The greatest thread of all...The BTL running for the exit thread

[spyguy]

16 hours ago, Shy Ted said:

When mug BTLers collide. Either end of a terrace racing to get out:

 

http://www.rightmove.co.uk/property-for-sale/property-73726127.html

 

http://www.rightmove.co.uk/property-for-sale/property-65531275.html

 

The issue here is that IO (2002-2014ish) and IO BTL have distorted the the house prices and transactions that no-one has a good idea of where prices hsould be.

Me? MMR is going to be a brtal adjustment, even in nominally high wages places like Sunningdale where Id doubt the median wage is much higher than 35k.

Combine MMR with the decimation of financial sector jobs and London/Se is in deep sh1t.

 

[Timbuk3]

https://amp.theguardian.com/money/2018/jun/09/renting-bills-tenants. 

No room to raise rents.

[Neverwhere]

1 hour ago, Timbuk3 said:

https://amp.theguardian.com/money/2018/jun/09/renting-bills-tenants. 

No room to raise rents.

Good article.

BTLers banking on rent rises to bail them out may find that they end up running for the exit too late, instead of not running for it at all.

I can't find the Nationwide analysis it's based on but would be interested to see it if anyone tracks it down?

Quote

Yet shocking figures from Nationwide reveal that a third of people privately renting in the UK – that army of workers paying off the mortgages of other, richer, people – have just £23 left to spend each week.

Nationwide’s analysis of the private rental market blows the whistle on the ludicrous claim from buy-to-let merchants that people choose to rent and that they enjoy a jaunty iPhone-and-avocado-on-toast lifestyle.

The bald truth is that just 6% of renters like the flexibility of being a tenant. Most people are renting for one reason – high house prices leave them with no alternative.

 

[FabulousSophie]

6 minutes ago, Neverwhere said:

Good article.

BTLers banking on rent rises to bail them out may find that they end up running for the exit too late, instead of not running for it at all.

I can't find the Nationwide analysis it's based on but would be interested to see it if anyone tracks it down?

 

I think the Halifax's latest index says rents are not rising, or barely rising. The BTL *rents will only rise* holdouts must be starting to wonder if their strategy is failing, and indeed wondering whether belatedly to come to the decision to sell. I expect a lot of these holdouts are probably facing ruin, any which way, unless they can get rents to rise.

[maverick73]

42 minutes ago, FabulousSophie said:

I think the Halifax's latest index says rents are not rising, or barely rising. The BTL *rents will only rise* holdouts must be starting to wonder if their strategy is failing, and indeed wondering whether belatedly to come to the decision to sell. I expect a lot of these holdouts are probably facing ruin, any which way, unless they can get rents to rise.

I think BTL stands for Buy To Lose ?

Edited June 9, 2018 by maverick73

[Bland Unsight]

38 minutes ago, FabulousSophie said:

I think the Halifax's latest index says rents are not rising, or barely rising. The BTL *rents will only rise* holdouts must be starting to wonder if their strategy is failing, and indeed wondering whether belatedly to come to the decision to sell. I expect a lot of these holdouts are probably facing ruin, any which way, unless they can get rents to rise.

Finding some bizarre 'argument' to support the belief that rents will rise sufficiently to bail out the most overleveraged chancer is not a strategy, it is at best an ad hoc rationalisation employed to justify a previously existing 'strategy' (a bloody minded refusal to sell up unless forced to sell up). I'm pretty sceptical about the merits of aggrandising bloody mindedness to the level of "strategy".

I think that 'jack up the rents, innit' fantasy is also a means by which those trapped by leverage and latent CGT charges are keeping their sh!t together whilst they wait events to put them out of their misery. In cases like that what you call a strategy I'd call a coping mechanism; it could described as a delusion.

[Bland Unsight]

47 minutes ago, FabulousSophie said:

I think the Halifax's latest index says rents are not rising, or barely rising. The BTL *rents will only rise* holdouts must be starting to wonder if their strategy is failing, and indeed wondering whether belatedly to come to the decision to sell. I expect a lot of these holdouts are probably facing ruin, any which way, unless they can get rents to rise.

