cashinmattress Posted June 12, 2009 Share Posted June 12, 2009 Buy-to-let repossessions set to surge Some of Britain's biggest property vendors are preparing for a surge in instructions to sell repossessed houses and flats from failed residential investors this autumn as banks get tough on troubled borrowers.Several of the UK's largest mortgage lenders are repossessing more owner-occupied homes since their taxpayer bailouts but higher-risk buy-to-lets are also in their sights. Property auctioneers regularly appointed by bank receivers to find best market value for distressed property said sales enquiries were rising and a recent spurt of foreclosed residential buy-to-let disposals gave a taste of things to come. "We're talking to banks and building societies on a daily basis and I can tell you we are expecting a higher volume (of repossessions) towards the end of the year," said Gary Murphy, auctioneer at Britain's biggest property auction house Allsop. Buy-to-let residential property investment became a national phenomenon in the UK in the late 1990s. Figures from the Council of Mortgage Lenders show the number of UK homes repossessed rose to 12,800 in the first quarter, while Bank of England estimates show more than one in 10 UK households were in negative equity. About 200 of the 430 lots in Allsop's June sale were classed as "distressed stock", with a large proportion coming to auction as a result of failed buy-to-let investments. "I suspect there is now a general willingness to get on with realising the debt in situations where it has become inevitable there will not be recovery," Murphy said, explaining the rise. PHENOMENON The buy-to-let boom took off when affluent Britons exploited an abundance of cheap mortgages to buy second homes to generate further income and bolster personal retirement plans. A period of skyrocketing house prices and a lack of confidence in stock markets following the Dot.Com bust attracted more speculative landlords to the sector, fostering market conditions that helped to create Britain's housing bubble. Buy-to-let mortgages were relatively easy to repay while rents were rising and lending was freely available, but banks have been cutting back on these higher risk home loans since the credit crunch, leading to an acute thirst for refinancing. Nick Hopkinson, a director of residential property recovery specialist Property Portfolio Rescue said lenders were increasingly withdrawing mortgage offers at the eleventh hour, leaving some landlords with little option but to hand back keys. "Most banks are still in real financial trouble behind the scenes and are battling to build their reserves and reduce their bad debts as the recession worsens," said Hopkinson. "The UK is effectively seeing mortgage rationing by banks as they cherry pick only the buyers with perfect credit ratings and huge deposits," he said. BUYERS EYE SELL-OFF Not every struggling buy-to-let investor is selling up against their will. The residential lettings market has reached saturation point in some areas, compressing rents and making residential landlording a much less lucrative business. Research from advice website Unbiased.co.uk shows 28 percent of Britons believe buy-to-let property investments will make a loss in the current climate, while a further quarter think those invested in the buy-to-let market are only likely to break even. Murphy said some unwitting buyers drawn to residential property investment in recent years were dazzled by the attractive yields on offer but failed to do their sums. "So many basic errors of investing in the residential market were concealed by rising property values. People forgot ... about their outgoings, forgot about how they would cover the mortgage payments if they didn't have a tenant," he said. Enticing yields are up for grabs again today but Murphy said many who bought close to the market peak were sidelined now. At Allsop's last sale, the average gross yield for properties let on regulated tenancies was 3.46 percent, compared with 9.02 percent for homes let on Assured Shorthold Tenancies. "There has been a real shift from the amateur to the professional investor. The people who didn't get a look in the last time, who decided prices were too steamy, those are the people who are at the fore. They are now buying a much better return than cash on deposit," he said. Quote Link to comment Share on other sites More sharing options...
50%deposit Posted June 12, 2009 Share Posted June 12, 2009 hoooooooooorah!!!!!! Woop Woop!!!! oooh, can you hear that? <distant phwarrrp phwarrrp sound of emergency horn> I think the SS BTL is sinking, and sinking fast!!!! Quick, man the guns, lets finish off the survivors!!!!!!!! (i know, thats not very nice, but what the hell) Quote Link to comment Share on other sites More sharing options...
Laura Posted June 12, 2009 Share Posted June 12, 2009 I can remember when the Hoola-Hoop was all the rage. The fashion has not returned. I'm suprised it hasn't as the start-up costs & overheads were very low, plus the only real risk was hip dislocation; rather than financial annililation Quote Link to comment Share on other sites More sharing options...
