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Article: Is this why you can't buy your first home in London.

In the summer of 2011, at an internal presentation by the directors of a major London estate agent, the staff were told about a strategy that promised to improve the bottom line. The plan, and its like at other firms, would have implications for the capital’s home hunters and sellers to this day. The company was facing an unfamiliar situation. The post-crash rentals boom had seen the lettings department offloading properties in hours and lining their pockets with fees, while their counterparts in sales struggled.

The strategy announced would brilliantly turn the new market conditions to their advantage. A former employee has told the Standard that the directors instructed their agents to target the small but growing group of wealthy investment buyers with their for-sale properties. This would allow the firm to take its usual sales fee then rent out the property for the buyer and manage it on their behalf — turning properties they would once have sold to families and young professionals into long-term cash cows.

Alex Weekes, 26, was until last year an agent at the firm, Ludlow Thompson — a major property player which claims to have let and sold £1 billion worth of property in London in 2012. Buyers chasing popular properties have long suspected that they are being outfaced by wealthy investors for the homes they want. But Weekes’s story, and investigations by the Standard, can reveal that agents have responded to the booming rental market by making investment buyers a conscious priority over ordinary buyers looking to own and occupy.

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Rest of the article: Link

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Only idiots blinded by greed and/or desperation would buy into the housing market as an investment at the current prices/interest rates.

The are not favoring BTL'ers,...they are screwing them.

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Buyers chasing popular properties have long suspected that they are being outfaced by wealthy investors for the homes they want. But Weekes’s story, and investigations by the Standard, can reveal that agents have responded to the booming rental market by making investment buyers a conscious priority over ordinary buyers looking to own and occupy.

All through the "boom" it was recognised that most BTLers could borrow more than most first time buyers and therefore could bid up FTBer properties but it looks like that sort of thing has spread to the wider market. Presumably because some "investors" have more capital to start with - as lending has supposedly been tightened for all buyers?

Sounds like a mainly overseas buyers/London thing as well? Does it really mean that they targeted wealthy overseas investors?

Edited by billybong

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Only idiots blinded by greed and/or desperation would buy into the housing market as an investment at the current prices/interest rates.

The are not favoring BTL'ers,...they are screwing them.

Yes they are.Of course its a million miles away from the London property market but in my home down there is an area with 8 terrace streets.All tiny houses and not very nice at all.Used to go for around £15k.Most people in them were working but in low paid jobs but couldnt move up to a bigger house.

Along came the property boom and they went from £15k to £70k in 3 months.I kid you not.The local estate agent had southern buyers phoning them and buying them up without every coming here.The locals all sold them as quick as they could knowing these loons were buying rubbish for 4 times their worth.

The locals then mostly bought much nicer houses for an extra £10k and the savy southern "investors" ended up with street upon street of BTLs.

Roll forward to now most of the houses have long voids,need £000s spending on them and every other one is up for sale for £25k.It must of been happening everywhere if it happened in our sleepy little town.

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Guest eight

Yes they are.Of course its a million miles away from the London property market but in my home down there is an area with 8 terrace streets.All tiny houses and not very nice at all.Used to go for around £15k.Most people in them were working but in low paid jobs but couldnt move up to a bigger house.

Along came the property boom and they went from £15k to £70k in 3 months.I kid you not.The local estate agent had southern buyers phoning them and buying them up without every coming here.The locals all sold them as quick as they could knowing these loons were buying rubbish for 4 times their worth.

The locals then mostly bought much nicer houses for an extra £10k and the savy southern "investors" ended up with street upon street of BTLs.

Roll forward to now most of the houses have long voids,need £000s spending on them and every other one is up for sale for £25k.It must of been happening everywhere if it happened in our sleepy little town.

My cousin is a lawyer working in London and was definitely engaged in this (he was at it in London too, mind). Chances are if he was so were all his chums.

Ironically he came from a similar kind of house/street as his father, my uncle, worked at a nearby engineering company. That company is now gone and the site turned over to..... well, I'll give you one guess.

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Yes they are.Of course its a million miles away from the London property market but in my home down there is an area with 8 terrace streets.All tiny houses and not very nice at all.Used to go for around £15k.Most people in them were working but in low paid jobs but couldnt move up to a bigger house.

Along came the property boom and they went from £15k to £70k in 3 months.I kid you not.The local estate agent had southern buyers phoning them and buying them up without every coming here.The locals all sold them as quick as they could knowing these loons were buying rubbish for 4 times their worth.

The locals then mostly bought much nicer houses for an extra £10k and the savy southern "investors" ended up with street upon street of BTLs.

Roll forward to now most of the houses have long voids,need £000s spending on them and every other one is up for sale for £25k.It must of been happening everywhere if it happened in our sleepy little town.

I know one lass, who with her husband, bought 5 buy to let off plan apartments in Manchester as an investment at the height of the boom.

