Easy Money With B T L As Rents Soar And Soar

[Realistbear]

http://www.telegraph.co.uk/finance/personalfinance/investing/8179545/Is-buy-to-let-the-key-to-easy-riches-once-again.html

Despite this week's gloomy governmental house price predictions, there is one group of property investors that is doing very nicely, thank you.

Britain's army of buy-to-let landlords, if they have chosen their properties wisely, are now benefiting from record rents, high demand, shrinking void periods, and often very low interest rates on their mortgages.

The market is beginning to open up for new entrants too, with specialist lending companies such as

Paragon

wanting to take on new business, and larger groups, such as Santander's buy-to-let arm, showing an interest in lending to more small landlords next year.

In my area there are hardly any properties available to let and they tend to get around £1000 for a somewhat nasty 2 or 3 bed bungalow. Seeing a few bungalows getting snapped up and then put back on the market to let.

We may be entering a new era for the property market where the landlord class once again calls the shots and any drops in prices are met with a rapid response team of entrepreurs armed with a record low interest rate mortgage from Paragon. This wil be the best outcome for the government and VIs as it will stabilise the property market and keep supply down as rents rise and bring in even more buyers.

Edited December 4, 2010 by Realistbear

[cashinmattress]

Hmm.

Well, it appears that the pundits are ramping again.

With the record levels of employment and industrial productivity flooding the bankrolls of the nations populace, property can only be a one way bet..

[IP Newcomer]

We may be entering a new era for the property market where the landlord class once again calls the shots and any drops in prices are met with a rapid response team of entrepreurs armed with a record low interest rate mortgage from Paragon. This wil be the best outcome for the government and VIs as it will stabilise the property market and keep supply down as rents rise and bring in even more buyers.

The BTL brigade are very likely to be scared with some mild panic. They just need to start selling rather than buying.

That said, the government definitely wants the market to go down slowly rather than in one big fall. The problem is that the last government wanted ever rising prices relative to income and although they could get it for a long time it wasn't guaranteed to go on for ever.

[Realistbear]

Hmm.

Well, it appears that the pundits are ramping again.

With the record levels of employment and industrial productivity flooding the bankrolls of the nations populace, property can only be a one way bet..

Our employment levels are probably the best in the Western world as we have escaped the fallout of the big crash that has afflicted the US, Spain, Ireland etc. Our bonds are among the strongest in the world and our productivity surpassed, IIRC, Germany's last month. This is all good news for property speculators or those who are already in the market.

It is unbelievable that people can still pay £1000 pm for a small property around here.

I cannot see things changing much as the goverment stands ready to flood the market with whatever levels of cash are necessary to keep things going. As the US begins to recover it will aid our exports and our bond prices will maintain low IR going forward.

I am planning a trip to look into buying a BTL myself for future retirement as I am now priced out of owning a property in the UK. Without a collapse of at least 30% I cannot see buying anything here and I am passing on run down dumps or small apartments. I hate to say it, but I think the crash came and went in 2009.

Edited December 4, 2010 by Realistbear

[winkie]

Depends when you bought, were you bought and how much interest you are paying....the recent highly leveraged now sitting on voids I would think are wishing they hadn't signed on that dotted line.

[Realistbear]

As I was saying..............................

[winkie]

As I was saying..............................

Did you buy that place in Spain in the end? .... some good potential BTL opportunities over there.

[Sibley's Love Child]

Meh, it's the Daily Telegraph; no surprise that they'd be ramping BTL:

http://blogs.telegraph.co.uk/finance/ianmcowie/100008808/never-mind-the-riots-feel-the-13-5pc-yield-on-student-buy-to-let/

In any event, I don't buy it. Firstly (from the article):

"For new landlords, the picture is less rosy. David Black from financial analysts Defaqto calculated that the average fee for a £150,000 buy-to-let mortgage was nearly £3,000 on a mortgage with an interest rate of 5pc. Most of these mortgages will require a 30pc deposit."

