slacker Posted December 4, 2013 Share Posted December 4, 2013 (edited) BTL was a rarity (I remember one person doing it in early 90s), now many people we know have at least one other property which they rent out. One of them has a mini empire - adding a new one every month or so. Some friends appeared to come in to a few quid recently and BTL was top of the list. I seem to remember this happening before IRs dropped. What was the catalyst for it? Edited December 4, 2013 by slacker Quote Link to comment Share on other sites More sharing options...
@contradevian Posted December 4, 2013 Share Posted December 4, 2013 (edited) Tory 1988 Housing Act which created insecure short term tenancies on the landlords terms, with relatively easy and straightforward eviction process. Edited December 4, 2013 by aSecureTenant Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted December 4, 2013 Share Posted December 4, 2013 How many council houses are they building near you? Quote Link to comment Share on other sites More sharing options...
shindigger Posted December 4, 2013 Share Posted December 4, 2013 Not read the other reply/ies. But i'm gonna go ahead and say Gordon Brown ******ing about with pensions. Gordon Brown ******ing about with interest rates. Quote Link to comment Share on other sites More sharing options...
terryturbojr Posted December 4, 2013 Share Posted December 4, 2013 BTL was a rarity (I remember one person doing it in early 90s), now many people we know have at least one other property which they rent out. One of them has a mini empire - adding a new one every month or so. Some friends appeared to come in to a few quid recently and BTL was top of the list. I seem to remember this happening before IRs dropped. What was the catalyst for it? I think evolution in mortgage market, so availability of finance was the biggest driver. If people can borrow, they will. Add to that a shortage of house building and you're onto a winner Quote Link to comment Share on other sites More sharing options...
SirGaz Posted December 4, 2013 Share Posted December 4, 2013 You used to have to reside in the property that had the mortgage on, not take out a mortgage for another house that you didn't live in. I think that's right, My neighbour tried to re-mortgage his wife's pre marital home which they were renting out and it was refused point blank, he had to re-mortgage the family home. Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted December 4, 2013 Share Posted December 4, 2013 Scrapping of the dividend tax credit, made BTL pensions make more sense. Removal of MIRAS gave an innate advantage to BTLers over owner occupiers. 24/7 property porn. Dot com bubble scared people away from shares. Only exact things I can think of. Quote Link to comment Share on other sites More sharing options...
onlyme2 Posted December 4, 2013 Share Posted December 4, 2013 Government wanted lots of rented accommodation to hide their migrant labour policy push. Student rental demand heavily affected lots of areas too, tertiary education establishments encouraged to grow and no need to provide any accommodation themselves to satisfy demand. Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted December 4, 2013 Share Posted December 4, 2013 Government wanted lots of rented accommodation to hide their migrant labour policy push. Student rental demand heavily affected lots of areas too, tertiary education establishments encouraged to grow and no need to provide any accommodation themselves to satisfy demand. That has all changed now though? Lost count of the student "villages" that I keep coming across in Edinburgh, BTL in those areas must be feeling the pain . Quote Link to comment Share on other sites More sharing options...
Dorkins Posted December 4, 2013 Share Posted December 4, 2013 House prices rising faster than wages created a positive feedback loop whereby people who already owned property could withdraw equity to use as a deposit faster than potential FTBs could save one out of wages. Quote Link to comment Share on other sites More sharing options...
chicker Posted December 4, 2013 Share Posted December 4, 2013 For years prior to the introduction of the AST properties were left empty rather than let to "trouble some " tenants. It took a while for the mentality to change but once it did BTL kicked off big time. Initially I get the feeling very little money was borrowed as the money came from mature adults who had inheritances, redundancy money, insurance policies etc. Introducing cheap and easy money took it up another gear and became possible for another generation (some with very little income or money) to jump on board. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted December 4, 2013 Share Posted December 4, 2013 (edited) House prices rising faster than wages created a positive feedback loop whereby people who already owned property could withdraw equity to use as a deposit faster than potential FTBs could save one out of wages. One of the many reasons the young are pissed off. Edited December 4, 2013 by 7 Year Itch Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted December 4, 2013 Share Posted December 4, 2013 1. Private sector pensions are rubbish compared to public sector ones. 2. People saw more security in bricks and mortar than in share based pensions. 3. Increase in student numbers. 4. Dinner party conversation. 5. Everyone else is doing it. 6. You can't fail with BTL darlink. Quote Link to comment Share on other sites More sharing options...
DabHand Posted December 4, 2013 Share Posted December 4, 2013 Availability and ease of credit (i.e. mortgages). Landlords were wealthy people who happened to own more buildings than they could use. Renting was always more expensive than a mortgage because the landlord was arbitraging his superior credit rating. Lending on property that the borrower wasn't going to live in themselves was considered rather risky. Remember when remortaging was something only cads did - "A second mortgage, Dierdre - the man must be a Communist spy!" Leveraging property is now the preserve of every moron, not just those that are already rich. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted December 4, 2013 Share Posted December 4, 2013 (edited) Has anyone said liar loans yet ? Edited December 4, 2013 by TheCountOfNowhere Quote Link to comment Share on other sites More sharing options...
juvenal Posted December 4, 2013 Share Posted December 4, 2013 (edited) 2. People saw more security in bricks and mortar than in share based pensions. Plus the increasing suspicion and distrust of private pensions. Those who had them got annual statements and saw the volatility of the market and the charges extracted from the pension pot. I knew a guy who sold them after one weeks 'training'. Edited December 4, 2013 by juvenal Quote Link to comment Share on other sites More sharing options...