The Halifax index doesn't cover rents.

The press release which accompanies it usually summarises information drawn from other sources (they cite the sources) but those statistics usually have a focus on transaction related indicators (e.g. whole market mortgage approval volumes from the Bank of England or instructions statistics from RICS).

The most recent release never mentions rents (link).

 

[Neverwhere]

15 minutes ago, Jurassic Bland said:

I think that 'jack up the rents, innit' fantasy is also a means by which those trapped by leverage and latent CGT charges are keeping their sh!t together whilst they wait events to put them out of their misery. In cases like that what you call a strategy I'd call a coping mechanism; it could described as a delusion.

That seems very likely.

It's essentially just a reaction against their own failure to have put any kind of exit strategy in place.

[Guest]

2 hours ago, Neverwhere said:

Good article.

BTLers banking on rent rises to bail them out may find that they end up running for the exit too late, instead of not running for it at all.

I can't find the Nationwide analysis it's based on but would be interested to see it if anyone tracks it down?

 

At some point at least a few MP's with a moral compass are going to suss the fact how immoral the BTL market is. In the last 15 years they have created a highly speculative business where many are now  working with small or no profit margins, so they now think it is their God given right to squeeze the tenant because of their poor business acumen.

Talk about the emperor with no clothes, can none of them see this.

[Bearly Audible]

"The bald truth is that just 6% of renters like the flexibility of being a tenant. Most people are renting for one reason – high house prices leave them with no alternative."

That there is the real dynamite. Imagine how this dynamic plays out as prices drift down from their peaks and home ownership starts coming into range for more and more of the 94%. Quite the vicious circle for leveraged BTL

[Bland Unsight]

1 hour ago, Neverwhere said:

That seems very likely.

It's essentially just a reaction against their own failure to have put any kind of exit strategy in place.

It's the over-leveraged buy-to-let 'No strategy' strategy

[winkie]

2 hours ago, maverick73 said:

I think BTL stands for Buy To Lose ?

Buy to Bet.......'middle men'......bet on the incomes of others, and the prosperity of the local economy, take a cut to pass difference onto others including the lenders and tax men, agents and decorators/handymen....?

[hotblack42]

31 minutes ago, winkie said:

Buy to Bet.......'middle men'......bet on the incomes of others, and the prosperity of the local economy, take a cut to pass difference onto others including the lenders and tax men, agents and decorators/handymen....?

There doesn't seem to be any risk management in most BTLs thinking. They carry almost all the risk if the business case fails. A few do get it, like a friend who cashed in his 2 BTLs in 2015. But most of them seem to be clueless or deluded. I can't fathom why they base their ideas what mates say rather than do research (free) & get professional advice (costly but could prevent bankruptcy or worse).

[hotblack42]

1 minute ago, hotblack42 said:

There doesn't seem to be any risk management in most BTLs thinking. They carry almost all the risk..

Just to add - I really hope the lenders & agents provided good advice in writing. It would be horrendous to see these muppets bailed out by misselling claims.

[spyguy]

3 hours ago, maverick73 said:

I think BTL stands for Buy To Lose ?

Was

Bailedout To Leach.

Now

Blowing Tramps Ling

 

[spyguy]

2 minutes ago, fru-gal said:

I doubt that the bankers/Government/ptb would allow hpi to find its natural price ie. let it find an equilibrium without intervention. If they see house prices falling too much they will change the rules of MMR so that it is something ridiculous like 10x dual income to "allow first time buyers onto the ladder".

Theres no ptb.

Banks have had their balls cut off.

 

[Neverwhere]

3 hours ago, inbruges said:

At some point at least a few MP's with a moral compass are going to suss the fact how immoral the BTL market is. In the last 15 years they have created a highly speculative business where many are now  working with small or no profit margins, so they now think it is their God given right to squeeze the tenant because of their poor business acumen.

Talk about the emperor with no clothes, can none of them see this.

