Someone Who Loves Graphs And Figures

[Marina]

I would be very interested to see a graph that shows the proportion of property owned by landlords against a timescale of say the last 10 years (no idea where or how you would get the figures).

I would imagine that the graph would be a line which goes up (possibly exponentially (to some extent)) from left to right.

If you extrapolate it, you will see that, at some point in the future, all property is owned by investors. (Obviously they live in some of it and rent the rest out.)

It has become clear to me recently that:

• BTL investors have replaced FTBs.
  
• That the belief that yields don't stack up will not prevent BTL landlords from expanding their portfolios as they believe capital values will rise in the long term
  
• That, as and when prices fall, property as an investment vehicle is now so ingrained into the British psyche, BTL investors will jump back into the market before property becomes affordable to the average FTB
  

The outcome of this is that, regardless of what the market does, a new paradigm really does exist. The BTL investor has now replaced the FTB (a generalization of course, high-earning FTBs will always be able to buy).

This leaves your generation well and truly screwed and, over the next 20 years, a huge proportion of the housing stock will move into the hands of landlords creating a new 'renting forever' class.

The way the housing market has performed over the last 6 months is all the proof I need that the above is true.

If you want to hang on to some dream that ...

One day brothers all men will be able to afford their first property on a 3.5 time mortgage - DO YOU BELIEVE? I can't hear you ... I said 'DO YOU BELIEVE?

One day the BTL investor will perish and vanish from the market like a wart that disappears in the night - DO YOU BELIEVE? WELL? DO YOU BELIEVE MY BROTHERS?

One day my brothers and sisters, interest rates will RISE UP and cut down the BTL investors who will run and hide from the wrath of the currency markets - DO YOU BELIEVE? NEVER MIND that high interest rates will make it more expensive for US TO OWN PROPERTY - that is a PRICE WELL WORTH PAYING TO REMOVE THE BTL PESTILENCE FROM THE LAND

Do you believe that ONE DAY the BTL investor will be driven from the property market like a mangy dog?

