Btlrs

[Live_in_hope]

Not a dig a BTLrs though I can't see how FTBs are going to ever get on the market (me included)

Main reason is lets say that the housing market does go through a correction, so then we'll see a renewed surge of BTLrs helping once again to push properties up beyond FTBs.

So in my mind the only thing thats going to stop this is the goverment taxing those who choose to purchase a second house

[gruffydd]

Yes but thisn't an issue you see - according to the Labour Party people I know anyway.

[oracle]

Not a dig a BTLrs though I can't see how FTBs are going to ever get on the market (me included)

Main reason is lets say that the housing market does go through a correction, so then we'll see a renewed surge of BTLrs helping once again to push properties up beyond FTBs.

So in my mind the only thing thats going to stop this is the goverment taxing those who choose to purchase a second house

...well if the value of the houses does come down I'd really like to find a lender who will give you a wad of money when you are in negative equity.

it's very likely that when push comes to shove the banks will move to liquidate these BTL's if there is even a sniff of arrears.it's a lot easier to do than with an OO as tenants are usually only on short lease of 6-12 montha anyway.

[abc]

I can see what you are saying but what about the fact that whilst house prices are in decline and BTL's are in negative equity with other properties will they really want to buy more with the risk they would be getting deeper into the mire?!

That doesnt even mention the fact that rental yields would not provide sufficent drive for many landlords to buy more!

IMO

[El_Pirata]

When the crash unfolds, the fallout will be so brutal that the psychology will reverse and instead of "never going down", prices will "never go up." Just like how nobody wanted to touch shares after the stock market crash. Don't underestimate the herd instinct. When people see all their friends making money in property, they want to get in on the act. When they see them getting repossessed or in negative equity with properties they can't sell, they won't touch it with a bargepole. Except the professional investors who have known what they are doing all along.

[MrB]

You're forgetting BTL speculation drove the market up in the first place. It's been keeping the market afloat for the last few years (only 7% of the market is FTBs - who's buying all those flats then??, in 2004 there were 2 BTL mortgages taken out for every new property built)

BTL's panic selling could drive the market through the floor. OO's need a roof over their heads, BTLers bought purely to make money. There are nervous BTLers now 'waiting to see' what the market does, which is a bit stupid really. Panic early enough and they might be OK.

I saw this psychology with shares in 2001/2, when the amateurs took their money out because their investments were hardly worth keeping. They sat through a boom and then a bust and sold because they had nothing to lose!

[teddyboy]

Not a dig a BTLrs though I can't see how FTBs are going to ever get on the market (me included)

Main reason is lets say that the housing market does go through a correction, so then we'll see a renewed surge of BTLrs helping once again to push properties up beyond FTBs.

So in my mind the only thing thats going to stop this is the goverment taxing those who choose to purchase a second house

What you fail to recognise is that the smarter investor realises he is buying a DEPRECIATING ASSET and with HP's coming down then SO WILL RENTS!

It does not make economic sense buying anything that is dropping when it still has further to go.

TB

[frugalista]

Not a dig a BTLrs though I can't see how FTBs are going to ever get on the market (me included)

Main reason is lets say that the housing market does go through a correction, so then we'll see a renewed surge of BTLrs helping once again to push properties up beyond FTBs.

If this does happen, then it's not a true correction. The real bear market will come when no-one wants to do BTL, which will happen eventually as people finally realise there is no longer any money to be made (and possibly a fair bit to be lost). So, there may be a few false corrections before the true crash. Arguably, one could say that we have already had one false correction.

By the time that the property market hits bottom, shares, gold, dinosaur eggs or some other obscure investment we haven't heard of yet will be the "in thing".

frugalista

[Once in a lifetime]

Not a dig a BTLrs though I can't see how FTBs are going to ever get on the market (me included)

Main reason is lets say that the housing market does go through a correction, so then we'll see a renewed surge of BTLrs helping once again to push properties up beyond FTBs.

So in my mind the only thing thats going to stop this is the goverment taxing those who choose to purchase a second house

I used to believe that also. For first time buyers to afford property

business must be kept away from pricing them out!

I’m now thinking that there is a hell of a lot of BTL’s on the market now!

(chain free - magnolia’s etc... ) and we are yet to see our greatest day

the amateur landlord is going to get their ass whipped so goooooood

dot-com will seem like a fairly viable business venture .

Edited January 30, 2006 by burnt before

[undeservingrich]

One of the things most people fail to recognise is the BTL came out about as a result of the last house price crash. Large numbers of home owners needed to move because of employment or family reasons and couldn’t sell their properties because they were in negative equity and the lenders wouldn’t let them sell.

Some friends of mine who now own 5 properties started by renting out their own one bed roomed flat in 1992 and moved in with her parents when they had their first child. As you can imagine it is now portrayed as some grand plan but all their long term friends know is came about because they couldn’t face carrying a baby and buggy up eight flights of stairs.

[AteMoose]

It all depends on rents, IMO they will fall as people move back to there parents on hard times, people will share more, and economic migrants may leave the country, if rents fall with or faster than houseprices BTLers wont be able to jump back in....

[rocket]

folks im new to propoerty and the whole BTL thing so excuse the lack of knowledge. Im interested in buying and renting property over a long term but im not happy to rush into it. Instead i am trying to learn as much as possible. I see you all mentioned that propertys are going to crash but how do you come to this conclusion, also is BTL really a saturated market and how do you know this?

any info is appreciated

[pyewackitt]

Hi Rocket...

I've tried to condence much of what I've learnt from HPC site into an essay explaining the problems - feel free to read and comment on it:

http://www.housepricecrash.co.uk/forum/ind...showtopic=23160

Hope this helps explain the views of many peeps on this site.

- Pye

[Live_in_hope]

Thanks some interesting points made by all, though I think whats clear is that we're still two years off a HPC, theirs still a lot of things that need to happen in the ecomony.

[Tempest]

When the crash unfolds, the fallout will be so brutal that the psychology will reverse and instead of "never going down", prices will "never go up." Just like how nobody wanted to touch shares after the stock market crash. Don't underestimate the herd instinct. When people see all their friends making money in property, they want to get in on the act. When they see them getting repossessed or in negative equity with properties they can't sell, they won't touch it with a bargepole. Except the professional investors who have known what they are doing all along.

One day in the next few years (2-4) when things bottom out people will say you must be absolutely raving mad to BTL. If you aspire to being a landlord that is the time to buy - when noone else wants to. Don't understimate how difficult a decision that will be. You literally could not give away some property in the early to mid nineties. I remember whole terraced streets available for tens of thousands of punds - streets now covered in "executive flat" developments.

Also, don't assume that what has worked for the last 50 years will work always over the next 50. Demographics, energy and global equalisation have profound consequences for us all. It is not all doom and gloom by any means. But things change. If someone told you that one day here (eg due to the reasons I have suggested), there would be a UK property cycle where real prices of property slowly fell year on year and did not increase for 15-20 years would you believe them? No? What if you lived in Tokyo in 1990? That is what will have happened there and noone would have believed you then.

Complacency.

Edited January 30, 2006 by Tempest