Some of them get it 

On 13/11/2016 at 17:06, Lavalas said:

Kenneth Clarke sends BTLer packing (again)...

https://www.property118.com/budget-2015-landlords-reactions/76164/comment-page-912/#comment-83477

Quote

I promised to report back when I had met with Kenneth Clarke which happened yesterday. Prior to the meeting he had been sent the tenant tax circular, a letter from me countering his initial warning letter that stated that he “was not instinctively in favour of providing tax relief on any interest debt!”
I also sent him Ross’s report in full and a full on 8 page document as to how my partner and I would be affected differently (we have 8 X 50:50 BTL properties and I have 3 in my sole name. Her part time teachers’ income is £6,000 less than my retirement income). I made strong reference to our tenant’s positions, emphasis the duration of tenure, with examples of duration min the 5 -10 yr. bracket. I have offered to sell to some and they have declined the offer.
He was running late in a busier than usual surgery. I have had occasion to visit before and learned that it is tricky to get your point across because he appears to do more talking than listening.
This time was just as frustrating!!
I started by asking if he had read our correspondence which included Ross’s report in full and he stated he had. His secretary had suggested he should look at it. He said he had read it the night before, normally preferred to read a book, but was used to having to sort out red boxes etc.
He had read everything prior to all participants in today’s surgery and ours was the most voluminous. A not surprisingly disarming open gambit! It became apparent that any scan reading he might have attempted did not acquaint him with many of our arguments.
Hard to get a word in edge- ways. He is a master politician with 2 law degrees from Cambridge, ministerial posts as Chancellor, health minister, Justice minister e.t.c. and has had his hat in the ring for P.M. Recently he has written his memoirs.
So in the limited time available he significantly said that:
I have read all the correspondence, but of course I don’t agree with it but it is a good Lobby.
I will follow the debate but at present I don’t think many M.Ps are picking up on this as a problem.
There is little chance of it being reversed in the Commons. I have no idea what the labour party think about it but they will not back your position. BTL landlords are preventing 1st time buyers from buying homes and that is a real social issue. (Stern confronting look).
This whole BTL thing has been gathering momentum for far too long. It should have been stopped long ago and George has sorted it. It is not the only reason that house prices have gone out of control but it is a contributing factor which needed to be addressed.
In the limited time available we came to our plight. After 11 yrs of hard work, setting up our portfolio under GAAP, we are to be robbed of £170K carry forward losses, spent to revitalise poor standard properties, now forced to sell to avoid bankruptcy at a time when our exit strategy is being dictated by the government and feel justifiably robbed. Reply, nothing but a noticeable wry smile.
I managed to say (after he had offered nothing) that our problems and our tenant’s problems would evaporate if this legislation simply became prospective and not retro-active! That seemed to penetrate, and he wrote something down in his notes.
As I said we would give it our best shot, and did. I came away disappointed but not surprised and went straight to a local pub for lunch and liquid refreshment.

 

[mrtickle]

Yes. I love reading that back. Got a lot of time for Ken.

"Stern confronting look."

 

 

[Bland Unsight]

5 hours ago, fru-gal said:

Really? In what way? Haven't we just bailed out (at a huge loss) RBS?

We didn't bail out the banks, we bailed out the people who had lent money to the banks.

The people who 'owned' the banks (i.e. the shareholders) lost their shirts in 2008.

The cost we are recognising today as we sell our equity interest in RBS is the cost of bailing out the bank's creditors (which is a cost that could - and arguably should - have been imposed on its creditors). Some of those creditors were UK retail deposits, i.e. the government bailed out people with savings.

Hence in response to your original question, no and no.

Nobody was "just bailed out", the bailout happened a decade ago. And no, the people who were bailed out cannot be accurately described as the "bank". RBS went bust; the people who owned RBS were wiped out. The people who were bailed out were investors who lent money to RBS so that RBS could lend money to any idiot who wanted to borrow.

These distinctions really matter. The way in which public policy protects people who deposit money in banks is a big part of the house price puzzle.

