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Tempus

Revealed: the full shocking extent of the buy-to-let market collapse

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After they've hoovered up the cheap properties for years, a few months of reverse in BTL is a "shocking collapse" for the Telegraph http://www.telegraph.co.uk/property/house-prices/revealed-extent-buy-to-let-market-collapse/

"The number of properties sold to buy-to-let investors has fallen 63.7pc in the year to November in England and Wales, according to the estate agency Haart, dropping 8.2pc last month alone. In London, the number of such properties sold fell by 40pc. It also reported that the number of landlords registering to buy properties is down 59.2pc annually."

Shocking for the Telegraph to contemplate that a lack of landlords hoovering up all the cheap properties may lead to people being able to afford their own homes. They'll want the Government to step in and reverse the stamp duty and tax changes.

Edited by Tempus

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22 minutes ago, Northern Welsh Midlander said:

Hahahahahahaha

Thats all.

Im saving my laugh for when the LLs own house is repod.

Surpsied its only down ~70%. Frankly, it should have stopped dead.

 

And now, as basel 3 is brought in, the great going bust of Nationwide and the like.

 

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I heard this last night at 1am on LBC. Then got caught up in some by-election results. Didn't sleep until 3.30 and now feel like death.

But great news...

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1 hour ago, Tempus said:

After they've hoovered up the cheap properties for years, a few months of reverse in BTL is a "shocking collapse" for the Telegraph http://www.telegraph.co.uk/property/house-prices/revealed-extent-buy-to-let-market-collapse/

"The number of properties sold to buy-to-let investors has fallen 63.7pc in the year to November in England and Wales, according to the estate agency Haart, dropping 8.2pc last month alone. In London, the number of such properties sold fell by 40pc. It also reported that the number of landlords registering to buy properties is down 59.2pc annually."

Shocking for the Telegraph to contemplate that a lack of landlords hoovering up all the cheap properties may lead to people being able to afford their own homes. They'll want the Government to step in and reverse the stamp duty and tax changes.

What cheap properties?

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A quick look on the MSE forums finds 4 separate threads on the first page alone all started by people looking to get into BTL 

 

(In fairness the majority of the replies were generally negative and urging caution, which is quite a turnaround for what you would have previously seen on there)

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7 minutes ago, iamnumerate said:

What cheap properties?

None.

Mispriced IO BTL loans, which are going to get correctly priced.

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1 hour ago, Tempus said:

"The number of properties sold to buy-to-let investors has fallen 63.7pc in the year to November in England and Wales"

That's including Osborne's stamp duty deadline boom. I'd love to know how the six months to November compares with the same period last year. 90% down?

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1 hour ago, spyguy said:

Im saving my laugh for when the LLs own house is repod.

Surpsied its only down ~70%. Frankly, it should have stopped dead.

 

And now, as basel 3 is brought in, the great going bust of Nationwide and the like.

 

Still lots of idiots out there who don't know about it, don't think it will make much of a difference and are still bullish on property. My BIL is one of them and keeps encouraging my partner to buy another and having digs at me because I'm not going balls deep on the first property I find for sale. Frankly I hope he loses his overleveraged shirt.

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1 hour ago, iamnumerate said:

What cheap properties?

Correct (thanks largely to the BTL mob). 10x times the average local salary for a 1 bed flat ain't cheap. I should have said "the least expensive properties".

Anyway, a brilliant quote about BTL that I shall repost. From June in the aftermath of the Brexit vote:

"I walked through Widnes and Warrington, past huge out-of-town shopping centres and through the wastelands of industrial decay. In Salford, down streets where all the pubs were boarded up and local shops, if you could find them, had brick walls for windows and prison-like metal doors, I found an Airbnb. My host was selling her terraced house. I sat in her living room as the estate agent brought around potential buyers. They were all buy-to-let investors from the south of England, building property portfolios in the poverty, as if this was one giant fire sale.

“Is this a thing now?” I asked the agent.

“It is,” he replied."

 https://www.theguardian.com/commentisfree/2016/jun/27/liverpool-london-brexit-leave-eu-referendum

Edited by Tempus

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If your up front costs are 5% then that is probably the first 15 months gross yield gone. At a  4% yield then voids, agent's fees, delapidations, insurance etc. probably mean the net yield is actually diddly squat.

