Buy-to-let Market Has Come To Halt

[Once in a lifetime]

http://news.ft.com/cms/s/d7c335c4-ce4d-11d...000e2511c8.html

Buy-to-let market has come to halt, say surveyors

By Jim Pickard, Property Correspondent

Published: May 27 2005 03:00 |

The buy-to-let market has come to a halt, according to the latest survey of lettings by the Royal Institution for Chartered Surveyors. Net new instructions from landlords to let their property have not risen for the first time since 1998.

Sorry I don't have a subscription for full article....anyone?... please.

[Guest Riser]

So thats 526,000 BTL mortgages by the end of 2005, many of which are for traditional FTB properties. The government plans to spend £1Billion to help 100,000 FTB with their unworkable 50/50 Buy To Rent (BTR) scheme over 5 years.

Why don't they just take action to get these BTL out of the market?

Edited May 27, 2005 by Riser

[delite1]

I think the just have. Any BTLer today will know that these new incentives from the Gov. means less potential tenants. Some BTLers are silly enough to believe that if there is all this extra money floating about it will push their own portolio's value higher but this will not happen as this subsidised money is much more attractively set up to go on new build and it is not a co-incidence that 200,000 of these new builds were annouced on the same day.The Government has targeted BTL.

[lostinrent]

So what ?

The Govt is allowing building corporations to use NHS land to erect homes at build cost only to house a fraction of the many FTB into 50% homeowner schemes.

Priority will go to so called keyworkers.

We are talking about cut price new build property on hankerchief size plots - hardly the type of stuff that can be sold off at some stage to get up the chain and buy bigger better quality property in better areas.

BTL investors will simply adapt strategies and pick up property that does not cater to the FTB keyworker - thats immigrants, students, single mothers / fathers, the divorced, unemployed, regional and country areas and off shore.

It called adapting to the market.

Which is what I should have done instead of lost in renting.

[Guest Riser]

Last September I started trading a few AIM shares and was doing very well until Christmas. The problem wasn't sellecting the companies I bought and sold, it was the fact that the underlying market started tanking. I didn't try and fight the market, I sold all my shares and got out, my portfolio is still on ADVFN and it is reassuring to check it out and see how much I would have lost if I had held on.

With BTL we are not talking about a few grand, many of the new investors are leveraged to the hilt. The biggest decision in investment is timing when to enter and exit the market. Looking back any monkey could have made money in BTL since 1996, and many did, but in a few months time you may look back and decide your decision to rent was not so bad after all.

[Once in a lifetime]

http://www.bloomberg.com/apps/news?pid=100...X.Fr0M&refer=uk

U.K.'s Buy-to-Let Market Stagnates as Housing Boom Fades

May 27 (Bloomberg) -- The U.K. buy-to-let housing market stagnated in the quarter through April as a 10-year property boom faded, the Royal Institution of Chartered Surveyors said.

[lostinrent]

Last September I started trading a few AIM shares and was doing very well until Christmas. The problem wasn't sellecting the companies I bought and sold, it was the fact that the underlying market started tanking. I didn't try and fight the market, I sold all my shares and got out, my portfolio is still on ADVFN and it is reassuring to check it out and see how much I would have lost if I had held on.

With BTL we are not talking about a few grand, many of the new investors are leveraged to the hilt. The biggest decision in investment is timing when to enter and exit the market. Looking back any monkey could have made money in BTL since 1996, and many did, but in a few months time you may look back and decide your decision to rent was not so bad after all.

<{POST_SNAPBACK}>

Any logical well thought out action plan with an entry point, exit point and which has been well researched works.

Which is why I do not believe HPC is a forgone conclusion, STR are in for a shock if they just wait out for some daft 20, 30, 40 % HPC.

Yes, property purchases in daft areas such as Toxteth, Moss side, will simply fall and fall - should never have purchased there in the first place.

btw - well done for cutting your loss and surviving rather than going under.