Because, I am telling you, my brothers and sisters, if YOU BELIEVE then you BELIEVE in FAIRY TALES.

~~~~~~~~~~~~~~~~~~~~~~~~~

The BTL investor is going nowhere. If Interest Rates do go up, if house prices do fall, if some BTL investors decide to sell their portfolio - ANOTHER INVESTOR WILL APPEAR OUT OF THE SLIME AND STILL PRICE YOU OUT OF THE MARKET.

This is the new market.

This is the new paradigm.

It is different this time.

You are screwed.

You will ACHIEVE ABSOLUTELY NOTHING BY 'DOING YOUR BIT' AND STAYING OUT OF THE MARKET. YOU ARE JUST PLAYING INTO THEIR HANDS.

[no accountant]

You will ACHIEVE ABSOLUTELY NOTHING BY 'DOING YOUR BIT' AND STAYING OUT OF THE MARKET. YOU ARE JUST PLAYING INTO THEIR HANDS.

Perhaps it would be quicker to work your way up in politics and then tax these BTL 'warts' out of existence. The Lib Dems are going this way, and their policies are usually copied by the other two parties.

[Catch22]

FOOKING HELL Marian's starting to shout, he thinks he is the all seeing prophet. What he has seen in the last six months has convinced him this 17 year bull run of the property market is set to run into infinity. Would that be like all past speculative bubbles?Unfortuneatley history indicates all speculative bubbles burst at some point.

Fair do's he could be right though, infinity is out there, and this market is heading towards it, irrispective of affordability. Restrained up ward wage pressures coupled with rampant property inflation, supported by interest rates raising around the world, and UK jobs heading over seas to lower cost areas ...........Just run that one past me again.

Or is it just the case that Marina has bought into the "Suckers Rally" that procceds most market corrections.

Whilst the enlighteened "Batten Down the Hatches" to ride out the coming storm, Marina's out in his dingy exorting all [via his loud hailer] to come join him.

Whilst irrational Lenders and Borrowers may be sharing the same boat, this in it's self does not guarantee unsinkability whilst they bob up and down in the Sea of Debt .

Edited June 13, 2006 by Catch22

[Marina]

FOOKING HELL Marian's starting to shout, he thinks he is the all seeing prophet. What he has seen in the last six months has convinced him this 17 year bull run of the property market is set to run into infinity. Would that be like all past speculative bubbles?Unfortuneatley history indicates all speculative bubbles burst at some point.

He could be right, infinity is out there, and this market is heading towards it, irrispective of affordability. Restrained up ward wage pressures coupled with rampant property inflation, supported by rising interest rates...........Just run that one past me again.

Or is it just the case that Marina has bought into the "Sucker Rally" that procceds most market corrections.

Whilst the enlighteened "Batten Down the Hatches" to ride out the coming storm, Marina's out in his dingy exorting all [via his loud hailer] to come join him.

Whilst irrational Lenders and Borrowers may be sharing the same boat, this in it's self does not guarantee unsinkability whilst they bob up and down in the Sea of Debt .

Funny how people always put a personal slant on things. I have STRed for heaven's sake! I'm not out in a dinghy. I haven't bought into a Sucker's Rally - I haven't bought into anything - I have bought out of the property market.

Believe it or not, I'm not too bothered about it. When my eldest lad finishes his A levels I am either going to move abroad or move somewhere quiet in this dump and buy. It doesn't affect me much either way. I am concerned about my kids and their generation.

And while you lot on here are riding out the storm - you haven't noticed that it hasn't started raining yet. What if it is not a speculative BUBBLE - but just a permanent change in a market caused by speculation?

A while ago I observed that the price of a 3 bed semi somewhere in Leeds went from 32k in 2002 to 110k in 2004. That was a bubble. But, it HASN'T BURST! It should have done but it hasn't. Instead of blindly believing that it will, it might do you some good to consider that it won't burst and a fundamental and permanent change has happened to the market.

10 years ago BTL investment was unusual - most people who owned property had owned it for generations. It might be helpful (to YOU) to think how this is going to affect the market long-term rather than indulging in blind faith.

[Catch22]

Look your the one who shouts at people by using Capitals. I replied to your post and you accuse me of being personal....are you sniffing something for FFS ?

I pointed out you may indeed be right...prices will raise to infinity and beyond. I also pointed out you could be wrong, by questioning that likelyhood when one considers external economic constraints............................I like balance

Anyway I'll vacate this particulare podium, as its apparent Marina is in preaching mode and not listening mode......but hasn't that always been the case

Edited June 13, 2006 by Catch22

[SCUMBAG]

I started a discussion about how I think they will actually cause the market to crash whilst giving the illusion of a rising market here

