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Landlords offloading flats!

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My rightmove saved search is only for houses, as with 2 kids and nearing 40, I want to (finally!) settle in somewhere with a garden and some space.

So I never look at flat sales on RM ... until today. There are so many 1 and 2 bed flats coming onto the market and being reduced .... has got to be panicking BTL trying to offload? Anyone seeing the same? I'm in BN13 postcode.

Certainly cheered me up as once flats crash, the 2/3 bed houses will start looking very expensive indeed... and will come tumbling after.

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For the last 2 years in my area BTLers have hoovered up just about every 2 bed terrace house that has come on to the market...

A couple of days ago i was very surprised to get a Rightmove alert that consisted of 5 x 2 bed terrace houses, all on the same 2 streets, some tenanted some vacant... quite obviously an LL offloading their "portfolio" (I hate that word, it's so HUTH!)

They're up for auction, so it's not even like they're putting them on for kiteflying prices and prepared to wait indefinitely to find buyers on the open market.

I just hope this is the start of something and not just a one off  freak occurrence

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I think its finally sunk in with some leveraged LLs.

But only a very few.

If a was a cash LLS, all houses owned, Id be shrugging my shoudlers.

If I was a 3+ IO BTLe then Id be sh1tting my pants.

We've only had announcements for the UKGOV changes - PRA, itaxed rent income etc.

You've also got the Basel3 changes turning up, which look horrendous in terms of IO BTL - much higher IRs, no IO mortgages.

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I know three landlords, all three will probably go bust with the new rules. I know this as I have asked about their leverage levels and I know roughly how much they earn.

yet they still have no idea about S24 changes. no idea what it does to their taxable earnings 'that doesn't sound right to me'

what's scary is that between these 3 people they must lay claim to about 30 houses. 

and this his is out of quote a small group of people which I come into contract regularity. 

if this were scaled up around the whole city they own in, then S24 is going to cause a massive fire sale in April 2018. 

even with ke me warning them it's coming, they are still clueless. 

I think it's just to horrible for them to comprehend or process.

i have not seen any tick up in houses for sale, in fact still 40 year lows. 

people get into BTL as their family or mates did well out of it and brag. I suspect those in the know about going bust are not being very loud about it. not much bragging rights in that.

so I think we will see a long slow slope of a bubble continually going up, followed by a deep sharp crash in 2018. 

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I am seeing quite a lot of 'empty homes' coming on the market around Cambridgeshire lately. Most of them are pretty awful inside (surely these are BTL'ers selling up their ex rental properties).

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32 minutes ago, jiltedjen said:

people get into BTL as their family or mates did well out of it and brag. I suspect those in the know about going bust are not being very loud about it. not much bragging rights in that.

It doesn't have to be about bragging rights, if they're half smart they will try to sell before everyone else figures out what's coming.

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I suppose landlords are not the most moral of creatures, happily put theirs up for sale without telling their fellow BTL friends and family to do the same. 

there will 100% be a fire sale April 2018. 

just hope the media really spell it out for them over the next year. 

i think we have hit rock bottom on inventory for sale and peak prices. Volumes should increase and prices should fall from around June onwards. 

Edited by jiltedjen
terrible forum software

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Anyone know how the rightmove market trends are calculated in terms of marketed properties? Does it include those listed as SSTC?

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BTL perhaps only made sense for those buying in the late 90s early 2000s. Anyone who has bought recently have put their head in a noose. The finances never really made sense something lots of people are going to find out to their cost.

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52 minutes ago, hiace_drifter said:

Anyone know how the rightmove market trends are calculated in terms of marketed properties? Does it include those listed as SSTC?

I'd pay very little attention to Rightmove data, given that at least half of my alerts for so called ''new instructions'' are NOT new to market at all, just houses that have been relisted to disguise their history and bump them back up to the top of the listings.

 

They're relisted still with the same EA and without even a price reduction, which I'm not sure how they manage to do as I thought that was construed as fraudulent?

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Purely anecdotal but all the six properties we have half-heartedly viewed post July were landlords selling up. We are looking towards buying with no chain so that might influence that but interesting nonetheless. It is great fun to ask the EA's why the landlords are selling up though! Most say 'oh they just fancy a change of pace' or 'dont want the hassle of tenants anymore'. Since then about half have sold, not sure what prices were achieved yet. Will continue looking in the new year but wont be buying until sentiment really turns downhill and that might take some time! 

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4 hours ago, jiltedjen said:

I suppose landlords are not the most moral of creatures, happily put theirs up for sale without telling their fellow BTL friends and family to do the same. 

there will 100% be a fire sale April 2018. 

just hope the media really spell it out for them over the next year. 

i think we have hit rock bottom on inventory for sale and peak prices. Volumes should increase and prices should fall from around June onwards. 

Things to be aware of:

1) BTLers, mainly IOs, have been the bulk of the buyers since 2002ish.

2) Transaction volume have been at multi years lows since 2005. Really surprising. Every bangs about prices going up but its just a false market.

There's been an unholy trinity of tax credits, IO BTL and EU immigration going on for the last 10 years.

IO BTL LL buys BTL, lets it to EE, who can only work here as they are claiming TCs. LL claims TCs too as they could discount the rent before decalring their income. More EEers come over, more people buy IO BTL to houses them, more TCs claimed to etc etc.

So, youve got to unwind most of the transaction over the last 15 years into a very weak market, where MMR basicailly limits OO to a max of 4 time earnings -after all other expenditure is took out, so a 80K max mortgage for Mr + Mrs UKaverage.

