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Burrito

Merryn's Ft Article - Wait Until 2019 If You Want A Buy-To-Let Property

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What pushed George Osborne into announcing pension freedom? Was it a real desire to give people proper control over their financial futures — a libertarian bid to make an ageing population into financially educated independent investors? Was it a desperate attempt to bring forward a little tax revenue to help with his self-imposed fiscal targets? Or was it perhaps a reaction to the hideous effect of low interest rates on retirement incomes?

http://www.ft.com/cms/s/0/de675bce-f751-11e5-803c-d27c7117d132.html

One my favourite parts of FT.com is the comments section.

:D

Edited by moderator and link to original article added.

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One my favourite parts of FT.com is the comments section. This is probably my favourite on this article:

:D

Excellent stuff Burrito. Good find.

For years I have genuinely been scratching my head in - I suppose - utter puzzlement re: BTL. To me the real villains in the piece are the Lenders. To me they must be the biggest bunch of morons there ever were. They have - once again - via dodgy & VERY ill thought out lending - created yet another MASSIVE Pozi Bubble.... Yup - it's just MORE LIAR LOANS propping up a total SCAM.

What is SO sad is -- it's going to bring down a whole load of innocent people when it all unravels... You'd think the powers that be would have learnt their lessons..... But - NOPE - they haven't done so -- YET AGAIN....

I feel nothing but TOTAL DESPAIR. :ph34r::(:unsure:

Edited by eric pebble

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They are giving people what they want Eric.

If you want to find blame, look at every other individual in the market. We are the system. It's an ugly picture/reflection. It's going to require a stomach to see it corrected.

[...]Back in 2011, my parents emailed me to ask what I thought about BTL as an investment. My response led to me being somewhat excommunicated, since it apparently wasn't the affirmation they so badly wanted. I recently found out that they'd weighed up my considered opinion, and promptly gone balls deep with not one but 3 BTLs, so I re-read my email response to them, and IIRC 4/5 of the main points I made 5 years ago are looking very close to being proven correct. I'm taking no credit for that because my points were only rehashes of what I read here. But the fact is, they ignored what now increasingly seems like prescient advice and have 3 BTL hanging round their necks, seemingly oblivious to the fact that when the BTL buyer pool exits the market (if not already) the price point where OO buyers can provide any support is a long way below where they think it is.

It'll be an interesting conversation.

They think, honestly I kid you not that they were providing homes for people.
They had no idea that they were stealing young peoples futures.
GREED clouded their eyes.
Now, they have to join the anti smoking counsellors, the gun shops, the video shops, the petrol station owners. the horse riding harness makers, the sedan chair makers etc. etc. etc.
The World has moved on.

Quote

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?

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It's practically the same here though - that attitude.

Which is outrageous selfishness and complacency and greed on multiple levels and in multiple dimensions.

Entitlement to extremes.

Edited by Venger

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Excellent stuff Burrito. Good find.

For years I have genuinely been scratching my head in - I suppose - utter puzzlement re: BTL. To me the real villains in the piece are the Lenders. To me they must be the biggest bunch of morons there ever were. They have - once again - via dodgy & VERY ill thought out lending - created yet another MASSIVE Pozi Bubble.... Yup - it's just MORE LIAR LOANS propping up a total SCAM.

What is SO sad is -- it's going to bring down a whole load of innocent people when it all unravels... You'd think the powers that be would have learnt their lessons..... But - NOPE - they haven't done so -- YET AGAIN....

I feel nothing but TOTAL DESPAIR. :ph34r::(:unsure:

I can't blame the banks, they need BTL gristle for their grinder. Their attitude makes them ideal.

BTL is fiscal fly paper. Entrapping those of a certain mindset. I remember a conversation once where a colleague announced that her husband's pension lump sum was being put into 'bricks and mortar'. One wag quipped 'faites vos jeux' , place your bets in French. She couldn't understand the need to diversify and treat all advice as sales patter. It emerged that they had 'friends' who had followed that route and were willing to share their inside contact.

A BTL and their money as soon parted.

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The babies are the ones who are finding reasons other than the actual cause. In total denial.

Preferring to point to some abstract system, and 'the banks' - where many young bankers are now renting, and house sharing.

Refusing to accept so many other market participants have taken greedy (and often very reckless) market decisions.

And not pushing back against the forever HPI heads.. they're part of it too, expecting more HPI from when they bought in 1982 - perpetual HPI. It's all of us. The system.

A HPC is coming - is needed, to knock some sense into many complacent and indulgent people. This culture will only learn through hard experience.