http://www.housepricecrash.co.uk/forum/ind...showtopic=31541

This is what I posted

The average price of an asset will fall when supply outstrips demand. In the UK housing market is it argued that prices are being held at their high levels because there is a shortage of affordable property and therefore demand is outstripping supply. At the bottom of the property ladder there is a lot of demand from First Time Buyers (FTB) and Buy To Let (BTL) landlords. FTBs are currently at a historically low level of 7.8%. In other markets and in previous property booms the absence of new blood in the market would be seen as a sign that the market is about to fall as this is needed at the bottom to sustain the rest of the chain all the way to the top. Without them, the people on the second rung can not sell and therefore can not buy and this pattern continues up to the top ensuring that chains collapse until there is an oversupply and eventually the only way to sell properties is to drop the price. This situation is further complicated because not only is the bottom rung so far away from the FTB, but the rungs further up the ladder are too far away to allow people to move up. In addition, those lucky FTBs who are on the ladder who paid a high price for their property will have to stay put for longer as it takes longer to erode the true value of the debt in a low inflation environment. The net effect of situation described here leads to stagnation, which leads to the breakdown of chains, which eventually leads to oversupply, which leads to price falls. This is the situation that was evolving in 2004 before the cut in interest rates in August of that year which, it is argued, was enough to keep the situation free wheeling. It is suggested that this is evident that this can be seen on the graph’s home page.

For reasons discussed above the bottom of the housing market is crucial in propping up the rest of the market. Last month the mainstream news reported that the only thing propping up this part of the market was BTL landlords and those FTBs who were being heavily subsidised by their parents. Much is made on this site that the BTL landlord is taking the place of the FTB and so sustaining the market. Over 50% of the BTL properties in existence were purchased in the last 5 years. I propose that the BTL phenomena is not propping up the market but actually contributing to its final demise because they have no intention of moving up the property ladder and so the stagnation described above will be amplified as a result. In the meantime it gives the impression of a healthy, rising market. Additionally they are blocking FTBs from entering the market (who would be looking to move up the ladder in a few years time) as they are in direct competition with them, adding further stress to the future market.

The situation described could happen independently of interest rate rises (although a rapid rise in interest rates would accelerate any market fall or indeed act as a catalyst, as would any rise in unemployment/repossessions which would also lead to oversupply). So whereas rising interest rates and unemployment could lead to a market correction, the market simply buckling under its own weight due to being top heavy must also be taken into consideration.

Edited June 13, 2006 by SCUMBAG

[lypsey]

I think this is what you were after . Try the one entitled "other mortgages"

http://www.in2perspective.com/nr/stats/indices/

Good luck

[Warwickshire Lad]

This is the new market.

This is the new paradigm.

It is different this time.

You are screwed.

Well, thank you Marina for your words of encouragement to young people everywhere.

In the longer term I happen to agree that a higher proportion of property will be private investor hands overall than it was in the past. It will be like this unless the law is changed.

However, forthcoming IR rises will mean that demand for property will plunge and the foolish BTLers will be purged from the market for many years.

This will open a window of opportunity for FTBers although it's unclear how many will be savvy enough to realise that.

At this point, I am optimistic that we will still get our property crash.

To be honest Marina, your postings are sounding slightly odd these days. You used to talk calm sense, and now it seems like you're as high as a kite. Whatever.

[cynic]

"I would be very interested to see a graph that shows the proportion of property owned by landlords against a timescale of say the last 10 years (no idea where or how you would get the figures).

"

I'm sure I saw not so long ago figures from what seemed to be a reliable source - I'll see if I can find it (can't promise success). As I remember it, the figures suggested that over the last 9 (I think) years, the total number of privately rented properties hadn't actually increased very significantly but that these properties had certainly changed hands; the pattern was of a movement from a smaller number of larger portfolio (say 10 properties and upwards) landlords to a very much larger number of smaller BTlers (perhaps 4 properties and fewer). I remember thinking at the time that this alone could have had a significant impact on HPI purely as a result of the pros selling on to the amatuers who were blithely and recklessly bidding up prices.

