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Buy-to-let: Warning For 'accidental' Landlords


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Accidental landlords have always been a feature of the private rentals market, but their numbers have risen sharply over the past year.

"The stagnant housing market is making it virtually impossible for many people to sell – at least at prices they are happy with," says Melanie Bien, a director of Savills Private Finance, the mortgage broker.

According to Mr Hyatt, accidental landlords contributed around 25pc of the increase in Knight Frank's stock levels in 2008. Research published by the National Landlords Association (NLA) late last year showed that the number of new landlord instructions to let in the third quarter of 2008 rose at the fastest rate since records began. Booming supply has not been matched by an increase in demand for rental property, however, as the number of applicants is rising, but at a much slower pace.

This trend is set to continue in 2009. "It is likely that if property prices keep falling we will see more people choosing to hold on to their asset and let their property rather than sell it," says Richard Price, director of operations at the NLA.

Thanks in part to the influx of new landlords, the lettings market is now highly competitive. "Stock levels in many offices are up 100pc over the past 12 months, while in some offices levels are three times as high as they were at this time last year," Mr Hyatt says. Jane Ingram, head of lettings at Savills, says that its letting agencies are seeing similar increases in stock levels.

"They are significantly higher than a year ago, with the number of properties doubling, if not trebling – partly due to the rise in accidental landlords coming new to the market," she says.

The result has been a downward pressure on rents, which is particularly acute at the higher end of the rentals market.

http://www.telegraph.co.uk/finance/persona...-landlords.html

These are rentals coming on the market that weren't supposed to be BTLs, but are now going into competition with them. Not sure who suffers most out of those two groups, but it's good news for renters and great news for houseprices in a flat spin.

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http://www.telegraph.co.uk/finance/persona...-landlords.html

These are rentals coming on the market that weren't supposed to be BTLs, but are now going into competition with them. Not sure who suffers most out of those two groups, but it's good news for renters and great news for houseprices in a flat spin.

How is it good for prices?

It restricts supply of properties for sale and due to low interest rates is sustainable at least in the short to medium term. If ******s BTL right up the **** but they can't sell either without getting bummed.

The Government have come up witha solution to hpc by accident. Can't sell won't sell

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How is it good for prices?

It restricts supply of properties for sale and due to low interest rates is sustainable at least in the short to medium term. If ******s BTL right up the **** but they can't sell either without getting bummed.

The Government have come up witha solution to hpc by accident. Can't sell won't sell

Restricts supply only temporarily until amateur landlords have lost even more money while trying to rent out, then suffer forced sales. Sorry.

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How is it good for prices?

It restricts supply of properties for sale and due to low interest rates is sustainable at least in the short to medium term. If ******s BTL right up the **** but they can't sell either without getting bummed.

The Government have come up witha solution to hpc by accident. Can't sell won't sell

sooner or later they will sell, interst rates will not stay low forever in uk plc,,with QE they will go up soon after the next election...no choice.

their will be many forced sellers in the next year or two !!!

they will sell you will see, they may not have any choice in the matter needs must, to save the roof over their heads. :lol:

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Restricts supply only temporarily until amateur landlords have lost even more money while trying to rent out, then suffer forced sales. Sorry.

Sorry but if they can rent them they are probably better off than BTLs. Those with residential mortgages are likely to be less leveraged than BTLS and will be able to undercut their BTL counterparts.

The BTL's may go bust but they'll be selling one bed shiit boxes that no one wants anyway.

This accidental landlord shit is just further stickiness on the way down and it is pissing me off.....

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Sorry but if they can rent them they are probably better off than BTLs. Those with residential mortgages are likely to be less leveraged than BTLS and will be able to undercut their BTL counterparts.

The BTL's may go bust but they'll be selling one bed shiit boxes that no one wants anyway.

This accidental landlord shit is just further stickiness on the way down and it is pissing me off.....

not all BTL's will go bust many have been in it for years...they will still be around for a few years more.

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Thanks for cheering me up :angry: :angry:

Perhaps they are like cockroaches after a nuclear attack. BTL's will still be prowling estate agents long after the property market has died

the good BTL's have been around for years along with a few really bad baskets..the market will go down even more after the next election as interst rates will need to go up because £ will need help because of QE in the uk...

most of the new BTL's since 2000 will sell up and get out in say one or two more years the interst rates will kill them off as the interst rates start going up after the next election...so don't be so sad cheer up :lol::lol::lol:

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Sorry but if they can rent them they are probably better off than BTLs. Those with residential mortgages are likely to be less leveraged than BTLS and will be able to undercut their BTL counterparts.

Erm, you aren't allowed to rent out on an OO mortgage in most cases.

Most lenders will force their customers onto BTL products when told.