Oh Give Me A Home Posted June 12, 2009 Share Posted June 12, 2009 I'd imagine that right about now, London2Manchester and Sibley are just loading the bullets into their revolvers and pouring themselves one last glass of scotch... Quote Link to comment Share on other sites More sharing options...
cashinmattress Posted June 12, 2009 Author Share Posted June 12, 2009 I'd imagine that right about now, London2Manchester and Sibley are just loading the bullets into their revolvers and pouring themselves one last glass of scotch... I think that there was a 'basic error' when sperm Sibley met egg Sibley. That goes for the lot of our HPI ramping numpties. Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted June 12, 2009 Share Posted June 12, 2009 1. I presume this is because they *think* the market has stabilised. 2. Most of these will be inner city slave boxes. No dice, HBOS. Quote Link to comment Share on other sites More sharing options...
US Citizen Posted June 12, 2009 Share Posted June 12, 2009 Does this mean that we are going to see 7 years of the cheapest properties stolen from First Time Buyers are going to be going for a song. CALLING ALL FIRST TIME BUYERS. If you missed out on a property in the past 7 years, dont worry, you can get one now at 50% discount. This will cause another bubble, you heard it here first. Quote Link to comment Share on other sites More sharing options...
Moo Posted June 12, 2009 Share Posted June 12, 2009 Buy-to-let residential property investment became a national phenomenon in the UK in the late 1990s. Bolleaux. BTL in the late 90s was the preserve of a relatively small number of punters who, in retrospect, knew what they were doing. BTL didn't become a really big event until 2002 and after. Quote Link to comment Share on other sites More sharing options...
buytoilet Posted June 12, 2009 Share Posted June 12, 2009 I'd imagine that right about now, London2Manchester and Sibley are just loading the bullets into their revolvers and pouring themselves one last glass of scotch... Quote Link to comment Share on other sites More sharing options...
getdoon_weebobby Posted June 12, 2009 Share Posted June 12, 2009 whoo hoo cannae wait Quote Link to comment Share on other sites More sharing options...
Timm Posted June 12, 2009 Share Posted June 12, 2009 (edited) It's a perfect storm.rents falling interest rates rising unemployment rising instructions rising repossessions rising taxes rising food prices rising fuel prices rising mortgage rationing continues All the bulls have got is QE, which would be the trump card except it all seems to be going to numbered banks in Switzerland / hoarded by banks to meet new capital adequacy requirements. edit: insert forward slash as strikethrough does not work on this board Edited June 12, 2009 by Timm Quote Link to comment Share on other sites More sharing options...
grey shark Posted June 12, 2009 Share Posted June 12, 2009 Buy To LOSE is the new BTL ........ Quote Link to comment Share on other sites More sharing options...
swiss88888 Posted June 12, 2009 Share Posted June 12, 2009 (edited) the HPC will only really get going when there are a lot of repo's - these really drive the price down as they did in the 1990's - check out the stats, there was a peak of 70k repo's plus followed by a few years of 50k. Once the artificial support of HPI is removed repo's will really motor, I think 100k a year will happen. there is also the impact of rio's (rent out instead), a lot of people who want to sell but are waiting for house price increases. When the penny drops this ain't gonna happen a lot of property will come on the market. Prices will tank. repo's and rio's. Edited June 12, 2009 by swiss88888 Quote Link to comment Share on other sites More sharing options...
tomwatkins Posted June 12, 2009 Share Posted June 12, 2009 I AM GOING TO POST THIS IS CAPITALS BECAUSE I ADMIT TO BEING DUMFOUNDED. HOW CAN PRICES BE 'RISING' ACCORDING TO ALLSOPS WHILST AT THE SAME TIME THEY ARE SAYING THAT BTL PROPERTIES WILL 'SURGE' ON TO THE MARKETS? Add to that "mortgage rationing' (again according to them) FTB dropping out or giving up completely, interest rates rising in the US (and therefore the UK) and what is missing from this picture? Which group of collective idiots are buying? Is it a new/old group (BTF)-"buy to flip". Is it secretive government department buying at auction to keep demand high? Who is it? Please someone-I must be as thick as a post because I am missing something here. Anybody (even Hamish) give me a rational explanation. Quote Link to comment Share on other sites More sharing options...
buytoilet Posted June 12, 2009 Share Posted June 12, 2009 Buy To LOSE is the new BTL ........ Or Buytoilet 2006 Quote Link to comment Share on other sites More sharing options...
tomwatkins Posted June 12, 2009 Share Posted June 12, 2009 Does this mean that we are going to see 7 years of the cheapest properties stolen from First Time Buyers are going to be going for a song.CALLING ALL FIRST TIME BUYERS. If you missed out on a property in the past 7 years, dont worry, you can get one now at 50% discount. This will cause another bubble, you heard it here first. The first signs that there is another "bubble" in UK property prices and I will tell you this. The auction room for UK gilts will be as empty as your head mate. Quote Link to comment Share on other sites More sharing options...