[Boom'n'Bust]

heres another link:

http://www.thisismoney.co.uk/mortgages/buy...6&in_page_id=56

(The above link will be in the Daily Mail newspaper too)

[weezer]

There is now a staggering amount of 1 bed flats available around me in North London. Most of which have no chain and some even come with all the furniture (I especially liked one that comes with all Habitat furniture and a £1000 Smeg fridge ) The flats are not in the top-end areas though and I will wait to see what happens there before buying.

[Once in a lifetime]

heres another link:

http://www.thisismoney.co.uk/mortgages/buy...6&in_page_id=56

(The above link will be in the Daily Mail newspaper too)

<{POST_SNAPBACK}>

And all this time, searches on the web, claim a buoyant market for buy to let?

spin , spin ,spin , spin, Oops... reality!

[Guest Riser]

btw - well done for cutting your loss and surviving rather than going under.

Thanks, but don't worry, the interest on the proceeds of our house sale practically pays the rent. I still have a feeling the French rejection of the EU constitution could shake things up, the next couple could be very interesting

[Ah-so]

BTL investors will simply adapt strategies and pick up property that does not cater to the FTB keyworker - thats immigrants, students, single mothers / fathers, the divorced, unemployed, regional and country areas and off shore.

It called adapting to the market.

Which is what I should have done instead of lost in renting.

<{POST_SNAPBACK}>

Lost in renting? Lost in troll-land more like!

[Time to raise the rents.]

I particularly like the bit about rising rents.

[DoubleBubbleTrouble]

I particularly like the bit about rising rents. 

<{POST_SNAPBACK}>

I betcha do. Rising rents are an inevitable consequence of a house price crash. More people always want to rent during these times.

Although it will take some time for all the oversupply generated by the BTL fad to dissipate.

[Ah-so]

I particularly like the bit about rising rents. 

<{POST_SNAPBACK}>

So did I.

To quote the RICS chief economist:

"The modest rise in rents in neither her not there compared to where interest rates are," said Khatri. "It won't encourage investors having to come up with to come up with increasingly large deposits to cover mortgage payments." (Blomberg article on same story)

[Time to raise the rents.]

I betcha do. Rising rents are an inevitable consequence of a house price crash. More people always want to rent during these times.

Although it will take some time for all the oversupply generated by the BTL fad to dissipate.

<{POST_SNAPBACK}>

Well you're the first person I can remember to agree with me on this subject, I shall add you to my list of buddies!

Q. Are you the original Bubble Trouble poster, or just a similar name? Let me know by PM if you don't want to answer in public.

Edited May 27, 2005 by Time to raise the rents.

[Time to raise the rents.]

So did I.

To quote the RICS chief economist:

"The modest rise in rents in neither her not there compared to where interest rates are," said Khatri. "It won't encourage investors having to come up with to come up with increasingly large deposits to cover mortgage payments." (Blomberg article on same story)

<{POST_SNAPBACK}>

Well it's an unfortunate fact of life that tenancy contracts aren't tied to the BOE in any way. They take time to reach their expiry and some landlords aren't under pressure to raise their rents due to low mortgages etc.

But as I've said many times, put enough of them under pressure & they'll move. That is also a fact of life.

[Once in a lifetime]

Well it's an unfortunate fact of life that tenancy contracts aren't tied to the BOE in any way. They take time to reach their expiry and some landlords aren't under pressure to raise their rents due to low mortgages etc.

But as I've said many times, put enough of them under pressure & they'll move. That is also a fact of life. 

<{POST_SNAPBACK}>

Just £uck off and die somewhere :angry:

[Marina]

So let me get this right. Things, economy wise, look pretty bleak. Unemployment rising, consumer spending down (markedly in some areas), new mortgages 30% down, massive drop in MEW - quite a lot of general doom and gloom now in the media - the party's over - we've all borrowed too much etc etc.

And, against this generally tightening fiscal scenario, rents are going to rise???!!!

I often look in the local Estate Agents that do lettings. Over the last couple of months I am more convinced than I have been for a while that, when our rental contract comes up for renewal, I am going to be able to move to a better house for the same money.