They've since got divorces after, I vaguely recall, going bankrupt.

Why anyone thinks london can defy reality is beyond me.

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Yes they are.Of course its a million miles away from the London property market but in my home down there is an area with 8 terrace streets.All tiny houses and not very nice at all.Used to go for around £15k.Most people in them were working but in low paid jobs but couldnt move up to a bigger house.

Along came the property boom and they went from £15k to £70k in 3 months.I kid you not.The local estate agent had southern buyers phoning them and buying them up without every coming here.The locals all sold them as quick as they could knowing these loons were buying rubbish for 4 times their worth.

The locals then mostly bought much nicer houses for an extra £10k and the savy southern "investors" ended up with street upon street of BTLs.

Roll forward to now most of the houses have long voids,need £000s spending on them and every other one is up for sale for £25k.It must of been happening everywhere if it happened in our sleepy little town.

This has happened in my neck of the woods (North) with bottom end properties bid up from £25k to £100k. They are now back below £40k. In a crash these old terraced miners cottages always fall off the bottom of the market.

What I don't understand is why this wave of bottom end value collapses is not wiping out investors. Our house values stayed stubbornly low compared to the South East right up to 2002. Values doubled from 2002 to 2004 and then coasted along with small rises. House values are now below 2005 levels and gently dropping. Why are we not hearing about investors that have been wiped out by Northern house price drops?

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Perfect, the more the merrier.

Precisely. It's a pain for those waiting patiently to buy, but every fillip makes the situation more precarious in the longer term.

I'd suggest we have:

BTL being pushed as a no brainer, possibly because:

net lending is in reverse, resulting in:

equity being withdrawn from the market at an increasing rate, despite:

residential customers being assualted with literature saying they ought to borrow, leading to:

BTL being pushed as a no brainer, possibly because:

net lending is in reverse, meaning:

equity being withdrawn from the market at an increasing rate, despite:

residential customers being assualted with literature saying they ought to borrow, leading to:

BTL being pushed as a no brainer, possibly because...ad infinitum

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With regards the BTLers losing out up north, it's fairly straightforward isn't it? There was, and still is, a north/south divide. There is more demand for homes in London / South East, hence the prices remain. Those who made the mistake of BTLing properties in northern areas, where prices have always traditionally been lower, were surely always on a hiding to nothing? More fool them.

I don't doubt that prices in London will have to come down at some point, but I still expect them to be stupidly high I'm afraid :(

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Buying property without it being seen went on in South Wales also < £10k 3 bed needs modernisation......grants obtained to upgrade put in an inside loo etc and then lease to the councils to get HB income.

Talking lots about the North compared to London and the South East....what about the South West? ;)

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Yes they are.Of course its a million miles away from the London property market but in my home down there is an area with 8 terrace streets.All tiny houses and not very nice at all.Used to go for around £15k.Most people in them were working but in low paid jobs but couldnt move up to a bigger house.

Along came the property boom and they went from £15k to £70k in 3 months.I kid you not.The local estate agent had southern buyers phoning them and buying them up without every coming here.The locals all sold them as quick as they could knowing these loons were buying rubbish for 4 times their worth.

The locals then mostly bought much nicer houses for an extra £10k and the savy southern "investors" ended up with street upon street of BTLs.

Roll forward to now most of the houses have long voids,need £000s spending on them and every other one is up for sale for £25k.It must of been happening everywhere if it happened in our sleepy little town.

Sounds like the script from "Local Hero" :lol: Did the spivs see the light and buy an allotment in the end ?

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Ive often thought of lying and using this very tactic on EAs :lol:

It probably works in a high turnover place like London, not so much in Rotherham, where property is probably rented to the same Housing benefit tenants for 20 years or something before its put on the rental market again.

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This has happened in my neck of the woods (North) with bottom end properties bid up from £25k to £100k. They are now back below £40k. In a crash these old terraced miners cottages always fall off the bottom of the market.

What I don't understand is why this wave of bottom end value collapses is not wiping out investors. Our house values stayed stubbornly low compared to the South East right up to 2002. Values doubled from 2002 to 2004 and then coasted along with small rises. House values are now below 2005 levels and gently dropping. Why are we not hearing about investors that have been wiped out by Northern house price drops?

The banks are allowing the over-indebted (i.e. landlords) to move to interest-only loans which, when interest rates are essentially at zero, means a free ride. The bankers have no interest in seeing the market clear because it would show just how bankrupt they are when they're forced to mark their assets to market values. Just one big game.

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The banks are allowing the over-indebted (i.e. landlords) to move to interest-only loans which, when interest rates are essentially at zero, means a free ride. The bankers have no interest in seeing the market clear because it would show just how bankrupt they are when they're forced to mark their assets to market values. Just one big game.

You're right. The music cannot be allowed to stop and the tide must never be able to go out.

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  • 238 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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