Edited June 9, 2018 by Jurassic Bland

[Mossie]

I was within the DPS limit on savings.  Wasn't invested in stockmarket.  Was positioned against house prices that had trebled.  Saving in a bank was safer than putting it under bed at a landlord's property.   Who are these people you imagine were bailed out on the saver side. 

The shareholders fully deserved to get wiped out.  They were taking that risk.  What's the problem.  They took the risk with their capital in shares of banks.

The problem here definitely was not TOO MUCH HELD BY SAVERS in the UK banking system!!!   The problem was all the people addicted to a Labour started runaway housing bubble and of no-more-bust and HPI to extreme to extreme, and of 3 houses for me, or 5 houses for me, and RENTING FOR YOU.

The bailout didn't protect me as a saver and a renter, against house prices trebling in such a short time from 2000 to 2007.

All the £Trillions are in the house prices, and the bailout protected those values, together with commercial property.  Put a stop under things.  For homeowners, for banks, for those with business real-estate interests. 

Soon thereafter came more HPI and more HPI still for years and years, during a time people, including home wealthy, kept blaming the banks for everything.  Easier to blame banks and seek policy measures, than to accept drop in value of their homes.

The bailout protected the values of many other business interests.  It held up land prices and property values.  It maintained values of many other companies including the big developers in my opinion, with HTB just adding more of it, and BTLers getting another big fill of being 'shrewd' and telling everyone how clever and rich they are over scum tenants who don't understand property.

And QE has created other bubbles with run off into highly speculative things like bitcoin and its gaggle of cousins.   Then valuations of other companies in tech.  Then more property speculation and people wanting higher prices, getting higher prices.  Wanting it to be worth more.

The bailout also allows you to go around calling some BTLers as 'shrewd' !!  and for you and others make out newer BTL investors are less able to know what they are doing, as the smart BTLers  'sell' on sweet things about BTL.   If your BTL chums are so stupid to believe what some 118ers say about BTL being best investment for long term, or whatever, then they deserve to be parted with their money if things turn down.  They have a choice, and if they chose BTL, it's all on them, the S21 serving all about the rent and capital growth people some are very concerned about.

Anyone buying to property to rent out to others knows exactly what they are doing, including your own BTL chum landlords.  If things ever turn down for them, they only have to look at their own investment with debt choices in a market of very high prices and Generation Rent.  There really is nothing they can blame it on apart from themselves.  If they have to sell their own home and BTLs, to become a renter, that's life, and the life they wanted to have others in.   What other answer is there?   Some here thought prices had topped out in 2013 but HTB and other measures, including another dose of QE, seen prices double again in quite a few areas, along with more eager BTL activity.

And yet some here say 'Oh the pain for everyone' when it finally turns down.  If it ever does.  That c-r-a-p nonsense has been said for 10 years and more, as house prices doubled again, and it being an SUV party time out there, with millions of people in great financial shape, and a lot of it due to bailout policies.  Oh the pain of £400,000 and £2 million pound houses owned outright in a HPC that must come one day.  The renters and the young have been soaked to protect gains.

HPCers don't seem to be bringing many BTL forum posts over to HPC forum.

They're not all bigging up BTL to try and sell it to new BTL investors 'who aren't responsible for anything they do with BTL' and some of those who still say BTL 4ever really believe it.

Landlord Pride March https://www.propertytribes.com/opinion-market-becoming-more-unforgiving-t-127633199.html

[Mossie]

Quote

 

Mark Alexander

2 hours ago

Hi John

I have been selling properties tenanted over the last few years at full market value. One already sold this year and a second is under contract. Believe it or not, investors are still buying!

https://www.property118.com/reits-viable-exit-strategy-uk-landlords/comment-page-5/#comment-102390

Mark Alexander 

6 days ago

I voted impostor.

In my opinion he’s probably one of the “three dozen morons” I wrote about last year - see link below

 

He's got a point with years of posts about 'the great pain coming that everyone will have to take', when it's been a joyful time for so many homeowners who are mega wealthy, and the bailout protecting value of their home from 2009, and seeing it double and treble again in some areas into 2018.

