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Btl - Why The Hatred ?


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Housing financialisation (bubble), The White Horse.

IMO the BuyToLet investors, not happy with 1 home, but seeking more to outbid and rent out to younger families have fallen into the trap.

Just come back because this was nagging me.

Not fallen, but 'danced' into. Danced into BTL at ever higher crazy prices, way out of reach of so many FTBs, outbidding them... saying 'Generation Rent' / 'Population Growth' / 'Core-Voter' and on and on it goes. And suddenly concerned larger BTLers are threatening all kinds of nonsense to try and make Gov do a U-Turn... 'Landlord Union' / 'Mass S21s' - ....'Get the tenants on the streets and into emergency housing and Gov will back down'.

Completely reckless and irresponsible from landlords/high-leveraged BTLers who have 50+ tenants, including many families. Greed devoured itself. And utterly clueless to what Government is and how they will react. Years of watching BTLers buy more and 'moar' properties, talking about climbing peak of mountain, how they're worth £Millions... they have to go down. It has to be that way.

[...]Check this out.

The most brilliant letter Ros has ever seen, addressed to Ian Cowie, concludes with the following:

You claim that this levy is backed by the Bank of England. I have not seen reports of any such support. What evidence have you seen?

The shine comes off this argument if you read either the June or December 2015 Financial Stability Reports, but why would anyone look at either of those to work out which way the wind was blowing on a lending sector that went from nothing to £200bn, and about 15% of the market, in just twenty years, during what was arguably the most mental credit boom in modern financial history?

Come to think of it, why would you think at all or read anything? Just borrow money and buy f**king houses. What could possibly go wrong?

Edited by Venger
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I often read this forum as a way of measuring the sentiment towards landlords (a term that I hate by the way). I can understand the frustration of people against landlords and the dysfunctional housing market. Many property owners are fortunate only by the date of their birth and the timing when they first bought a house.

The hatred towards landlords is truly palpable on this forum and TBH it's probably not worth the stress of posting but I feel that sometimes a little balance is needed.

[....]The difference between a landlord who owns outright and one who is highly indebted might be measured in hours of sleep over the next few months or years. [...] I think we have all come across those highly indebted a88holes who do have a superiority complex because a bank has lent them money to buy a rental property or properties. This is IMO doubly irresponsible on behalf of the banks and the landlord. The market has become far too bloated and is an accident waiting to happen.

The government has been instrumental in fueling market demand without addressing supply issues.

I haven't purchased a house for a number of years. Is the system unstable - yes. Are highly leveraged landlords fools - perhaps depending on when they decide to exit the market. With respect to your last point, of course being highly leveraged in the present market is very dangerous to everyone involved and should rightly be curbed. Is it a Ponzi scheme - looks that way now.

Perhaps the biggest question is what the feck will the government do about the housing shortage?

[....]PS Minsky seems popular now since the financial crises and the movement towards more Keynsian ideologies. Unfortunately, a trait of economics is that it is fantastic as a tool for explaining why things have happened but pretty crap as a predictor.

If it's Real-HPC approaching, then no matter how lowly-leveraged you area, the value of your investment-rental and BTL properties will fall alongside wider market.

Cringes me out to read though processes of BTLers at times. Some have bits and pieces of the paradigm. Yet come back with 'supply and demand' / 'population growth' / 'housing shortage' / demand / LHA waiting lists and not taking action against rogue landlords as too costly/litigation. Sigh.

Real estate runs on money. The BTLers are active market participants. No one dragged them into any bank and forced them to sign up to jumbo debt in unregulated market, to people-farm their fellow citizens. Imo, they exist to eat HPC, and so banks can get debt on their main family homes when they're forced to sell. Guardian a couple of years ago suggested that fewer than 2 in 5 residential homes have mortgages. That means owners not paying the banks any money in mortgages.

Daily Mail

Average UK house price to hit £780,000 by 2040, says leading think tank

Kilo Charlie, My World, 9 hours ago

We purchased a property in 1983 for £72,000.........today it's worth £650,000 plus. It's certainly possible and quite likely.

Sam, Bucks, 3 hours ago

Bought house in ,74 for 16k added extention about £8k now valued at £480k you do the maths?

That 'fortunate' time may be coming to an end. And a lot of these owners are the prancing boomers who smug on about how much their homes are worth, as they kick around in houses with empty bedrooms. Banks may have strong motivation for HPC and fresh lending in volume, for generations to come, at stable prices.

