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moonriver

The Times..btl 500,000 Poised To Sell In A Year

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I have just seen this story discussed on The Wright Stuff (channel 5).

Page 2 of today's Times, heading is

" BTL landlords poised to sell 500,000 homes in a year".

http://www.thetimes.co.uk/tto/news/uk/article4681297.ece

A presenter on the show told us this is because George Osbourne's crackdown on LL's has bought confidence in BTL to a low point, a study found.

There used to be concessions in stamp duty and mortgage refief, but that is all going to go, she said.

Matthew Wright remarked this is good news for everybody other than BTL LL'S because going on supply and deman, half a million properties pouring onto the market in a year has to have a watering down effect on the housing market, So prices won't rise as much, making them more affordable.

Anothe member of the panel remarked that potentially this would put the wind up international buyers that are flooding London, when they see the market declining, so they will think of to another international city to go and put their dirty money in.

Matthew replied this could be catesptophic news for those BTL LL's who bought an an alternative to having a pension, but as a whole, he can't help but think it is good news.

:D

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Plenty already up for sale, and it is not clear at all that they are 'poised to sell' at the offered prices. Reckon a scenario of a bit of a firesale is quickly playing out, location dependent of course. 300 auction properties up for sale near me, many of which are currently tenanted and we'll quickly see whether there is an appetite amongst 'greater fools' to step up to the plate.

Increasingly it seems very likely that the music has already stopped and many BTLers just have not come to terms with it.

if you can price aggresively, if you can make the decision to act quickly, and your properties are vacant, you have a chance to get out now.

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I have just seen this story discussed on The Wright Stuff (channel 5).

Page 2 of today's Times, heading is

" BTL landlords poised to sell 500,000 homes in a year".

http://www.thetimes.co.uk/tto/news/uk/article4681297.ece [PAYWALL]

A presenter on the show told us this is because George Osbourne's crackdown on LL's has bought confidence in BTL to a low point, a study found.

There used to be concessions in stamp duty and mortgage refief, but that is all going to go, she said.

Matthew Wright remarked this is good news for everybody other than BTL LL'S because going on supply and deman, half a million properties pouring onto the market in a year has to have a watering down effect on the housing market, So prices won't rise as much, making them more affordable.

Anothe member of the panel remarked that potentially this would put the wind up international buyers that are flooding London, when they see the market declining, so they will think of to another international city to go and put their dirty money in.

Matthew replied this could be catesptophic news for those BTL LL's who bought an an alternative to having a pension, but as a whole, he can't help but think it is good news.

:D

Edited by Automotive Engineer

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Good reading. Thanks.

~“What happens to the people these landlords house if they still can’t buy and there are fewer and fewer properties available to rent?”

~half a million properties dropping on to the market in a short period could move “the power back into the hands of buyers, and force house price inflation downwards”.

----------

I recall a few of stories about his issues in Primrose Hill in the party forever HPI boom...

2009 And neighbours having one of those fancy basements put in... perhaps one of those icebergs as I think they call them.

http://www.dailymail.co.uk/tvshowbiz/article-1162091/Matthew-Wright-My-life-hell--bed-shakes-I-lie-it.html

Other 2014 (rowdy parties noise) http://www.express.co.uk/celebrity-news/512417/Matthew-Wright-plagued-by-rowdy-parties-in-Primrose-Hill

Other 2015 (different extension) http://www.dailymail.co.uk/news/article-3155121/TV-presenter-Matthew-Wright-opposes-neighbour-s-roof-extension-plans-people-stare-wife-garden.html

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Matthew Wright remarked this is good news for everybody other than BTL LL'S because going on supply and deman, half a million properties pouring onto the market in a year has to have a watering down effect on the housing market, So prices won't rise as much, making them more affordable.

It isnt new supply.

The only thing which may change is the tenure (£800pm rent becomes £800pm mtge or whatever). The properties already exist and will be (mostly) occupied.

In the long run it makes no difference at all to supply. But hey, Matthew Right is obviously an expert.

If 500,000 new properties been built then it would ofc likely be a different outcome.

Edited by R K

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They can't sell the properties anywhere near the price.

The credit restrictions and affordability limits on individuals (who also do not get tax relief on interest) is far too great compared to the credit levels landlords have been using to corner the market.

Same with those 'overseas investors'. Who can they sell to?

Exactly. I'm hopeful things will move along quite quickly after the stamp duty hike kicks in, as the tax relief removal will start to be phased the following tax year ie within a 12 month tenancy agreement period.

Lenders have to start progressively tightening lending criteria on this basis alone imo.

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Won't the existing tenants want first dibs? At the right price of course.

What protections do they have if the property is sold and the new owner wants them moved on. Max 6 Months tenancy?

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Good reading. Thanks.

~“What happens to the people these landlords house if they still can’t buy and there are fewer and fewer properties available to rent?”

~half a million properties dropping on to the market in a short period could move “the power back into the hands of buyers, and force house price inflation downwards”.

----------

No shit. The price would plummet.

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Won't the existing tenants want first dibs? At the right price of course.

What protections do they have if the property is sold and the new owner wants them moved on. Max 6 Months tenancy?

2 months I think

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It isnt new supply.

The only thing which may change is the tenure. The properties already exist and will be (mostly) occupied.

In the long run it makes no difference at all to supply. But hey, Matthew Right is obviously an expert.

Wrightmove.

Prices can crash even without moar and moar newbuild supply. That's all I'm really interested in. Better value. Much better housing value.

And the true supply picture is very warped anyway, Investors. BTLers. Oldies hogging family homes. Property left empty.