Plus, from what I have read, most lenders will only allow a certain number of properties for BTL (10, I believe). So the only ones who will be doing the 'hoovering-up' of properties will be those that can afford to buy outright. Something tells me there'll still be a little slack despite this 'army' of scumlords....

Edit: Actually, all that is largely irrelevant. Three words: Local Housing Allowance.

Edited December 4, 2010 by Sibley's Love Child

[blackgoose]

I am going to have a huge BTL empire, but only when this crash plays out.

[Bruce Banner]

I am going to have a huge BTL empire, but only when this crash plays out.

You're a sucker for punishment then .

[Stars]

I am going to have a huge BTL empire, but only when this crash plays out.

The country may or may not have a shoprtage of housing, but there is no doubt the country has no shortage at all of vain, self serving sh1ts

[lastlaugh]

I hate to say it, but I think the crash came and went in 2009.

You might just be "The Last Bear", Realist Bear?

[Meat Puppet]

You're a sucker for punishment then .

Maybe he's just a people person. Someone who enjoys trying to get the rent out of Britny before she blows her benefit on fags and cosmetics.

[miko]

I hate to say it, but I think the crash came and went in 2009.

Funny you should say that , I was speaking to a couple today they must have been about mid 30's max , she maybe a little younger.

They bought a four bed victorian terraced house in a not very nice part of East London 10 years ago. They paid 200k and went to sell it for 400k they have had so much interest that they have decided to keep it rent it out and buy another place to live in.

His words anyone that wanted to buy should have bought two years ago.

[Si1]

...they have had so much interest ...

thing is - "lots of interest seems" to affect the market, ie causing people to hold on to property

this is despite the fact that this interest may be from people who actually couldn't get the mortgage when they actually applied beyond the offer letter

don't know how that would play out apart from increasing the standoff

Edited December 4, 2010 by Si1

[Authoritarian]

The country may or may not have a shoprtage of housing, but there is no doubt the country has no shortage at all of vain, self serving sh1ts

The political vacuum created by the left and the right ensures that this sort of activity goes on unopposed.

If the British public & the politcal class both agree that high house prices are a good thing then it's inevitable that "entreprenueurs" such as blackgoose attempt to make a quick buck out the gov't privileges game.

Being rich is better than being right.

Edited December 4, 2010 by Chef

[Giordano Bruno]

I am going to have a huge BTL empire, but only when this crash plays out.

You could join the Wilson club.

[Si1]

That is quite significant if your mates are indicative of the general sentiment of owners in that market..

no it isn't

sentiment of lenders, surveyors and bond-purchasers is much more important

[miko]

thing is - "lots of interest seems" to affect the market, ie causing people to hold on to property

this is despite the fact that this interest may be from people who actually couldn't get the mortgage when they actually applied beyond the offer letter

don't know how that would play out apart from increasing the standoff

I know the whole thing just totally baffles me right now. I don't know where we are or what is going to happen. I should have asked them if they had had any proper offers.

Two things they did say that I have also seen, 1 London seems to be getting so crowded , 2 many in the more expensive west are going to the cheaper east where their house was .

They are in the lucky camp as having bought 10 years back they now have the equity to take advantage of the market and move forward those that have not are stuffed.

Are we going to return to people having to rent for life while others due to equity now are the only ones able to buy up all the property ?

[Stars]

The political vacuum created by the left and the right ensures that this sort of activity goes on unopposed.

If the British public & the politcal class both agree that high house prices are a good thing then it's inevitable that "entreprenueurs" such as blackgoose attempt to make a quick buck out the gov't privileges game.

Being rich is better than being right.

I'm of the opinion that the real choice is - try to change the british public, or find somewhere else to live while Britain falls apart. Joining in and standing on other people's necks is a bit much for me.

I understand your point though

Edited December 4, 2010 by Stars

[Si1]

I know the whole thing just totally baffles me right now. I don't know where we are or what is going to happen. I should have asked them if they had had any proper offers.