If they're not told, it's fraudulant.

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This trend is set to continue in 2009. "It is likely that if property prices keep falling we will see more people choosing to hold on to their asset and let their property rather than sell it," says Richard Price, director of operations at the NLA.

Isn't holding onto a depreciating asset rather like holding onto a toxic loan? ;)

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I'm sorry I don't understand this

If people who can't sell are "renting" where are they living?

Presumably, they've moved into an otherwise empty house, so the supply of empty (protential) rental properties hasn't changed.

tim

They're living with parents, with relatives, in HMOs, sharing with friends, emigrating or sofa surfing.

A few lucky ones will be moving to rented or buying something else. If they're renting it will be most probably in a smaller house as people don't tend to 'over-consume' rental.

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Erm, you aren't allowed to rent out on an OO mortgage in most cases.

Most lenders will force their customers onto BTL products when told.

If they're not told, it's fraudulant.

Years ago, before BTL mortgages were created and you had to move away and couldn't sell, etc, the lender would stick 1% on top of your residential mortgage rate. If you go boo hoo to them with this scenario, they may still do it.

To transfer you onto a BTL mortgage brings extra admin costs, valuation fees, etc, etc. They may also not wish to have more of their 'assets' classed as being in the BTL folder. The biggest issue would be the LTV of the loan.

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I'm sorry I don't understand this

If people who can't sell are "renting" where are they living?

Presumably, they've moved into an otherwise empty house, so the supply of empty (protential) rental properties hasn't changed.

tim

Thus the myth of supply shortage is exposed. How on earth could there ever have been a shortage of housing in the last

few years with every corner plot back garden built on and villages doubling in size.

No one is holding empty property to flip anymore, second homes are being liquidated and the Poles are going home. Empty homes all over the place.

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Thus the myth of supply shortage is exposed. How on earth could there ever have been a shortage of housing in the last

few years with every corner plot back garden built on and villages doubling in size.

No one is holding empty property to flip anymore, second homes are being liquidated and the Poles are going home. Empty homes all over the place.

Every empty home needs a full time job to fill it. ;)

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"The only landlords who are going to make lets work over the next couple of years are those with a decent slab of equity in their property – around 40pc," says Liam Bailey, Knight Frank's head of residential research.

That statement is so asininely stupid that it boggles the mind. Ever heard of cost of capital? If you're seeing a zero or negative return on that 40pc equity, then your investment isn't working -- you're losing money. How do such idiots make it into the papers?

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I'm sorry I don't understand this

If people who can't sell are "renting" where are they living?

Presumably, they've moved into an otherwise empty house, so the supply of empty (protential) rental properties hasn't changed.

tim

The person who was living in the house I rent moved to a care home, and, sadly, is probably going to be dead soon. Didn't really make a whole lot of sense that he was living in a seven bedroom property by himself, though. In my neighborhood, the average house has 4 or 5 bedrooms and 1 or 2 people living there. The average age of the owners is probably about 70. The houses are all owned by pensioners who are sitting on a mint in equity, but they can barely afford to turn the heat on. If ZIRP/Quantitative easing does actually work and unleashes rampant inflation, it will be interesting to see what happens to these houses. If the residents can't afford the running costs, they'll be forced to sell. Could keep prices down even with general inflation.

Edited by RichC
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The person who was living in the house I rent moved to a care home, and, sadly, is probably going to be dead soon. Didn't really make a whole lot of sense that he was living in a seven bedroom property by himself, though. In my neighborhood, the average house has 4 or 5 bedrooms and 1 or 2 people living there. The average age of the owners is probably about 70. The houses are all owned by pensioners who are sitting on a mint in equity, but they can barely afford to turn the heat on. If ZIRP/Quantitative easing does actually work and unleashes rampant inflation, it will be interesting to see what happens to these houses. If the residents can't afford the running costs, they'll be forced to sell. Could keep prices down even with general inflation.

http://uk.youtube.com/watch?v=n5YF9zyTQwE

mentioned before but so apt. ;)

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How is it good for prices?

It restricts supply of properties for sale and due to low interest rates is sustainable at least in the short to medium term. If ******s BTL right up the **** but they can't sell either without getting bummed.

The Government have come up witha solution to hpc by accident. Can't sell won't sell

zero sum game. foolish point

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The type of mortgage is neither here nor there. I rented a flat for five years on a standard mortgage. It's only a problem if the building society finds out which is only going to happen if someone tells them.

You mean like a disenchanted tenant?

If you rent out without telling the lender then you are committing fraud. Additionally, chances are you aren't declaring the rent as income to the taxman either - tax evasion.

Better make sure you fix things that go wrong ASAP and don't dick the tenants around.

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