Goat Posted December 4, 2013 Share Posted December 4, 2013 (edited) 2. People saw more security in bricks and mortar than in share based pensions. Equitable Life? A lot of Boomers lost a lot of money in that one, those that didn't knew people that did. Also the end of the dot-com bubble, no-one wanted to be near the stock market either. Factor in declining annuity rates making private pensions even more expensive and the fact that house prices were starting to shoot up anyway and, hey presto, everyone wanted to chuck every spare penny into bricks and mortar. Edited December 4, 2013 by Goat Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 4, 2013 Share Posted December 4, 2013 Because it's "easy" money which requires very little effort to get a profit. Groucho Marx I'm sure said something along the lines of the 20's share bubble "I've made several thousand dollars and done nothing today". Why work when you can get "free" money by the value of your BTL empire going up and up and up. As noted elsewhere Brown fecking about with pensions / interest rates and the dot com crash all helped to push people to alternative investments. Quote Link to comment Share on other sites More sharing options...
long time lurking Posted December 4, 2013 Share Posted December 4, 2013 Yep all the above +...... Has Eric run out of red pixels already ? Quote Link to comment Share on other sites More sharing options...
John51 Posted December 4, 2013 Share Posted December 4, 2013 Might have been BS but in the 80's I was told that financing a BTL required a min 30% deposit and the loan was to be paid in 7 years. A common theme of home ownership back then was that the mortgage cost more than renting initially but parity came in at about 5 years. A house nearby converted to 6 flats had between 2000 to 2006 at least 10 tenants that bought their own properties because the mortgage was cheaper than renting. Sort of a courtship ritual, hook up, shack up in a rental for 3 to 6 months to see how they get on, then buy a place. Quote Link to comment Share on other sites More sharing options...
Dorkins Posted December 4, 2013 Share Posted December 4, 2013 Labour changing the way that Local Housing Allowance levels were set so that they automatically tracked the 50th percentile of local rents. This also created a positive feedback loop by eliminating the incentive for landlords to offer anything for rent at less than last year's 50th percentile, setting a floor under rents in the lower half of the market. When the 50th percentile was recalculated the next year it had - surprise surprise - increased, which meant the LHA rate also increased, which set an even higher floor under rents etc etc This is how we got to an annual spend of £25bn on housing benefit and the DWP paying >40% of the total rent bill in the "private" rental sector. Quote Link to comment Share on other sites More sharing options...
winkie Posted December 4, 2013 Share Posted December 4, 2013 All the above plus the demutualisation of building societies turning them into banks.....equity withdrawal rule changes to enable further property to be purchased from gains made on existing property, the end of protected rents and sitting tenants new AST rental contracts. Quote Link to comment Share on other sites More sharing options...
juvenal Posted December 4, 2013 Share Posted December 4, 2013 An obsession with housing and money fuelled by Property Porn tv. A few below... A Place By the Sea A Place in Greece A Place in the Sun A Place in the Sun: Home or Away Build a New Life in the Country Build, Buy or Restore Changing Rooms Did They Pay Off The Mortgage In 2 Years? DIY SOS Escape to the Country Extreme Makeover Grand Designs Grand Designs Abroad Home Home From Home Homes Under the Hammer Honey I Ruined the House Hot Property House Auction House Busters House Chain: Under Offer House Doctor House Hunters in the Sun House Invaders House Price Challenge House Race Houses Behaving Badly How Not to Decorate How To Be a Property Developer How to Rescue a House I Want That House I Want That House Revisited Living in the Sun Living etc Location Location Making Space Moving Day My Place in the Sun Nice House… Shame About the Garden Other People's Houses Our Home Pay Off Your Mortgage in 2 Years Property Dreams Property Ladder Put Your Money Where Your House Is Relocation, Relocation Restored to Glory Room For Improvement Selling Houses Staying Put Streets Ahead Super Agents Superhomes Through the Keyhole To Buy or Not to Buy Trading Up Uncharted Territory Up Your Street Would You Buy a House with a Stranger? Quote Link to comment Share on other sites More sharing options...
justthisbloke Posted December 4, 2013 Share Posted December 4, 2013 The single biggest starter was the 90s HPC. A lot of people found themselves wanting to move but unable to sell their house. The banks started out tentatively offering a few rental mortgages in the light of the new ASTs. These original "accidental landlords" found it worked - as did the banks. The rest is history (and an enormous wall of borrowed money). Quote Link to comment Share on other sites More sharing options...
Dorkins Posted December 4, 2013 Share Posted December 4, 2013 The single biggest starter was the 90s HPC. A lot of people found themselves wanting to move but unable to sell their house. The banks started out tentatively offering a few rental mortgages in the light of the new ASTs. These original "accidental landlords" found it worked - as did the banks. The rest is history (and an enormous wall of borrowed money). I think the shape of the house price graph in the period 1989-1997 was pretty formative for people born in the 1950s-1960s. Nominal prices: The early 1990s HPC was primarily a crash in real terms and house prices didn't fall very far in nominal terms. By 1997 the next bubble had lifted everybody out of negative equity and the lesson learned was: HPCs don't really matter, all you have to do is wait a few years and the market will inexorably rise again. It's clear from the mainstream discourse today that this folk memory from the 1990s is alive and well. Almost everybody assumes that even if there was a bit of an HPC, nominal prices would inexorably rise and bail everybody out again within a few years. The idea that house prices might fall significantly (50%+) in nominal terms and stay there for decades is totally off the radar. Quote Link to comment Share on other sites More sharing options...
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