Jump to content
House Price Crash Forum
Marina

Btl Lemmings Go Bonkers

Recommended Posts

Taken from the news feed bit on the home page of this site ....

"BTL Lemmings go Bonkers

Landlord lending leaps to record levels

Buy-to-let borrowing set new records in the first half of the year, with lenders advancing 152,500 loans, worth £17.5 billion. Incredible!!"

What a truly bizarre interpretation. The most important bit of that is that lenders advanced 152,500 BTL loans in six months.

Given that most BTLetters buy properties that would normally be bought by FTBs - it means that 300,000 properties a year are not available for FTBs to buy.

While you're sleeping here ... waiting for the big crash - 300,000 properties a year are, effectively, being taken out of the market.

But instead of focusing on this - you just decide that they are all BTL lemmings. Well it's been in full swing for some years now - and most FTBs are priced out of the market.

In 10 years time 3 MILLION more properties will be owned by BTL.

We will then have a fully formed HAVE (property) and HAVE NOT (rent forever) society. I guess your only hope then will be to lobby for a change to Shorthold Assured Tenancies to try to get some long term stability.

You're all fiddling while Rome burns.

Share this post


Link to post
Share on other sites

That's 300,000 properties that will be the first to be offloaded when IR rise and capital gains stall. You don't have to feel guilty when you buy a repo off a late entrant into the BTL game.

As for 3 million BTL properties in 10 years?? on 5% gross yield and falling?? :lol:

Share this post


Link to post
Share on other sites

startling figures, but they do to represent the very bottom of the market and thus the most sensitive if prices do adjust downwards. i wouldn't bank on 300,000 a year being a sustainable figure! it also doesn't indicate how many of these 300,000 are literally new purchases by btl's taken off owner occupiers, and how many are btl fools selling to the next biggest fool...

Share this post


Link to post
Share on other sites

So all FTB properties are being bought up by BTL landlords?

Not good news for those on the next rung up trying to sell. Maybe these will slip meaning FTBers

will jump to the next rung. Sounds good to me!

Share this post


Link to post
Share on other sites

And you, Marina, are doing what exactly?

Years ago people used to look down on council house tenants. Just an observation.

But at least council house tenants had security of tenure. I grew up in a council house and my parents lived in the same house for best part of 50 years.

We're seeing the estabishment at the moment of a new renting underclass. It has been gradual but we all know there are now plenty of people in their 30s who have not bought a property and now look like they will never be able to afford one. I guess they will be like most people - they'll want to settle down and have a family - but face living in rented accommodation all their lives. But they won't have any security of tenure because their tenancy will be controlled by 6 month Shorthold Tenancy Agreements.

In due course I think these people will be regarded as lower down the social scale than council tenants ever were.

So what am I doing?

I'm trying to gee you lot up into realising what a desperate situation you are in and, instead of deluding yourself about market crashes putting everything right, I'm trying to get you to realise if you don't act now and make sure the bloody government realises you are not going to stand by and see yourself turned into a renting underclass - then you will be a renting underclass for the rest of your lives.

I am going to give up again though. I did before because the apathy amonst you lot is unbelievable. It would look a bit odd for a protest movement about young people being priced out by BTL being run by someone the same age as Tony Blair who is comfortably off. It's your fight. Fight it.

Cue the 'good riddance' comments from all the smart-@rses who know so much about the world and the economy and the markets that they KNOW exactly what is coming next.

I would advise you to take no notice of them. They KNOW nothing. If they did they would not be on here all day pontificating about interest rates and gold and stock markets.

At the moment 300,000 properties a year are being bought by BTL.

In ten years that will be 3 million more houses available for you to rent and them to profit from. And they'll be rented by the steady stream of younsters growing up who cannot afford to buy property - and, of course, the endless immigrants.

In 10 years time we'll have people in their mid 40s with a couple of young kids living in small rented flats. We're going backwards not forwards.

I guess I am sort of signing off again (I hope I am because I find this place depressing now) so ask yourself this question.

Let's fast forward 10 years.

Will housing in this country be like it is now only with much more property owned by landlords and a huge renting underclass ... or ... will the clock have been turned back 10 years to the state the country was in when NuLabour came to power.

I ask this because to me there is only one way that the country can go back to how it was - to FTBs being able to buy their first property with a reasonable mortgage multiple etc - and that route involves getting property back out of the hands of landlords and into the hands of their tenants.

How the hell is this ever going to happen? Sure a recession will flush some of the more recent BTLetters out of the market, but the older BTLetters (with plenty of equity) will simply use it as an opportunity to increase their portfolio.

I really, really hope you don't find yourself looking at another Shorthold Tenancy Agreement in 10 years time and thinking 'Feck this, we're never going to own our own place - we should have taken to the streets years ago to get this stopped'.

That's 300,000 properties that will be the first to be offloaded when IR rise and capital gains stall. You don't have to feel guilty when you buy a repo off a late entrant into the BTL game.