Don't quote me on the reliablity of these figures, but this was the shape of the picture as I remember it.

[apom]

Nope.. its all about perception..

See investors already loosing money .. see the properties loosing also and..

well. it hasn't been that ingrained before

[munimula]

Perhaps it would be quicker to work your way up in politics and then tax these BTL 'warts' out of existence. The Lib Dems are going this way, and their policies are usually copied by the other two parties.

I'm just fomulating a letter to Vincent Cable of the Lib Dems and my MP. Last time I got a response very quickly. The letter will be along the lines of immigration causing popn growth but restrictive planning preventing decent housing needs being met, the nimbyism effect restricting houses being built, the debt the young are taking on to finance the older generation and the division of society depending on when you were born and bought your first house.

I really liked the Lib Dems move on tax recently, it was one thing that put me off them as I couldn't see any reason to pay more tax but taxing cars and aeroplanes more is a must

And while you lot on here are riding out the storm - you haven't noticed that it hasn't started raining yet.

Interest rates haven't started going up yet.

[cynic]

....it was here in the uk.finance usenet group. The posts are still archived, the original was

http://groups.google.co.uk/group/uk.politi...de=source&hl=en

quote

With 408,300 loans outstanding, buy-to-let now makes up 4% of the

mortgage market.

! Although the total number of rental properties has not increased

significantly since 1998,

the profile of landlords has changed and the quality of property in

the private rental sector

has improved.

! The ODPM’s Private Landlords Survey suggests that the number of

small-scale landlords

has increased, with the average number of properties per landlord

falling from 9 in 1994 to

4 in 2001."

http://www.cml.org.uk/servlet/dycon/zt-cml...adhoc2004-7.pdf

unquote

..sorry, I'm afraid this is very scrappy, the stats are circa july-04 and the CML link no longer works (I wonder why?)..

[Marina]

Nope.. its all about perception..

See investors already loosing money .. see the properties loosing also and..

well. it hasn't been that ingrained before

I find it interesting - I think you are one of the people who most strongly regard BTL investors as deluded etc. You often quote bits about market cycles etc. As though nothing ever changes.

Speculative bubbles burst. Fair enough. Tulips, South Seas, dot com.

But what we see here is not simply a speculative bubble. We see a sea change in the ownership of property. A new paradigm for sure. You cannot point to a time in previous property market cycles when so many people piled into property as an investment.

Are you saying that property as an investment is not ingrained into the British psyche now in a way it never has been before.

If you ignore what is actually happening, and rely on history repeating itself, you, and your generation, will never own their own houses.

Look your the one who shouts at people by using Capitals. I replied to your post and you accuse me of being personal....are you sniffing something for FFS ?

I pointed out you may indeed be right...prices will raise to infinity and beyond. I also pointed out you could be wrong, by questioning that likelyhood when one considers external economic constraints............................I like balance

Anyway I'll vacate this particulare podium, as its apparent Marina is in preaching mode and not listening mode......but hasn't that always been the case

I didn't say you were being personal. I said you interpret what I say in the light of what you think my personal circumstances are.

I never said prices will rise to infinity and beyond. This is typical of the way people on here discourage rational argument.

All I said was there had been and is a big shift in the way property is owned in this country.

That at some point in the future a lot more of the property in this country may be owned by a lot less of the people.

That, if this happens, there will be a new rentier class of people that will never own property.

Maybe all the property will be owned by 30% of the population.

That if the market goes down, BTL will buy back in ahead of FTBs

That is what I said.

I think the way the market is behaving now is indicative of a new resilience in the market - caused by people still buying for BTL.

Now you can all call me names if you want. Who cares about that? Not me.

I do care that my children may become part of this rentier class - unless - unless I become a BTL landlord now and try to provide for their future.

[Bedsprings]

Look don't panic - people who invested for capital growth at the height of the market, regardless of yield will bail out when interest rates rise (as they will) and/or when they see that prices aren't rising. However it will take time for this to work through. People who know what they are doing (ie who buy only when they can get a decent yield) will continue to buy property to let, but not at the prices that prevail currently. A rental property's value is in its yield, ultimately in most cases.