Sept 2015 (BTL Tax Relief Change)

If I had any BTL properties, I'd suck it up. I see property as long game.
-----
+1. Its not too late to get in. If I had any money I would. Its a moral outrage that young people are denied house buying opportunities. But they don't vote. They just whine on social media. So f**k em.
-----
^ This. Make money, help your own family. Fook the whining selfie-stick holding iCrap generation. We are replacing them with useful immigrants anyway

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Oz scares me. No recession foir 25 years has bred a cohort of loons.

It's psychologically healthy to get knocked back a bit by reality from time to time. Governments have created a huge amount of psychological poor health by transferring the costs of poor economic decisions from those who made the decisions onto others. They've encouraged the people who made the poor decisions to think they're invincible and life is super easy because they're so clever and talented, and they've made the ones bearing the costs (mainly younger renting workers) think that life is impossibly hard and there's no way to make progress no matter what they do.

Edited by Dorkins

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For years I have genuinely been scratching my head in - I suppose - utter puzzlement re: BTL. To me the real villains in the piece are the Lenders. To me they must be the biggest bunch of morons there ever were. They have - once again - via dodgy & VERY ill thought out lending - created yet another MASSIVE Pozi Bubble.... Yup - it's just MORE LIAR LOANS propping up a total SCAM.

But...but...but...if there is a case of fraud in selling these liar loan mortgages, wont the FCA - or police - soon catch up with them and take action? ;)

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To be fair the most liked comments are pretty accurate:

TB, Norfolk, United Kingdom, 1 year ago

Thank goodness its a 'leading think tank', I mean those average think tanks keep getting it wrong. Three cheers for leading think tanks.


Steve, Glasgow, United Kingdom, 1 year ago

And 200K average salary ?

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I can't blame the banks, they need BTL gristle for their grinder. Their attitude makes them ideal.

BTL is fiscal fly paper. Entrapping those of a certain mindset. I remember a conversation once where a colleague announced that her husband's pension lump sum was being put into 'bricks and mortar'. One wag quipped 'faites vos jeux' , place your bets in French. She couldn't understand the need to diversify and treat all advice as sales patter. It emerged that they had 'friends' who had followed that route and were willing to share their inside contact.

A BTL and their money as soon parted.

Totally Blod. Eventually parted perhaps... after multi-decade malinvested tops out.. it's topped out once, but the QE and the BTLer doubled down. Where we are now.

Minds.. but also hearts. It captures people of a certain heart (HPI and BTL). And that includes highly intelligent people. They are focussed on their own selfish greed alone, and many have gone hard in on the double down. Never enough mad-gainz for them, and wanting to capture Generation Rent. To farm them. Me me me me me. For many hpcers they are, 'The Innocents'.

I want strong banks to handle the HPC. To see the greed devour itself. The 'invincibles' (h/t Dorkins) need to be proven to be vincible. (If it bleeds we can kill it - Predator BTL/HPI greed).

I'm sick to death of the simpleton argument about blaming lenders - and being wilfully blind to the GREED of millions of market participants (and that includes owners who bought in 1982, who expect more HPI... still on fortunes in equity wealth). Blind. Totally blind. Wilfully blind. No mind or stomach to point to where the blame is.

Fools and their money are soon eventually parted after a long protracted period whereby they are unwittingly bled dry by the banks in a market distorting exercise made at the expense of younger generations. That said if they're finally going in for the kill then up the banks! :P

HPCers blame the banks - "everyone's an innocent.. it's the banks."

HPIers and BTLers sat on fortunes of THEIR ponzi HPI ("inflation wipes away debt, small island, not building enough houses, forever HPI, population growth, can't go wrong with property, ladder ladder" yada yada yada) also blame the banks... despite being floated to insane extreme HPI wealth positions.

They can still summon synthetic anger (h/t Dorkins) to direct at the banks, to cover for their own HPI smug/happy positions (and still many of them want more HPI whatever the costs of inflicting it on younger generations). The Big-I-Ams.

Contractor forum post (a rare anti-HPI anti-BTL) poster:

I've lost track of the number of people I know who are sitting on healthy property 'profit' for having done nothing, yet at the same time blame others (mainly bankers) for all today's problems.

The idea that older people don't see their homes as investments is a ridiculous self-serving platitude.

If that were true, the age demographics of landlords wouldn't be what they are, the daily mail wouldn't print the house price of every serial killer and murder victim, and house prices probably wouldn't be an issue.

A big-boy done it and ran away.

You have to be a pretty senior banker to have benefited as much from the Potempkin economy as a middle-class London home owner, but no-one wants to talk about that.

A lot of bankers did benefit, it's just that plenty of other people also benefited and benefited more in many cases.