So it's a capital gains game, that would require quite a long horizon with no guarantees. Remember there is probably a 2% cost when you sell in fees.

Not surprising nobody is buying into a deal like that even if you are only getting 1% on your deposits.

Edited by crashmonitor

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Quote

Days of the buy-to-let landlord are numbered, says Fergus Wilson

Its economist, Bob Pannell, predicts a “fairly substantial” fall in buy-to-let lending in 2017, suggesting that 2015 may turn out to have been “peak buy to let” year.

“We are already at or past the peak for buy-to-let lending,” he says. “We are currently running at around 6,000 new purchases a month using buy-to-let mortgages, compared with 10,000-11,000 in the corresponding period last year. The combination of a tightening in lending criteria and changes to tax relief are the key drivers.”

https://www.theguardian.com/money/2016/dec/09/buy-to-let-landlord-days-numbered-fergus-wilson-tax-changes-mortgage-rules

Still too high, these need to drop like a stone.

Also notice how Fergus is still in the process...

 

Quote

Fergus and his wife Judith bought nearly 1,000 homes in Ashford and Maidstone in Kent, but are now in the process of selling up. 

 

Edited by AvoidDebt

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37 minutes ago, Northern Welsh Midlander said:

Still lots of idiots out there who don't know about it, don't think it will make much of a difference and are still bullish on property. My BIL is one of them and keeps encouraging my partner to buy another and having digs at me because I'm not going balls deep on the first property I find for sale. Frankly I hope he loses his overleveraged shirt.

This week one of the senior guys at work was telling me that property always goes up. And in the next breath he complained about how his daughter can't afford the *deposit* for buying her own place, while completely ignoring the full price. There are a lot of people who only know that property only goes up and they will still believe this regardless of what happens around them.

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2 hours ago, Fudge said:

Where are all the new influx of migrants going to live if the BTL landlords stop buying ?

There is no shortage of overpriced, unsaleable new builds I believe.

Big fish eating devouring small fish.

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Will the tax assault on buy-to-let do anything to help first-time buyers?

George Osborne - who introduced the first tax hit in 2015 - said he wanted to "level the playing field" between the investors and first-time buyers.

How is the tax attack supposed to help first-time buyers?

The rationale behind Mr Osborne's policy is that landlords will buy fewer properties, and some will sell.

This would free up a greater portion of the market for first-time buyers and homeowners, reducing competition and making homes more affordable. 

Edited by rollover

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4 hours ago, goldbug9999 said:

Rare example of a government policy actually achieving what was intended.

 

Bingo

Stamp duty at the top & multiple property, BTL tax changes at the bottom.

Objective 10-20% reduction in prices to create more conservative voters.

But that was without leaving EU, Donald Trump and most likely considering interest rates to stay ultra low.

Add any increate in borrowing and the changes are magnified possibly/hopefully to real crash territory.

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3 hours ago, Tempus said:

Correct (thanks largely to the BTL mob). 10x times the average local salary for a 1 bed flat ain't cheap. I should have said "the least expensive properties".

Anyway, a brilliant quote about BTL that I shall repost. From June in the aftermath of the Brexit vote:

"I walked through Widnes and Warrington, past huge out-of-town shopping centres and through the wastelands of industrial decay. In Salford, down streets where all the pubs were boarded up and local shops, if you could find them, had brick walls for windows and prison-like metal doors, I found an Airbnb. My host was selling her terraced house. I sat in her living room as the estate agent brought around potential buyers. They were all buy-to-let investors from the south of England, building property portfolios in the poverty, as if this was one giant fire sale.

“Is this a thing now?” I asked the agent.

“It is,” he replied."

 https://www.theguardian.com/commentisfree/2016/jun/27/liverpool-london-brexit-leave-eu-referendum

For some reason that reminds me of the scene in The Big Short where they go down to Florida and speak with the mortgage brokers.

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17 minutes ago, mattyboy1973 said:

For some reason that reminds me of the scene in The Big Short where they go down to Florida and speak with the mortgage brokers.

I literally have had people telling me that they have been subsidising their buy to let to the tune of a couple of hundred a month.  The rises are a given to such an extent its like a savings account.

 

 

Edited by Fromage Frais

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