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Good Time To Btl ?

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Surely , right now , in light of all the news that came in last week and considering what lies ahead in terms of government legislation you’d have to be ‘certifiable’ to buy a BTL property, especially a new build, wouldn’t you ?

Let us review the facts:-

• Average price of property to average salary at record highs (if you use Right move data about 8 x ) compared to long term trend of 3.5.

• New build flats falling in price ( according to ‘smartnew home’s) ( was it 5-6 % Y.O.Y) (And that ignores all the ‘incentives’)

• Some lenders ( Portman BS) refusing to loan on new builds because of the overvaluations and oversupply of properties, which is likely to get worse because of the abolition of the SIPPS plan.

• No tax break from SIPPS for owning a BTL.

• New legislation in effect from April 2006 forcing landlords to be licensed, meaning proper maintenance = more expense and you’ll have to declare any income / profit (ha ha), could lead to more supply as BTLs sell up.

• As if that weren’t enough to persuade you that now is really not a good time to BTL or to Buy in general, as of April 2007 the government will take control of the 700,000 empty properties around the country and rent them out – should effect the supply and demand a bit I would think ! Watch those rents collapse ! and prices with them.

• There does already appear to be an oversupply of rental property – we negotiated approx 20% off the rent because the landlord had no other takers.

Any takers ?!

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Surely , right now , in light of all the news that came in last week and considering what lies ahead in terms of government legislation you’d have to be ‘certifiable’ to buy a BTL property, especially a new build, wouldn’t you ?

Let us review the facts:-

• Average price of property to average salary at record highs (if you use Right move data about 8 x ) compared to long term trend of 3.5.

• New build flats falling in price ( according to ‘smartnew home’s) ( was it 5-6 % Y.O.Y) (And that ignores all the ‘incentives’)

• Some lenders ( Portman BS) refusing to loan on new builds because of the overvaluations and oversupply of properties, which is likely to get worse because of the abolition of the SIPPS plan.

• No tax break from SIPPS for owning a BTL.

• New legislation in effect from April 2006 forcing landlords to be licensed, meaning proper maintenance = more expense and you’ll have to declare any income / profit (ha ha), could lead to more supply as BTLs sell up.

• As if that weren’t enough to persuade you that now is really not a good time to BTL or to Buy in general, as of April 2007 the government will take control of the 700,000 empty properties around the country and rent them out – should effect the supply and demand a bit I would think ! Watch those rents collapse ! and prices with them.

• There does already appear to be an oversupply of rental property – we negotiated approx 20% off the rent because the landlord had no other takers.

Any takers ?!

I agree with you. Now would seem to be a ridiculous time to buy. However the nature of any market is that it tends to overshoot. I would anticipate that the bad news you cite will be reflected in the sale prices of SOME of these properties in the future. Some will be underpriced and opportunities will exist to capitalise on this.

I have however been accused of doing the equivalent of selling food to starving kids by indicating that I might be tempted to buy a BTL at some stage in the future if the numbers work. Extraordinary.

The Fox

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I have however been accused of doing the equivalent of selling food to starving kids by indicating that I might be tempted to buy a BTL at some stage in the future if the numbers work. Extraordinary.

The Fox

This site is made up of two types of people. There are those (mainly FTBers who want a house and cannot see why people want, need or should be allowed to own more than one house) and those that see property as simply another asset class. I agree with you, there will be a time when BTL makes sense again and while last time I became a landlord through necessity, this time round, when the time is right, I will probably add a house or two to my investments (provided I have time to treat it as a proper business tho).

Edited by eek

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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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