Spare me the great pain, and the BTLers as the bankers stooges.  Many BTLers have enjoyed a two decade great run at total expense of many other people, with everything stacked in their favour, including bailout measures.  To think we had another run of BTL from 2009 onwards, thanks in part to all the forbearance and the big kitten eyes from both very wealthy homeowners, and renters unable to see other people capable of making a market decision, that banks to blame for everything. 10s of millions of people apparently in need of some self-chosen wise ones to guide them with every decision, and that they all doing it wrong, with banks to blame for everything in property.

The bank bailout and QE has gone into supporting and boosting house prices against those who don't own any of it.  And there hasn't been any great pain for many on the owning side.   If at any point it does get HPC, then this time it should be allowed to be HPC, instead of again claiming pain of the owners and BTLers as in need of being told they've been scammed or something, when they certainly have not.   If the homeowners are so worried, they can bring more houses to try and sell at these prices.  So can any of any HPCers BTL chums.  If any BTLers turn up here during a HPC to blame the banks for losses, then they won't get any hugs from me.  And they didn't turn up here in 2008 anyway.  The BTLers have loads of their own BTL forums, and many of them seemed reluctant to speak about any troubles they experienced in 2008 - 2009, alother there were a few news articles of BTLers all blaming banks for their troubles.  I want to read BTLers in trouble too, and hope to find it on the BTL forums.  If they come here, I will likely roast them when they are passing off blame onto others, if it's clear it's all on them.  

There was this guy in 2015 telling of his former glories, but even he seemed back at the housing speculation again, in bank bailout QE and BTL more and more AGAIN.

https://www.propertytribes.com/the-classic-overstretching-tale-of-caution-story-t-14411.html

[Mossie]

HPC as a safe-space forum for future in financial distress BTL landlords.  I refuse to obey anyone who wants to make HPC forum go that way and will post as I see fit if any in distress BTLer ever turns up here.  At the moment it's just very very high house prices, and many family and friends trapped in rental sector, and one run by too many braggart BTLers.   And with some who claim it's not really a bubble cause "I can move to Hull and afford to buy there."

With HPCers supposed to spend their time and energies looking for a reason the BTLer has been duped into BTL?

Actually a few BTLers did turn up in 2008, but only to brag and defend their positions as active BTL investors.

And many more BTLers did come to talk down to HPCers, to discourage us from having hope in a proper correction - and they got their way with bank bailout and QE and so many other Government measures to stop 'suffering' of those who didn't know anything on the owner and BTL side of the market, and participants from every section of the market, including very wealthy homeowners who didn't want to see their gains lost, and even renters who were convinced that owners had no minds of their own to buy or to hold or to sell, piling in that banks alone to blame for it all.  

10 years later, if there is any HPC coming, it's not all that BTLers have been duped.  Your shrewd BTLers vs your dumb BTLers.. all BTLers and if any of them find themselves in financial difficulties, it's all on them.  They're quite happy to serve S21s on tenants who can't meet the rent.

On 26/10/2008 at 08:03, sleepwello'nights said:

I purchased some properties to rent out a few years ago. Yes I am a buy to let landlord.

I am amazed at some of the resentful emotions expressed by some contributors, obviously tenants. When I was a child my family and lots of others lived in rented council accommodation. But then the general economic environment was socialism and moving more and more towards the now discredited communist system. You can guess that I don't like state control. As I recall we could not even decorate the house, redecoration was done by the council on their schedule. As I recall we could choose from one of a few wallpaper patterns for the sitting room.

If I and others like me did not provide the housing that is available for you to rent who would pay and provide it for it? And if you answer the state, think where will they get the capital from?

Whether you rent or buy is a rational decision you choose to make. If you can afford to and you think it will benefit you you will buy. If you can't afford to or you think it is in your best interests to rent you will rent. It's the same decision process we use whenever we make a decision on how to utilise our resources. Whether its the purchase of supermarket own brand or a premium product, a secondhand car or a new car, whether you stay in and watch TV or go out and pay for your seat at the Cinema. Your money your choice.