Moo Posted June 12, 2009 Share Posted June 12, 2009 Is it secretive government department buying at auction to keep demand high? Who is it? Think 50-somethings who remember the 1970s looking for a return on their cash savings, and you'll probably cover a fair number of them. Shame for them we've just had the 1970s and the next phase is more likely to resemble the early 80s. Hey-ho. Quote Link to comment Share on other sites More sharing options...
Laura Posted June 12, 2009 Share Posted June 12, 2009 I AM GOING TO POST THIS IS CAPITALS BECAUSE I ADMIT TO BEING DUMFOUNDED. HOW CAN PRICES BE 'RISING' ACCORDING TO ALLSOPS WHILST AT THE SAME TIME THEY ARE SAYING THAT BTL PROPERTIES WILL 'SURGE' ON TO THE MARKETS? It's the the tried & tested tranching system. Different categories give different results. Never mix them together. Complex figures. Confusion marketing. Result? - Buyers & sellers confused & need 'expert' help. You know the rest .......... Quote Link to comment Share on other sites More sharing options...
markinspain Posted June 12, 2009 Share Posted June 12, 2009 I AM GOING TO POST THIS IS CAPITALS BECAUSE I ADMIT TO BEING DUMFOUNDED. HOW CAN PRICES BE 'RISING' ACCORDING TO ALLSOPS WHILST AT THE SAME TIME THEY ARE SAYING THAT BTL PROPERTIES WILL 'SURGE' ON TO THE MARKETS? It's called Quantitative Easing. Quote Link to comment Share on other sites More sharing options...
eric pebble Posted June 13, 2009 Share Posted June 13, 2009 Never seen so many TO LET signs up. Me too!! They are EVERYWHERE!!!!! And I mean == EVERYWHERE!!!! Some places are like ghost towns!! Was going through Chertsey and area recently.... The number of offices/businesses lying empty is incredible!! And they've been like that for well over a year now!! Quote Link to comment Share on other sites More sharing options...
eric pebble Posted June 14, 2009 Share Posted June 14, 2009 It's called Quantitative Easing. Sounds like crapping. Quote Link to comment Share on other sites More sharing options...
podpodman Posted June 14, 2009 Share Posted June 14, 2009 Never seen so many TO LET signs up. I have been travelling a lot of late, from the south west to the east midlands, and over to the west of London too. Wherever I have been I have been really struck by the number of To Let and For Sale signs: It is almost saturation out there! Many people would have seen this coming; in my opinion it has built up steadily over a number of years, especially from 2005/6 onwards. In other words, it actually became very noticeable even before the peak and slide from Summer 2007 onwards. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted June 14, 2009 Share Posted June 14, 2009 (edited) Me too!! They are EVERYWHERE!!!!! And I mean == EVERYWHERE!!!!Some places are like ghost towns!! Was going through Chertsey and area recently.... The number of offices/businesses lying empty is incredible!! And they've been like that for well over a year now!! indeed, when we last moved, people had NO IDEA we were tenants, TO LET was NOT a sign you would see outside a house. now they are everywhere. I suspect that now the sweet spot for sales is just passed, the sheep will now be offering their reluctant rentals for sale again. Edited June 14, 2009 by Bloo Loo Quote Link to comment Share on other sites More sharing options...
ParticleMan Posted June 14, 2009 Share Posted June 14, 2009 (edited) I suspect that now the sweet spot for sales is just passed, the sheep will now be offering their reluctant rentals for sale again. Local rents are now at least a quarter cheaper than they were a year ago. Supply is going to triple in the next 18mo. Those who bought in 2006- (and there's plenty of 'em, viz LR record) are getting crushed. Edited June 14, 2009 by ParticleMan Quote Link to comment Share on other sites More sharing options...
eric pebble Posted June 14, 2009 Share Posted June 14, 2009 Local rents are now at least a quarter cheaper than they were a year ago.Supply is going to triple in the next 18mo. Those who bought in 2006- (and there's plenty of 'em, viz LR record) are getting crushed. CRUSHED is the right word... Quote Link to comment Share on other sites More sharing options...
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