They couldn't build faster than yield chasing 0.5% QE HPI party investors can speculate on them anyway. Now things are tightening up, with tighter conditions on offshore company buyers, C24, higher stamp duty BTLers.

http://www.thetimes....f4bb875d204d1d6

Departmental figures show that the vast majority of new housing in the UK since the turn of the millennium has been bought by landlords. Between 2000 and 2012, the private rented sector has accounted for some 2.5 million of the extra homes. Only 400,000 have been bought by occupiers.

Of 2.9m new homes built since 2000, 2.5m (i.e.86%) bought by landlords, 400k by owner-occupiers as home ownership plunges to lowest since 1988.

“Demand is intrinsically linked to affordability, and that’s linked to how much banks are prepared to lend and how much people are prepared to borrow.

Demand for housing is a very flexible thing. Saying something isn’t going to happen because it hasn’t happened yet doesn’t really make any sense. That’s like saying because I haven’t died yet I won’t, but I guess I probably will. And a housing crash is much the same. Something not happening simply makes it more likely that it will, rather than it won’t, if the conditions are in place, and the conditions are in place.

Markets are driven at the margin. They’re driven by people who have to buy or people who have to sell. So when you get to the point when there are people who must sell, and that will come, then prices fall across the board because not many people have to be forced to sell at a low price to push values down.”

No I don't care either what happens to prices after I buy, the only thing that matters is the price I buy at. But then, that's a commonality we often see among posters here vs the rest of them who can only envisage buying in a forever rising market, ignoring the obvious truth that nothing is forever.

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It isnt new supply.

The only thing which may change is the tenure (£800pm rent becomes £800pm mtge or whatever). The properties already exist and will be (mostly) occupied.

In the long run it makes no difference at all to supply. But hey, Matthew Right is obviously an expert.

If 500,000 new properties been built then it would ofc likely be a different outcome.

Quite, but less middlemen should make housing costs lower, nevertheless, one way or another

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It isnt new supply.

The only thing which may change is the tenure (£800pm rent becomes £800pm mtge or whatever). The properties already exist and will be (mostly) occupied.

In the long run it makes no difference at all to supply. But hey, Matthew Right is obviously an expert.

If 500,000 new properties been built then it would ofc likely be a different outcome.

You're forgetting about voids though. From http://www.propertywire.com/news/europe/uk-landlords-void-periods-2015020310111.html the average void is 2.8 weeks - if we assume that's per year (the link doesn't say) then 5.4% of rental properties will be unoccupied at any one time therefore half a million properties moving from rental to OO would increase the effective number of properties by 27,000.

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Great that these issues are being discussed on MSM now. You can almost smell the fear. Bring it on.

I think we slide into the next step - Panic all over.

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Great that these issues are being discussed on MSM now. You can almost smell the fear. Bring it on.

Yes indeed, because as we know, sentiment has such an important influence on the housing market.

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Yes indeed, because as we know, sentiment has such an important influence on the housing market.

Not as much as supply and demand.

In 2002ish, BTL started hovering up most of the smaller houses in the towns that monitor.

FTB could no longer get the finance; BTLers leapt in with IO mortgages.

Since 2007 they have took the majority of the transaction of very low sales volumes.

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Yes, if changes in sentiment are reinforced by some significant price falls, which I would hope might be triggered by BTLers selling up their portfolios and foreign money getting spooked out of PCL, for example. Until such falls, any doubts/fear people might have will be kept in check and people will tend to sit on their hands. It's all about reaching that point of momentum where sentiment and prices fall together in a death spiral, or at "crash cruise speed" (h/t whoever it was on here who coined that idea!?), in my opinion.

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Aren't landlords also now responsible for confirming their tenants have a legal right to be in the UK (right to rent)? Immigration checks all add to the extra hassle of being a LL.

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Not as much as supply and demand.

In 2002ish, BTL started hovering up most of the smaller houses in the towns that monitor.

FTB could no longer get the finance; BTLers leapt in with IO mortgages.

Since 2007 they have took the majority of the transaction of very low sales volumes.

No additional BTL, no excess for migrant labour to snaffle up,

BTL was policy.

So was encouraging as migrant labour as possible whilst telling the population it was likely to be thousands.

Even the unions were in on it, going on foreign recruiting drives to round up more bodies.

As BTL's sell up well see if those same migrants are as keen to stump up the deposits, debt and commit to mortgages that are going to be multiples of those required back home.

BTL's selling up could well improve supply to the FTB market, considerably, as in the past the same BTL demand crippled supply for purchase.

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Aren't landlords also now responsible for confirming their tenants have a legal right to be in the UK (right to rent)? Immigration checks all add to the extra hassle of being a LL.

I believe so, and here in Wales they are required to register. Getting more difficult being a LL all the time.

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What with the tax changes this April and the fact that landlords and agents have until 23 November this year to get trained and licensed here in Wales, I'm going to be watching the situation with great interest.

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It isnt new supply.

The only thing which may change is the tenure (£800pm rent becomes £800pm mtge or whatever). The properties already exist and will be (mostly) occupied.

In the long run it makes no difference at all to supply. But hey, Matthew Right is obviously an expert.

If 500,000 new properties been built then it would ofc likely be a different outcome.

Maybe he means it might be new supply for sale that could make it harder for other vendors to sell?

If an estate has one house for sale now but then 5 BTL's come on the market the original vendor might not be happy, particularly if they undercut his asking price, then chase one another down.

A new buyer could ask for notice to be served to the tenant before completion. The tenant may not then take another rental on, they could move in with someone else or go abroad. Then it could be argued it was new supply for home owners, even though the number of buildings hasn't increased.

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Great that these issues are being discussed on MSM now. You can almost smell the fear. Bring it on.

Yep, the Wright Stuff is real Sheeple pap, just like This Morning. Loose Women etc. when the Crash word hits these sorts of shows you know that something is up.

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