There are plenty of people who have made more through the housing bubble than they have ever earned in their lives. For landlords and London homeowners or anyone with an inheritance the amounts are similar to lottery wins - hundreds of thousands or millions - largely untaxed.

Those people wanted the banks to inflate the bubble, and they wanted the bailout. They may even be the reason there was a bailout, but none ever holds them responsible.

People love to blame banks for what happened, but millions of people were complicit. Most obviously the banks didn't get any criticism when the damage was actually happening. They only get blamed for stopping it.

Even now the British middle aged middle classes are clamouring to go back to the days when the crisis was still looming, so they can play at being property developers.

According to Rachman, if a 20 year old goes to London in July 2015, this person can replicate Rachman's material gains if he rolls up his sleeves and spits saliva into the palms of his hands and works hard, despite house price growth that has well outstripped wages for years after Rachman's initial house purchase. Maybe this 20 year old just has to work even harder than Rachman's own Herculean efforts. How many hours in a week again? 168? Should be no problem.

What annoys many people is rachman - like many in London - are literally lottery winners. (Being given £1-1.5 million pounds fir nothing can most definitely be classed as a lottery win)

And are not even cashing it in !!

There is also the belief that they are somehow deserving of it - which is ********. Ask any if them to take 10k and make it into the same money in 15 years from now - and 99.9% of them will fail. Simple as that.

Edited by Venger

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Excellent stuff Burrito. Good find.

For years I have genuinely been scratching my head in - I suppose - utter puzzlement re: BTL. To me the real villains in the piece are the Lenders. To me they must be the biggest bunch of morons there ever were. They have - once again - via dodgy & VERY ill thought out lending - created yet another MASSIVE Pozi Bubble.... Yup - it's just MORE LIAR LOANS propping up a total SCAM.

+1

Borrow to let has been let go mad because someone is lending and whether it's been quasi-taxpayer or about-to-be-taxpayers after another bailout is almost irrelevant. The lenders have caused the problem.

People are generally a lot more cautious when it is their own money they are spending.

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Did the lender's drag anyone into the banks.

There were lessons to be learned in 2007-09... HPI bubble and beginnings of HPC.

QE/0.5%/FLS bailout... but that's to help recapitalise the banks.

Greed has doubled down, BTLers, and those investorz have put their own equity positions into it, to handle the coming HPC.

Greed. Up the banks. Bankers are the best.

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Throughout my career, I have had criminals sit in front of me and in most instances they offered attempted to rationalize their behavior. Often, they would use the same excuse the Ritters are using --- they would claim that their wrongful behavior was justified by someone else's wrongful behavior.

Yes, it's the bank's fault that these people had to commit fraud and to live in a million dollar house they're not paying for. It's a tough job, but someone has to do it.

Not one bank held a gun to anybody's head and forced him/her to take on a mortgage s/he could not afford.

I'm sick of people blaming the System for problems with their personal finances. May be if you bother to learn a little math and compounding interests, and read the fine lines a little more carefully before signing, you would be in a better shape. The One Percent didn't force you to sign in the dotted line.

How many people were FORCED go buy homes they couldn't afford? NONE.

How many WILLINGLY bought homes they couldn't afford? More than none.

- reader comment on Washington Post, March 2012

That was then. It's far worse now. People finding excuses for the BTLers as being misled into it; 'advertising' / 'da banks' for investors pushing and falling over themselves to pay mad prices to capture the young and feast on them.

We're going to need strong banks to handle the HPC. Things have changed... MMR, BASEL.

HTB is/was just a misdirection trick to help convince greedy BTLers to double down on BTL - to put all their positions at risk, and allow greed to absorb the HPC.

Ego-HPIers (and many BTLers) will absorb the HPC, lot less so the banks, who will do fresh lending to generations on much lower stable prices, for a healthy and vibrant future economy. We're heading into HPC. Look at the cold turn on the BTLers and their unregulated mortgage. West Brom tracker hike early warning. Sudden change C.24 and the BTLers (those who are aware of it, rather than endless holidays and new cars and still thinking HPI+++) are recoiling from the moves against them. And values are found at the margin. Stamp duty BTL/second-home hike. And more.

Yet many HPCers are going to find it difficult to handle any HPC. They will be pointing to innocence everywhere... "BTLers just wanted some money for retirement" - whining all the way with excuses.. even before it begins. The innocence. Get a stomach.

Edited by Venger

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That was then. It's far worse now. People finding excuses for the BTLers as being misled into it; 'advertising' / 'da banks' for investors pushing and falling over themselves to pay mad prices to capture the young and feast on them.