As for 3 million BTL properties in 10 years?? on 5% gross yield and falling?? :lol:

You laugh if you like. You might not buy a repo off a late entrant into the BTL game because another, older BTLetter with far more money and borrowing power than you will buy it before you. They have priced you out on the way up and they'll price you out on the way down. You are under the illusion that if the market starts to fall then no-one will buy - who buys in a falling market eh? Well the fact is that lots of people did in the last falling market. Because people always convince themselves it has stopped falling - and you can be sure if we do get a falling market the media will call the bottom every month. The VIs will go into overdrive convincing everyone, all the time, the market has turned. And, people will get sucked back in. There are millions of people with nowhere else to turn. Pensions are cr@p. What else can people invest in to protect their future. The love affair with property is now part of the national psyche. This won't be undone easily.

5% gross yield and falling ... yields fall when prices go up or rents go down. Rents aren't going down so prices must be going up.

Even if the property market stalls now and prices only increase at a nominal 3% a year in line roughly with inflation. Property prices still double in 25 years at 3% inflation. Which for an investor who has bought 4 or 5 properties looks like a pretty good deal.

Share this post


Link to post
Share on other sites

I actually agree with some of the points that Marina raises here. There has been a shift from the last crash to this one (if it ever comes). Last time around, as far as I know anyway, there was a lot less BTL. I think that this boom has been sustained by the BTL brigade, and thats why it has gone on for so long. Something that I have noticed amongst my group of friends is that a few of them have brought places and are now thinking of renting again but renting their owned place out. A couple of friends brought a property each about 6 months ago, and one is going to Germany to rent over there whilst the other is moving back up north. They are both looking to let their current places. My point is that the thinking has changed dramatically. Whereas before a house was for living in, it is now an investment commodity.

I believe that the crash will come, because end of the day something has to give. Point is that this one is a lot more drawn out due to immigration and poor FTB's being unable to compete with the BTL's. I don't think this will be short and sharp, but a very long process of gradual slips and fake recoveries.

Share this post


Link to post
Share on other sites

@Marina, your whole argument hinges on the fact that people will sit around and just accept that they will be living in rented 1 and 2 bed micro-flats for the rest of their lives...!!

If, as you seem to believe, the price of property continues upward for ever more, many of the skilled low to mid-wage workers will up sticks and leave this country. The EU is a big old place and getting bigger all the time. If the only thing between me and a decent standard of living for my family was a couple of years of language evening courses I would be there like a shot and out the door.

This is happening already with people who are living in nicer parts of the world and commuting back to the UK for a day or two a week of 'face time' with their bosses and coworkers. No skilled workers = uncompetitve economy! And forget about getting cheap labour from abroad to fill the gap, they won't be able to afford the cost of the accomodation in the UK either, because greedy BTLers will have pushed the prices up!! So, following your 10 yr disaster scenario, will reduce the performance of the UK economy to levels where house prices have to fall as there is no demand!!

Edited by redalert

Share this post


Link to post
Share on other sites

please, I beg you, stop.

One of the major landlords I know in Sheffield is selling up. 20-30 houses a month into auction. Don't you realise - the professionals are getting out? The amateurs are getting in. It will all end in tears when they realise it is hard work when you don't have 10% capital gains every year. They will bail out, many of them bankrupt and the professionals will come back in at reasonable prices that FTB's can afford too.

BTL will be looked back on as a good idea that got way out of hand.

Share this post


Link to post
Share on other sites

BTL is always what it seems as well. I know FTBs who are buying as BTLs because its the only way they can get a mortgage. The banks rate the affordability on the rental value.

Also my missus has a BTL mortgage, but we rent out her place so we can live in a bigger house.

So not all BTL is BTL in the traditional sense of it

Edited by surfgatinho

Share this post


Link to post
Share on other sites

That's 300,000 properties that will be the first to be offloaded when IR rise and capital gains stall. You don't have to feel guilty when you buy a repo off a late entrant into the BTL game.

As for 3 million BTL properties in 10 years?? on 5% gross yield and falling?? :lol:

And the 3 million perspective FTB will just rent these 3 million BTL properties?

Share this post


Link to post
Share on other sites

Lending wuality is deteriorating all the time. The only way the lenders can keep on stuffing the market with new loans is to up their multiples and drop the rental coverage, they are running of well covered investors and moving down the scale. The lenders can get away with this becuase they are repackaging their loans and selling them off to other investment groups - they don not want the debt on their books. The assert backed market assicated wth credit cards has been kicked in the nuts as the defaults come tumbling in and the investors realise they have bought a pig in a poke. The same can happen to the mortgage backed securities if the required levels of interst repayment dont come rolling in as expected.

See the thread I started on the subject, there are already signs of it happening in some products.

Share this post


Link to post
Share on other sites

i wouldn't bank on 300,000 a year being a sustainable figure!

We thought that last year, and the year before. And still it's increasing.

The only thing that will stop the zombie invasion of BTL landlords is government action. It's time to use capital gains to eliminate the speculation on price gain and refocus housing investors on sustainable rental yields.

