple digit loan-to-income multiples remain in a position where they can exit with minimal pain prior to the worst hit cases being forced into a fire sale. I'd guess that those who've bought more will be finding the final step in their MEW-cash-remortgage approach harder than expected.
  5. Neverwhere

    A Goodbye To All That Buy To Let

    That would account for the growth around the Dales / Snowdonia Si1 and I were discussing above. Something else which occurs to me is that the landlords who are selling up now are not necessarily those who are most severely affected by Section 24. The worst affected landlords will be those who have employed successive rounds of mortgage equity withdrawal to expand their property portfolios, and so as well as having the greatest difficulty in paying their income tax bills under Section 24, they're also likely to have the greatest difficulty in paying their capital gains when trying to sell up to escape Section 24. Landlords who are so trapped may well hang on until forced into bankruptcy, rather than opting to take bankruptcy early by bringing their CGT problems into play, and so the 4,000+ rental properties being sold off each month - and hopefully more now - might be more centred on those who are merely inconvenienced by Section 24? Meaning things are only starting to get fun
  6. Neverwhere

    A Goodbye To All That Buy To Let

    Hopefully they have been accelerating since then.
  7. Neverwhere

    A Goodbye To All That Buy To Let

    Thank you!
  8. It was very helpful. I always look out for your comments on banking, they're much appreciated.
  9. Thank you for taking the time to run us through all of that Ah-so. Interesting reading.
  10. Neverwhere

    A Goodbye To All That Buy To Let

    I'd like to get eyes on the report that they're talking about to make sure they haven't misinterpreted something, because it would certainly be a welcome development if true.
  11. You're welcome Happy to confirm that that is indeed wishful thinking:
  12. Neverwhere

    A Goodbye To All That Buy To Let

    Does anyone know where they might be picking up this number from, as the live tables on dwelling stock don't seem to have been updated for 2018 yet?
  13. I think that maybe you meant to link to this thread? https://www.propertytribes.com/deleveraging-could-be-a-mistake-t-127636146-post-351628.html The quoted post is still visible there for me.
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