[CrashIsUnderWay]

marina = silly cow.

when she 'turned' probably marked the commencement of the 'capitulation' phase - when the weak-minded just 'want the pain to stop whatever the cost'.

Sad really - but she's wrong, of course.

[dogbox]

The outcome of this is that, regardless of what the market does, a new paradigm really does exist. The BTL investor has now replaced the FTB (a generalization of course, high-earning FTBs will always be able to buy).

Recalling my posts of early 2005 "market shifting back to the Dickensian model, dominated by Landlords".

Even so the returns prospects are not exciting enough for me so Im glad I got out.

[Marina]

Recalling my posts of early 2005 "market shifting back to the Dickensian model, dominated by Landlords".

Even so the returns prospects are not exciting enough for me so Im glad I got out.

Hi Dogbox - so that is two of us that can see what is going on. This generation is stuffed if they don't get off their backsides and do something. Simply staying out of the market has no effect whatsoever as, if they do and prices fall a little, some BTL will step in ahead of them all the time.

I'm just fomulating a letter to Vincent Cable of the Lib Dems and my MP. Last time I got a response very quickly. The letter will be along the lines of immigration causing popn growth but restrictive planning preventing decent housing needs being met, the nimbyism effect restricting houses being built, the debt the young are taking on to finance the older generation and the division of society depending on when you were born and bought your first house.

I really liked the Lib Dems move on tax recently, it was one thing that put me off them as I couldn't see any reason to pay more tax but taxing cars and aeroplanes more is a must

Interest rates haven't started going up yet.

You missed the move from 3.5% to 4.75% and back down to 4.5%?

You missing the fact the Fed seems likely to stop at 5.25%

Missing the fact the pound has gone up against the dollar while, unusually, the dollar rate is above the sterling rate.

[cynic]

This generation is stuffed if they don't get off their backsides and do something. Simply staying out of the market has no effect whatsoever as, if they do and prices fall a little, some BTL will step in ahead of them all the time.

I know I suffer from invisibility both in life and here in this forum - but you seem to have ignored the info I posted which provided BTL growth figures from 1998-2004 - there was no growth just a change of hands...yes I know the link is dead now but I hope you will believe me when I tell you I am not fibbing on these figures.

If BTL did in fact grow post-'04, and it wouldn't suprise me if it did, then why not let's assume that the focus of all this buying was on the new-build dross that, frankly, most here would see the BTL brigade as being perfectly welcome to. When things start to unwind, it doesn't stress the imagination too much to guess how cheaply this stuff will reappear on the market and how quickly that could ricochet across the entire pricing sentiment.

Also you say that as soon as prices start to fall, BTL will hop in there quickly to hoover up all the bargains. On the other hand, if as has been often mooted, HPI unwinds as a result of tightening credit then I suspect BTLers will be the first to be rejected as already too precarious a risk in a falling market.

[Immigrant]

Hi Dogbox - so that is two of us that can see what is going on. This generation is stuffed if they don't get off their backsides and do something. Simply staying out of the market has no effect whatsoever as, if they do and prices fall a little, some BTL will step in ahead of them all the time.

Marina, I think your could be right re a long-term paradigm shift but I still wouldn't rule out a short-term correction.

I think it's unfair though to chide the young FTBs for staying out of the market - what else can they do? They simply can't afford to buy. For most it's not a question of choice any more.

[Marina]

Marina, I think your could be right re a long-term paradigm shift but I still wouldn't rule out a short-term correction.

No, nor would I. The market will, as always, have its hot periods and cool periods.

I think it's unfair though to chide the young FTBs for staying out of the market - what else can they do? They simply can't afford to buy. For most it's not a question of choice any more.

They need chiding! They need to realise that the people on here who keep telling them the market will correct itself and the cycle will take things back to how they were etc are actually wrong.

Here is what else they can do. They need to revolt, protest, raise awareness of the issue - make it clear that, as a generation, they are not prepared to roll over and be turned into a renting forever underclass.

However, from what I read on here, they are a spineless bunch who think that 'not buying' amounts to positive action. For every FTB that does not buy, an investor does. And, as they are priced out of the market, they need to come up with something - soon.