The arithmetic of BTL is not currently very favourable, but I purchased in the expectation that rents would rise in line with average wages over the medium to long term. As a business it would provide a steady income stream and hopefully some capital appreciation if I sold the house.

I know I treat my tenants well and afford them the respect they deserve as individuals. The houses I let are relatively new, they are all well maintained, repairs are carried out promptly and I comply with all the statutory regulations that exist and are being introduced at an ever increasing rate.

Why do I deserve your opprobrium?

 

[elephant]

That was a most spectacular rant!!  Bravo!!

[BorrowToLeech]

8 hours ago, Jurassic Bland said:

We didn't bail out the banks, we bailed out the people who had lent money to the banks.

The people who 'owned' the banks (i.e. the shareholders) lost their shirts in 2008.

The cost we are recognising today as we sell our equity interest in RBS is the cost of bailing out the bank's creditors (which is a cost that could - and arguably should - have been imposed on its creditors). Some of those creditors were UK retail deposits, i.e. the government bailed out people with savings.

Hence in response to your original question, no and no.

Nobody was "just bailed out", the bailout happened a decade ago. And no, the people who were bailed out cannot be accurately described as the "bank". RBS went bust; the people who owned RBS were wiped out. The people who were bailed out were investors who lent money to RBS so that RBS could lend money to any idiot who wanted to borrow.

These distinctions really matter. The way in which public policy protects people who deposit money in banks is a big part of the house price puzzle.

The banks still exist. They were bailed out.  

Its true that savers were also protected, but you can’t overlook the deliberate continuation of businesses that had nearly brought down the economy.  

Nor can you ignore that savings were and are explicitly guaranteed. Savers pay for that risk reduction.  

Other lenders explicitly took higher risks, to gain higher rewards, and then ran away from the consequences.

More importantly, and here you are dead wrong, the bailout did not ‘happen a decade ago’.

The bailout certainly lasted for years, and is arguably ongoing. 

QE ended less than 5 years ago in the US, six in the U.K. (if you overlook the brexit QE shenanigans).

Funding for lending also ended this year, and the (not in any way the same) term funding scheme didn’t even start until 2016 and doesn’t end until, what, 2022?

Interest rates are still being artificially suppressed to keep zombie mortgages from collapsing.

 

[Mossie]

6 hours ago, elephant said:

That was a most spectacular rant!!  Bravo!!

You claim rant, I claim serving up some reality.

I guess some of it is from those who either were asleep to all the BTL and house price ultra acceleration issues from 2000 to 2008, or spent lives thinking those years were the wonder-years from the then powers that be.   

It's like the 2000 to 2008 years where house priced doubled and trebled passed them by, and so did events of 2008-2010 as they actually happened.  

So despite the wider bailout for homeowners and BTLers, and another house price doubling and trebling in many areas, and hundreds of thousands of more homes taken by more BTLers, they have no real point of reference.  

Turning up very very very late to review the issues that have built up yet again, and then taking it upon themselves to think no one knows quite as much as them, despite as much as 20 years of being in the wrong on just about everything about housing and house prices.

And still totally in the wrong despite it all, with view that bankers and other BTLers lure 'less capable' people into paying high prices for houses or more BTLs.

It's the buyers and the BTLers own choice, and can't be passed off onto the banks as entirely to blame.   Savers to blame?  Savers didn't take the haircut?   It's homeowners and BTLers, other speculators and many other vested-interests including the major developers who have gained spectacularly from stimulus and reflation QE and FLS type policies.

It's why I like the occasional flutter on the horses.   I like to do things where I haven't got people on my back claiming that I don't know enough to make any choice in life, and that I need to be bossed about by them, despite many of them being in wrong about housing for as long as 20 years.

It's not everyone suffers in a HPC.  BTL chum landlords needing to find out who is to blame if the market finds them out?  They made their own rentier adult choices!