 

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8 hours ago, hiace_drifter said:

My rightmove saved search is only for houses, as with 2 kids and nearing 40, I want to (finally!) settle in somewhere with a garden and some space.

So I never look at flat sales on RM ... until today. There are so many 1 and 2 bed flats coming onto the market and being reduced .... has got to be panicking BTL trying to offload? Anyone seeing the same? I'm in BN13 postcode.

Certainly cheered me up as once flats crash, the 2/3 bed houses will start looking very expensive indeed... and will come tumbling after.

I am seeing a bit of what you are seeing in my area also.

I do also note that recent entrants to the game also bought larger terraces also for HMO /students or the more nefarious purpose of just covering IO mortgages in the hope of capital appreciation.  This covers accidental landlords leveraging these properties to buy ones for 500+K

Its like the new rules where carefully planned out to address areas like mine where there is a high demand for family homes and landlords where buying 3/4 bed terraces for £380k and renting for £1200 (3% return or less).

These folks are loosing money immediately under the new rules and should have sold by now

 

Edited by Fromage Frais

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I've been seeing loads of flats this year that look to be BTLers selling up. A fair few with sitting tenants, quite a lot of empty flats, flats with furniture but otherwise empty, properties marketed as houses but have clearly been used as two flats, flats with no pictures of the inside, flats where the residents haven't bothered tidying up for the photos, some that have Rightmove listings for let since the last sale and a couple that I know were rentals from personal knowledge.  

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9 hours ago, nome said:

For the last 2 years in my area BTLers have hoovered up just about every 2 bed terrace house that has come on to the market...

A couple of days ago i was very surprised to get a Rightmove alert that consisted of 5 x 2 bed terrace houses, all on the same 2 streets, some tenanted some vacant... quite obviously an LL offloading their "portfolio" (I hate that word, it's so HUTH!)

They're up for auction, so it's not even like they're putting them on for kiteflying prices and prepared to wait indefinitely to find buyers on the open market.

I just hope this is the start of something and not just a one off  freak occurrence

Been seeing the same .i`m beginning to wonder if the banks/UKAR have decided to call time on these places /pillocks...the end of the zombies ? i have also heard of a few large companies having the rug pulled from under them of late 

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On 27/11/2016 at 9:49 AM, interestrateripoff said:

BTL perhaps only made sense for those buying in the late 90s early 2000s. Anyone who has bought recently have put their head in a noose. The finances never really made sense something lots of people are going to find out to their cost.

Traditonal LLs used to look for a yield 10%+

And then they needed to put 50%+ cash in.

At a 3% yield, one month void will knock 2.5 years profit.

It does not  take a genius to work out that, at the level of leverage since 2002+, have a high chance of getting wiped out.

 

Edited by spyguy

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58 minutes ago, TheCountOfNowhere said:

Any BTLer with half a brain would have sold up, lock stock and barrel, late last year (2015)

 

I know one who got their first ever BTL 'deal' last year and openly confesses to making £0 from it.

All about the capital gain or holding on to it for the kids.

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36 minutes ago, Noallegiance said:

I know one who got their first ever BTL 'deal' last year and openly confesses to making £0 from it.

All about the capital gain or holding on to it for the kids.

Capital gain only works if you buy a house that's costing 2 or 3 times average earnings and banks are about to increase the amount you can borrow to 3 or 4 times average earnings.

Sadly they've done the exact opposite and bought at 5-6 times average earnings while banks are being told to reduce borrowing amounts to max 3 times average earnings (and believe me I'm being generous there considering the affordability rules)..

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22 hours ago, spyguy said:

MMR basicailly limits OO to a max of 4 time earnings -after all other expenditure is took out, so a 80K max mortgage for Mr + Mrs UKaverage.

 

Isn't that four times household income?

Admittedly 4x joint income would see price come down considerably where I am based.

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On 27/11/2016 at 10:14 AM, nome said:

I'd pay very little attention to Rightmove data, given that at least half of my alerts for so called ''new instructions'' are NOT new to market at all, just houses that have been relisted to disguise their history and bump them back up to the top of the listings.

 

They're relisted still with the same EA and without even a price reduction, which I'm not sure how they manage to do as I thought that was construed as fraudulent?

Have a look on https://twitter.com/HousePriceMania

 

I post some of these to RM Bucks Trading Standards and BBC watchdog ( for a laugh ) 

Rightmove used to come back to me and say they investigated and found no issue with the listings because the agent takes it off RM when SSTC and puts back on when sale falls though.

Me personally, I disagree with their findings.

 

e.g. From today

 

CyVSSu6WIAEmqPx.jpg

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30 minutes ago, rantnrave said:

Isn't that four times household income?

Admittedly 4x joint income would see price come down considerably where I am based.

Yes.

And Yes, it wold bring mortgages down hugely in the South.

Not surprising, as Southern wages are just not that much higher than the North. Although ay the mo, there's more joobs - but that seems to be reversing with the layoffs and automation in banking.

Take Mr +Mrs Mortgage.

He earns 30k, she earns 20k - 50ik household income.

However ... 2 cars each on finance of 8k year. Bump HI t 42K.

Kids in nursery ~@ 4k/year. Bump down to 38k.

Max mortgage ~150k.

And these would be in the to 20% of earners too.

If you want a 300k average house then you need a 120k average household income.

 

 

 

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52 minutes ago, spyguy said:

If you want a 300k average house then you need a 120k average household income.

Not if BTLers and foreign "investors" are buying up all the houses to rent to Mr + Mrs Mortgage

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