'Look - we're still not a hundred per cent sure that this is a fantasy. And if it turns out it's not, you're going to feel plenty silly as you drive your clapped-out old hanger back to Nowhere City.' Rimmer ducked

Rimmer wasn't really watching the in-flight movie, but he was wearing the headset as a kind of sanctuary to avoid Lister's accusing grin.

My god, my god, my god. He moaned softly. The innards of his psyche were there for all to see: putrid and rotten and rancid. His neuroses parading like grinning contestants in the Mr Universe contest!

He glanced over at Lister, who had taken out a well-worn leather wallet and was looking sadly at some dog-cared photographs of his family back in Bedford Falls. Hadn't Lister's fantasy been even more ridiculous? A leaky house? A clapped-out car? A little shop? It was so... corny. A girl-next-door type wife, two kids. If they were playing Better Than Life, he could have had anything he wanted. Absolutely anything be wanted. And this was his choice? Something so ordinary, so small, so . . . normal?

Oh my god, my god, my god. That was the truth, wasn't it? Lister's fantasy was so much more mature than his. Lister didn't need mega-wealth to make him happy. He needed fourteen dollars and twenty-five cents. He didn't need a stunning-looking actress desired by all. He just wanted someone who cared for him.

Lister's was the fantasy of a man at peace with himself. A man who felt he had nothing to prove. Rimmer's was twenty-five foot cars, hundred and forty storey buildings, airports, Lear Jets, a twenty million dollar bosom, a forty billion dollar fortune, his father as his own chauffeur . . . It couldn't be a fantasy. No one could be that screwed-up!

- Red Dwarf

Values can cascade back down quickly. Values are set at the margin. You can't claim your BTL is worth £350K, when owner of near identical house across the road accepted £270K a few months ago, and the inheritors of a near identical house a few doors down just accepted £200K... in a colder market, MMR constrained, and far fewer BTLer interest (3% + 2017-2020 tighter tax changes in mind, and whatever else BTL is likely to be hit with.). And same true for the LLs own homes which are frequently upper end housing stock. We may see upsizers seriously dry up, leaving BTLers who need to sell, in an illiquid market, with only low offers around.

When the volume of credit is large, investors can perceive vast sums of money and value when in fact there are only repayment contracts. [..]When the market turns down, the dynamic goes into reverse. Only a very few owners of a collapsing financial asset trade it for money at 90 percent of peak value. Some others may get out at 80 percent, 50 percent or 30 percent of peak value. In each case, sellers are simply transforming the remaining future value losses to someone else. In a bear market, the vast, vast majority does nothing and gets stuck holding assets with low or pre-existant valuations. You see - the boomer homeowners never really had a million pounds from his £1m valued house. The idea that it had a certain financial value as in his head and the heads of others who agreed. When the point of agreement changed, so did the value. Poof! Gone in a flash of aggregated neurons. This is exactly what happens to most investment assets in a period of deflation.
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From my point of view the stuff the BTLers still come out with is so hackneyed and trite.

They need to look at themselves hard, and see how the world is changing against them.

Replace Culture for HPCers, and Idirans for BTLers, imo.

And, BTLers you're perfectly understood by the political authorities, central banks and lending back. You got what you wanted on the BTL, remember that.

Reasons: the Culture
The Culture went to war to safeguard its own peace of mind: no more. But that peace was the Culture's most precious quality, perhaps its only true and treasured possession. Having prepared and steeled itself (and popular opinion) through decades of the former, it resorted eventually, inevitably, like virtually any organism whose existence is threatened, to the latter.

[..]Indirectly, but definitely and mortally, the Culture was threatened... with conquest, resource and territory, but also with something more important: the loss of its purpose and that clarity of conscience; the destruction of its spirit; the surrender of its soul. Despite all appearances to the contrary, the Culture, not the Idirans, had to fight, and in that necessity of desperation eventually gathered a strength which - even if any real doubt had been entertained as to the eventual result - could brook no compromise.

Reasons: the Idirans
[..]At worst, they perhaps considered that the war was being begun in an atmosphere of mutual incomprehension. They could not have envisaged that while they were understood almost too perfectly by their enemy, they had comprehensively misapprehended the forces of belief, need - even fear - and morale operating within the Culture.

-Consider Phlebas *(with slight tweak)

Edited by Venger
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