I take very little notice of what VIs have to say about rent levels. They are full of bull. There is a concerted effort by all the VIs to keep their fingers in the dyke. But it keeps on springing more leaks. Soon the flood comes.

[Time to raise the rents.]

So let me get this right. Things, economy wise, look pretty bleak. Unemployment rising, consumer spending down (markedly in some areas), new mortgages 30% down, massive drop in MEW - quite a lot of general doom and gloom now in the media - the party's over - we've all borrowed too much etc etc.

And, against this generally tightening fiscal scenario, rents are going to rise???!!!

I often look in the local Estate Agents that do lettings. Over the last couple of months I am more convinced than I have been for a while that, when our rental contract comes up for renewal, I am going to be able to move to a better house for the same money.

I take very little notice of what VIs have to say about rent levels. They are full of bull. There is a concerted effort by all the VIs to keep their fingers in the dyke. But it keeps on springing more leaks. Soon the flood comes.

<{POST_SNAPBACK}>

Let me get this right, many people turn their attention from buying to renting and rents are going to fall?

I take very little notice of what tenants say, they always claim to be broke, then you see them down at the pub later on with their mates.

[London-loser]

Let me get this right, many people turn their attention from buying to renting and rents are going to fall?

I take very little notice of what tenants say, they always claim to be broke, then you see them down at the pub later on with their mates.

   

<{POST_SNAPBACK}>

TTRTR,

Is it no entirely possible that downward pressure will be put on rents the more it looks like we are heading for a recession?

God forbid we actually have a recession (we're still a long way off despite the apparent rapid consumer slowdown) but if we do is it not entirely likely that rents will come under pressure?

The way I see it this will partly be a result of higher unemployment, partly poor sentiment among the general public and partly through more competitive pressure on BTLs?

I'm not saying this will happen (even IF we have a recession, which is by no means certain) but a smart man like yourself must surely recognise the threat?

Aside from the need to change your name, this might negate some of the effects of falling interest rates as Roger Bottle's vision of 20% lower house prices and 3.5% interest rates comes closer to reality.

[London-loser]

Apparently Rics said:

A slowdown in the UK economy may weigh on tenant demand and rents in the year ahead, though we expect modest strength in the labour market to be maintained, which will support the rental market.

I'm not sure I understand what "modest strength" is... especially since all the news I seem to hear these days about the jobs market is not about "modest strength".

New instructions from landlords down from a balance of +23 to... er, 0.

Some agents suggested that tenant demand was holding up well. But others painted a picture of investors who had hoped for rapid capital growth but had been forced to let out their flats at a loss.

The slowing down of the property sales market has meant that a number of would-be sellers have become reluctant landlords.

... returns have not matched expected levels and leave landlords with shortfalls

Thank God we're not about to head into the traditionally quiet summer period against the backdrop of a rapidly slowing economy.

Good to hear my pal Jeremy Leaf (I tend to think of him as my local estate agent rather than an independent surveyor) say:

Poor prospects on return and capital growth are keeping new investors out of the buy-to-let market, although continuing healthy tenant demand means existing landlords are holding firm.

Changes to the rules for personal pension funds next April might buoy the market.

So presumably BTL is a duff investment for new investors but a "strong hold" for existing investors. I'm not sure I understand the logic of that.

The whole survey is here:

Rics Rental Survey

[London-loser]

Oh, Leaf also said:

Our market for rental properties - especially flats - remains fairly active, while supply is outstripping demand and balance of power is with tenants. As a result, rents are unlikely to increase substantially.

On a positive note, unless properties are well presented, landlords are not proving successful.

That's A POSITIVE NOTE... for tenants presumably?

[BringItOn]

If supply is outstripping demand where is the housing shortage??? Surely if people are desperate for places to live they would have snapped them up, especially with the low rents.

Housing shortage my a*se!!!!

Many BTL's bubbles are about to burst!!!!