Jump to content
House Price Crash Forum
Sign in to follow this  
Buddleia

Proportion Of Uk Property Owned By Btl'ers?

Recommended Posts

Topic says it all: does anyone know what proportion of UK residential property is owned by BTL'ers?

No reason except to satisfy my curiosity - I've been loudly telling people for ages that rampant speculation is the heart of this boom, with the BTL'ers leading the way. But someone told me today that private landlords only own a few percent of residential property and I was off my nelly.

I suppose what I should ask is: what percentage of UK property is owned as a BTL property and has been bought for this purpose in the last ten years.

BTL : Buy to Lose, I fear :ph34r:

Share this post


Link to post
Share on other sites

The official number is somewhere around 6%.

However, you need to recognise not all landlords are entirely honest and tell the revenue/their lender etc that they have a BTL (they can get a better rate on an owner-occupier loan and some don't like paying tax on their gains). The actual percentage is higher than the official figure but nobody really knows how high.

Secondly, they control a far higher proportion of the bottom end of the market (traditional FTB territory) rather than detached houses etc (TTRTR is an exception rather than the rule), which means the bottom of the ladder is actually heavily dependent on BTL purchases/lack of BTL sales.

This area of the market obviously props up sales further up the chain.

I think you and the person you debated with are both right - BTLs control a relatively small part of the market but it was rampant buying in this part of the market that has driven prices so high... and, in my opinion, lack of buying or selling here will drive the reverse (remember BTLs, having priced most FTBs out of this area, now need to keep providing capital for further sales to take place at flat or even higher prices... if they will not or cannot then prices will return to the level where an FTB buys again).

Edited by London-loser

Share this post


Link to post
Share on other sites

Just a quick thought. Although only 6% of properties are owned as BTLs, what proportion of transactions do these represent.

If BTLs are bought and sold after a relatively short time (compared to owner occupiers) then they will represent a much higher proportion of sales than the actual number of BTLs might suggest.

For example, if on average they are turned over twice as often as other properties, then although only 6% will be owned as BTLs at any one time, they will represent 12% of sales.

Share this post


Link to post
Share on other sites

Just a quick thought. Although only 6% of properties are owned as BTLs, what proportion of transactions do these represent.

If BTLs are bought and sold after a relatively short time (compared to owner occupiers) then they will represent a much higher proportion of sales than the actual number of BTLs might suggest.

For example, if on average they are turned over twice as often as other properties, then although only 6% will be owned as BTLs at any one time, they will represent 12% of sales.

Transactions have to be recorded for the purposes of taxation, whether the transaction is laible for stamp duty or not. As such HM Revenue & Customs keep records of transactions. Examining Numbers of property transactions (Table 16.5) reveals the following annual volumes:

1992-93 1179k

1993-94 1297k

1994-95 1304k

1995-96 1159k

1996-97 1346k

1997-98 1472k

1998-99 1383k

1999-00 1565k

2000-01 1430k

2001-02 1511k

2002-03 1635k

2003-04 1495k

2004-05 1702k

____________

Mean 1421k

The number of households in the country is 24million (I'll get a ref for this)

So the percentage of properties traded to total households is on average = 1421 / 24000 = 6%

That means if BTL represents 6% of all property (could somebody provide a ref), selling each BTL once a year would generate sufficient transactional volume to satisfy the entire average annual transactional volume of England & Wales.

Edited by Sledgehead

Share this post


Link to post
Share on other sites

Transactions have to be recorded for the purposes of taxation, whether the transaction is laible for stamp duty or not. As such HM Revenue & Customs keep records of transactions. Examining Numbers of property transactions (Table 16.5) reveals the following annual volumes:

1992-93 1179k

1993-94 1297k

1994-95 1304k

1995-96 1159k

1996-97 1346k

1997-98 1472k

1998-99 1383k

1999-00 1565k

2000-01 1430k

2001-02 1511k

2002-03 1635k

2003-04 1495k

2004-05 1702k

____________

Mean 1421k

GROAN ... think of all that Stamp Duty ... where the fark has it all gone?

Methinks Gordon's done very nicely thank-you-very-much.

Share this post


Link to post
Share on other sites

GROAN ... think of all that Stamp Duty ... where the fark has it all gone?

Methinks Gordon's done very nicely thank-you-very-much.

he'll be doing even better when the CGT bill comes in!!!!!!

Share this post


Link to post
Share on other sites

I believe the CML have figures that BTL mortgages account for 8% of all loans. At its peak a year or so ago it was 9%.

On this evidence it would appear BTL is alive and well. Which indicates why prices are not falling.

I am speculating at this point, so take this with a pinch of salt ........ but I would imagine most BTL are the sub £200k puchases, which makes up 50% of the market as a broad generalisation. On this basis 16%, or 1 in 6, of all typically FTBs houses are probably still being bought by investors.

Pretty sure that this will have a significant effect on prices at the bottom end.

So 6% of houses might be owned by landlords but I suspect its going upwards and may be nearer to 15-20% at the FTB house market.

Share this post


Link to post
Share on other sites

The percentage of BTLs owned that were bought in the last 2 or 3 years would be quite interesting as well.

I can see how BTL could increase volatility in the market -

No emotional attachment

No need to own a BTL

A percentage of BTLs will be owned by risk takers making risky choices, who have bought near the peak.

BUT, is there not an argument that BTL will increase stability -

BTLers are less likely to panic sell due to divorce (splitting the income - if any - of a BTL is easier than splitting the marital home with you ex and her new hubby!!!)

BTLers do not need to trade up.

I am prepared to believe that BTL might increase volatility, especially if a high (40 - 50) % have been bought in the last 2 or 3 years. But it is not necessarily the case, I bet a fairly high proportion of BTLs are owned on relatively low (50-60% max.) LTV, with owners "in it for the long term" (for whatever reason). They won't all sell up.

Share this post


Link to post
Share on other sites

I am prepared to believe that BTL might increase volatility, especially if a high (40 - 50) % have been bought in the last 2 or 3 years. But it is not necessarily the case, I bet a fairly high proportion of BTLs are owned on relatively low (50-60% max.) LTV, with owners "in it for the long term" (for whatever reason). They won't all sell up.

ImUpNorth seems to be suggesting that BTL could even exceed the yearly transaction volume.

Furthermore he is also suggesting that these small speculators may make up a significant proportion of ownership at the cheaper end of the market.

To those who follow markets closely, both of these statistics would suggest danger ahead.

Of course the most interesting point of the thread is that ImUpNorth takes comfort from this .... B)

Edited by Sledgehead

Share this post


Link to post
Share on other sites

ImUpNorth seems to be suggesting that BTL could even exceed the yearly transaction volume.

Furthermore he is also suggesting that these small speculators may make up a significant proportion of ownership at the cheaper end of the market.

To those who follow markets closely, both of these statistics would suggest danger ahead.

Of course the most interesting point of the thread is that ImUpNorth takes comfort from this .... B)

http://www.statistics.gov.uk/cci/nugget.asp?id=1052

Seems to suggest the private rented centre is roughly the same size as 24 years ago (I do take the point that there are probably more amateurs and less professionals now being landlords).

Anyway, please explain your logic... is there any more to it than increased numbers of speculators leads to increased volatility?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 302 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.