Two things they did say that I have also seen, 1 London seems to be getting so crowded , 2 many in the more expensive west are going to the cheaper east where their house was .

They are in the lucky camp as having bought 10 years back they now have the equity to take advantage of the market and move forward those that have not are stuffed.

Are we going to return to people having to rent for life while others due to equity now are the only ones able to buy up all the property ?

london is poss crowded because the housing benefits paradox still hasn't been sorted out, possibly

and no your last point is unlikely as long as there is a free market, imho, in the long run, but how we get to 'the long run' is a matter for conjecture

[plummet expert]

http://www.telegraph.co.uk/finance/personalfinance/investing/8179545/Is-buy-to-let-the-key-to-easy-riches-once-again.html

Despite this week's gloomy governmental house price predictions, there is one group of property investors that is doing very nicely, thank you.

Britain's army of buy-to-let landlords, if they have chosen their properties wisely, are now benefiting from record rents, high demand, shrinking void periods, and often very low interest rates on their mortgages.

The market is beginning to open up for new entrants too, with specialist lending companies such as

Paragon

wanting to take on new business, and larger groups, such as Santander's buy-to-let arm, showing an interest in lending to more small landlords next year.

In my area there are hardly any properties available to let and they tend to get around £1000 for a somewhat nasty 2 or 3 bed bungalow. Seeing a few bungalows getting snapped up and then put back on the market to let.

We may be entering a new era for the property market where the landlord class once again calls the shots and any drops in prices are met with a rapid response team of entrepreurs armed with a record low interest rate mortgage from Paragon. This wil be the best outcome for the government and VIs as it will stabilise the property market and keep supply down as rents rise and bring in even more buyers.

Hey, this is not like you! B t L mortgages are quite expensive and what's more, rents for many homes (except very small flats) have been dropping. That's according to my own experiences and the figures on the site nestoria. The unintended landlord is back. Pirces are falling and will carry on doing so because the finance is just not there for people at the current prices. The FSA is seeing to that just as I said some months ago it would. IO is being withdrawn for most cases along with silly multiples. Deposit requirements and proof of income are strict. The amount of new lending has been falling for many months. The cuts have hardly begun. The only thing which is not yet present is normal and higher interest rates - but they are urging themselves upward as the money markets tighten.

I can see no way that property will start to rise in any menaingful way for a good two years. You may see blips, but the trend is firmly down and will need to be 25-40% from here to reach the long term trend price depending on area and subject only to inflation combined with wage increases. Inflation itself is becoming a problem and will result in IR rises within the course of 2011.

The fact that manufacturing may show some recovery does not cause a revival of house prices - only the ability to borrow will do that. BTL folk I know are quite worried and the only ones not so worried are wealthier developer/refurbish and let types with alot more money.

[miko]

That is quite significant if your mates are indicative of the general sentiment of owners in that market..

Do you know if they will incur holding costs when they rent it out or will it generate an income ?

Never got to that question , however lets say they owe £150k having put down a 10% deposit when they bought and have paid £30k back since. If they took another £100k out of the property and had a mortgage of £250k judging by how rent's have gone up in east London and how low mortgage rates are they should cover themselves on a repayment mortgage.

[Stars]

Are we going to return to people having to rent for life while others due to equity now are the only ones able to buy up all the property ?

Yes

[Authoritarian]

I'm of the opinion that the real choice is - try to change the british public, or find somewhere else to live while Britain falls apart. Joining in and standing on other people's necks is a bit much for me.

I understand your point though

It's a noble cause, but I for one have had my fill of the British public; I honestly believe that most of them can't wait to have their necks stood on. Put it this way, they're not exactly doing a great job convincing me otherwise.

95% of people won't ever be able to understand LVT, and of the 5% that do 95% of that group are opposed to the idea.

Given a free choice between a more equitable sharing of wealth coupled with financial stability and a housing market we can play monopoly with, my money would be on the latter winning British hearts and minds. 300 years' worth of financial history tells me that we're going to be repeating the same mistake in 2025.

Edited December 4, 2010 by Chef