We're going to need strong banks to handle the HPC. Things have changed... MMR, BASEL.

HTB is/was just a misdirection trick to help convince greedy BTLers to double down on BTL - to put all their positions at risk, and allow greed to absorb the HPC.

Ego-HPIers (and many BTLers) will absorb the HPC, lot less so the banks, who will do fresh lending to generations on much lower stable prices, for a healthy and vibrant future economy. We're heading into HPC. Look at the cold turn on the BTLers and their unregulated mortgage. West Brom tracker hike early warning. Sudden change C.24 and the BTLers (those who are aware of it, rather than endless holidays and new cars and still thinking HPI+++) are recoiling from the moves against them. And values are found at the margin. Stamp duty BTL/second-home hike. And more.

Yet many HPCers are going to find it difficult to handle any HPC. They will be pointing to innocence everywhere... "BTLers just wanted some money for retirement" - whining all the way with excuses.. even before it begins. The innocence. Get a stomach.

without the lenders, there would be no HPI without wage increases.

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Some greedy people have bought homes, at bubble peak prices, with huge mortgages, outbidding others who also 'just want a home' with then having their own HPI++++ spreadsheets.... more excited about prospect of future HPI, than they were about having a family home.

Sound familiar?

And of course, same for so many BTLers. Forever HPI, rent-rolls (never sell up so no CGT)

We are the system. Accept it.

You are your only master said the Buddah. To straighten out the crooked you must first do a more difficult thing; you must straighten yourself.
Edited by Venger

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Taking on debt is about making and keeping promises.

We all of us (mostly) 'just wanted a home'

We all of us (mostly) 'need a pension'. - BTLers that's to you.

Many boomers bought the houses that they'd live in for the rest of their lives, and raise their families in, at the beginning of their working lives, before they had families.

I feel that the kind of laddderism that you're assuming here is part of a perhaps unwitting attempt by society at large to turn a blind eye to the failure of the boomers to build sufficiently to ensure that their children, and pretty soon their children's children, enjoy the access to housing that boomers did nothing to earn but enjoyed nevertheless.

I think the other rather insidious idea lurking in your thinking is that it is somehow a problem if somebody pays too much for a house and ends up stuck in it. When so many hard working young people are totally excluded from even having the option to purchase property expecting any sympathy for people who not only had that option but acted on it is a dog that won't hunt as far as I am concerned.

We cannot have a housing market where there is no downside to paying too much, that way lies madness. If these people paid too much and were relying on calm economic waters forever so that they could build up some equity and trade up, f**k 'em. Houses are for living in. Taking on debt is about making and keeping promises. Some people will have bad luck; we can't protect people from the vagaries of chance, the idea that we can is stupid fantasy. The whole idea of starter homes and ladders strikes me as total boll0cks, cut from the same idiotic cloth as much of the rest of the apparently endemic HPI+++ for-f**king-ever madness

Idlewild also made a great post credit... can't fully recall it... going back to cavemen; really pushes back against the anti-bankers 'bankers to blame for everything' VI.

It's a market. Own your own financial decisions.

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without the lenders, there would be no HPI without wage increases.

Without borrowers willing to borrow hideous amounts in relation to their earnings there would be no HPI without wage increases. It works both ways.

All of these arguments that seek to place the blame entirely with lenders essentially boil down to bankers-should-know better-than-us-mere-mortals.

I don't buy it. Bankers are no better than anybody else. Having higher expectations of them than the populace at large is a one way street to disappointment.

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It's psychologically healthy to get knocked back a bit by reality from time to time. Governments have created a huge amount of psychological poor health by transferring the costs of poor economic decisions from those who made the decisions onto others. They've encouraged the people who made the poor decisions to think they're invincible and life is super easy because they're so clever and talented, and they've made the ones bearing the costs (mainly younger renting workers) think that life is impossibly hard and there's no way to make progress no matter what they do.

+ 1

A culture which does not value its young and presumes that they are somehow less than human - that they lack basic human desires for home, security, family - and should bear the majority of the costs of society with few of the benefits is deeply unhealthy, and ultimately self-destructive.

No fully functioning human adult is so stupid that they can't learn to practice caution if they know that noone else is watching their back, and that the consequences of their poor decisions won't be forced onto those who actually are innocent of making them.

The only way for them to successfully learn that is for them to be allowed to fail. Those who believe that society will always protect them from the consequences of their own actions will always be able to find something so ingeniously foolish and foolhardy that it was not accurately predicted or immediately understood by those who should supposedly be protecting against it.

“A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.” - Douglas Adams, Mostly Harmless

Edited by Neverwhere

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