I know I suffer from invisibility both in life and here in this forum - but you seem to have ignored the info I posted which provided BTL growth figures from 1998-2004 - there was no growth just a change of hands...yes I know the link is dead now but I hope you will believe me when I tell you I am not fibbing on these figures.

If BTL did in fact grow post-'04, and it wouldn't suprise me if it did, then why not let's assume that the focus of all this buying was on the new-build dross that, frankly, most here would see the BTL brigade as being perfectly welcome to. When things start to unwind, it doesn't stress the imagination too much to guess how cheaply this stuff will reappear on the market and how quickly that could ricochet across the entire pricing sentiment.

Also you say that as soon as prices start to fall, BTL will hop in there quickly to hoover up all the bargains. On the other hand, if as has been often mooted, HPI unwinds as a result of tightening credit then I suspect BTLers will be the first to be rejected as already too precarious a risk in a falling market.

Sorry, I did not see your post - but you say the link is dead? I have to react with incredulity if you say BTL did not increase in that period. I know loads of people who went from no BTL to owning anything between 1 and 4 BTLs during that period.

With regard to risk - in any market a BTL requiring a 85% mortgage will be seen as a better risk than a FTB needing a 95% mortgage.

[Casual Observer]

The outcome of this is that, regardless of what the market does, a new paradigm really does exist. The BTL investor has now replaced the FTB (a generalization of course, high-earning FTBs will always be able to buy).

This leaves your generation well and truly screwed and, over the next 20 years, a huge proportion of the housing stock will move into the hands of landlords creating a new 'renting forever' class.

I strongly disagree. No government will allow levels of owner occupation to fall. It has risen every year since records began, and no party will want to preside over falling levels without taking action to prevent it.

[cynic]

Sorry, I did not see your post - but you say the link is dead? I have to react with incredulity if you say BTL did not increase in that period. I know loads of people who went from no BTL to owning anything between 1 and 4 BTLs during that period.

And that possibility was fully explained

There was a transfer of properties from those holding large portfolios to those holding none at all.

It shouldn't be a difficult concept to grasp.

[onionpie]

The BTL investor is going nowhere. If Interest Rates do go up, if house prices do fall, if some BTL investors decide to sell their portfolio - ANOTHER INVESTOR WILL APPEAR OUT OF THE SLIME AND STILL PRICE YOU OUT OF THE MARKET.

This is the new market.

This is the new paradigm.

It is different this time.

You are screwed.

You will ACHIEVE ABSOLUTELY NOTHING BY 'DOING YOUR BIT' AND STAYING OUT OF THE MARKET. YOU ARE JUST PLAYING INTO THEIR HANDS.

The BTL investor provides a service to people who want to rent and don't want to buy. Sadly today's BTL investors are going to get screwed because the clever money has already left the market. If you draw a graph of size of BTL portfolio against time, that will have fallen significantly as the pros have left, and amateurs have replaced them.

[Marina]

The BTL investor provides a service to people who want to rent and don't want to buy. Sadly today's BTL investors are going to get screwed because the clever money has already left the market. If you draw a graph of size of BTL portfolio against time, that will have fallen significantly as the pros have left, and amateurs have replaced them.

You're in cloud cuckoo land. Pros have left! Don't make me laugh. There are more joining in every day - and many pros expand their portfolios on the dips.

The point is, the fact is, money is still entering the market at a rate to keep prices moving up in many parts of the country. Whether this money is clever or not is academic. It is there, it is not coming from FTBs, and it is part of a structural change in the housing market. This decade will be looked back on in 20 years time as the decade that saw the birth and establishment of a new renting underclass - priced out of any hope of ever owning their own property.

When you are still renting when you are my age, perhaps you'll think 'maybe we should have got off our backsides and rebelled against what was going on ... but we all thought the market would correct by itself, even when the evidence in front of us all the time proved that the nature of the market was changing.'

[cynic]

With regard to risk - in any market a BTL requiring a 85% mortgage will be seen as a better risk than a FTB needing a 95% mortgage.

(...apologies, I missed this..)

Will that still apply when the BTL's 15% 'deposit' is based on the equity in a second mortagaged property which in a falling market could well disappear? Not to mention some of the more ambitious or even fraudulent LTVs that seem to have been available.