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Blue Peter

What Happens To "the Professionals"

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In a discussion on another forum, someone is saying that they fear that if there is a house price crash, then, on the BTL front, it's the little guys (with one or two BTL properties) who will get hurt, "whilst the "professionals" with a BTL empire of hundreds of properties will emerge unscathed. Indeed, they'll even use any crash as an opportunity to hoover up even more properties and so grow their empires yet further.

Is this likely to be the case, or are both lots likely to get hurt in any crash?

Peter.

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If by

'big guys'

they mean people who have been property investing for 25 years and know the property market inside out, go to every auction and buy when the property is a good deal, have been consistantly buying through the dips and therefore bought most of their property at 20% of the price it is worth now (I know one).

and

'small guys'

started BTL about 3 years ago and now have 4 properties, they put a deposit on the first one and then MEWed to afford the deposits on the subsequent ones.

then

Yes it will be all the small ones that end up screwed!!!

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I know a BTL professional who had retired to Mallorca when the last crash happened. He relocated back to UK within 6 months and says that he made more money during the crash than at any other time. He's back in mallorca now, i wonder for how long.

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If by

'big guys'

they mean people who have been property investing for 25 years and know the property market inside out, go to every auction and buy when the property is a good deal, have been consistantly buying through the dips and therefore bought most of their property at 20% of the price it is worth now (I know one).

and

'small guys'

started BTL about 3 years ago and now have 4 properties, they put a deposit on the first one and then MEWed to afford the deposits on the subsequent ones.

then

Yes it will be all the small ones that end up screwed!!!

Yes, I guess that it's a case of when you bought. However, are there likely to be any people who've built up a big empire recently by mewing on their earlier purchases. I guess that even with a large number of properties you can get into cash flow problems if even a few of your properties go into negative equity, and you've used earlier and cheaper properties to fund them. If the rents of the dearer properties don't cover the mortgages, and you can't sell other properties to release capital, then the whole empire could be brought down by just a bit fo your portfolio not performing?

Peter.

Peter.

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Yes, I guess that it's a case of when you bought. However, are there likely to be any people who've built up a big empire recently by mewing on their earlier purchases. I guess that even with a large number of properties you can get into cash flow problems if even a few of your properties go into negative equity, and you've used earlier and cheaper properties to fund them. If the rents of the dearer properties don't cover the mortgages, and you can't sell other properties to release capital, then the whole empire could be brought down by just a bit fo your portfolio not performing?

Peter.

Peter.

I dont think that these kind of people should be called professionals.

To ba a professional they would be consistantly buying for a period of time not suddenly decide to buy loads on a success many years before. 'Professionals' who started 3 years ago probably would still have to have a day job as the yeilds are so small.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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