Share this post


Link to post
Share on other sites

BTL just adds more liquidity (and geared more too) to the mix - greater risk taking, a freer market. This is a good thing in my view as it provides capital to improve the property stock from speculators, which is not immoral in the least, just part of a market, but the bad side is that a less regulated market is more likely as a rule to be privy to greater speculation. This boom is turning to bust, I'm not that emotional about it it's just a fact. BTLrs will get burned, that's neither here nor there, part of their business risk. I may well BTL at some point myself, but I don't consider the current market worth getting into. Furthermore, a lot of current BTLrs will have their credit-ratings etc severly damaged by the correction, as also will lending institutions inevitably have to tighten their own criteria, and the excess BTL mortgage cash currently sloshing around will not exist to the same degree anymore. If you do not understand this (or cannot comment on it due to your lack of understanding) then I do not see how you can hold an informed opinion about the current property market.

Marina - I have to assert , I don't think you understand much about the financial industry , business , markets , society or much else really, as your arguments seem to have little credence, and I can pick them to pieces bit by bit so easily that I don't bother.

Share this post


Link to post
Share on other sites

Buy-to-let borrowing set new records in the first half of the year, with lenders advancing 152,500 loans, worth £17.5 billion.

I wonder what proportion of these mortgages are for buying owner occupied properties, and what proportion are for buying property already in the BTL sector (and thereby not increasing the share of properties owned by BTL landlords). Are there any figures for the "churn" rate of BTLs?

Share this post


Link to post
Share on other sites

a freer market.

In no way can you describe our housing market as a "free market". Artifical controls on the supply of land mean this is not a free market.

In a free market the investment sector could co-exist happily with the home-buyer sector as supply would rise to meet the demand.

In our housing market the investment sector cannibalises the home-buying sector to the detriment of it.

It is the role of regulation to deal with issues like this, yet it isn't coming. Either end of this problem needs dealt with, and soon.

Edited by HousePriceLottery

Share this post


Link to post
Share on other sites

Years ago people used to look down on council house tenants. Just an observation.

But at least council house tenants had security of tenure. I grew up in a council house and my parents lived in the same house for best part of 50 years.

We're seeing the estabishment at the moment of a new renting underclass.

In due course I think these people will be regarded as lower down the social scale than council tenants ever were.

Underclass? You are joking! These people are needed desperately by landlords, BTL or otherwise. Without them LL financial losses will be immense. Renters are already feeling the benefits of greater choice and lower rents. Their expectations are rising and LLs are having to compete hard for tenants. In your dream scenario, it's the LLs who are begging, not the renters. You're very muddled over where the power truly lies.

Share this post


Link to post
Share on other sites

To say that we will end up renting all of our lives is a stupid thing to say. I'm renting at the moment but saving a small fortune each month towards a deposit, so some time down the line I will be able to afford a property. I'm sure there will be lots of people that wouldn't be able to do this, but then I'm not the type that spends a fortune on clothes that I never wear, or go out drinking every other night.

Also, when the inevitable happens and family members die, ther is a chance that you will be left property or money, so all this talk about forever renting is white dog poo!

Share this post


Link to post
Share on other sites

150,000 BTL loans agreed in last 6 months.

Therefore 3,000,000 BTL loans to be agreed over the next 10 years.

I'm sorry to break this to you Marina, but simple linear extrapolation is not a basis for establishing 'facts'.

And while I'm here, just answer this one question Marina. If you're so utterly convinced about all of this, then why don't you start a BTL empire today. You STRed in 2003, so you must have substantial money stashed away somewhere. Why don't you just use this as deposits for a dozen BTL flats?

I'm serious - I want to know.

If you can't convince me, then I'm inclined to believe that you're on some windup mission.

Didn't think of it like that, how true indeed.

Come on Marina answer this important question. An STR with loads of cash and and absolute belief that the BTL investment boom will go on and strive forever, taken as an axiom in your opinion. Why don't you just buy a few BTL's and join this orgy instead of wasting your time trying to get us to protest?

If you can't beat 'em join 'em, act on your stubborn opinion and take advantage if that's what you think.

Share this post


Link to post
Share on other sites

please, I beg you, stop.

One of the major landlords I know in Sheffield is selling up. 20-30 houses a month into auction. Don't you realise - the professionals are getting out? The amateurs are getting in. It will all end in tears when they realise it is hard work when you don't have 10% capital gains every year. They will bail out, many of them bankrupt and the professionals will come back in at reasonable prices that FTB's can afford too.

BTL will be looked back on as a good idea that got way out of hand.

Great post.

BTL amateurs are buying purely on the basis of asset appreciation. In fact my financial advisor suggested instead of selling our existing place when we move, we should MEW and BTL our exisiting place so that the net rental income is equivalent to interest only mortgage payments. The argument is this is THE most tax efficient approach as long as you concentrate all funds in paying off your residential mortgage.

The logic is entirely based on house prices only going up and benign interest rate conditions continuing (given we would effectively be borrowing over £500K in total instead of under £300K).

He's now my financial administrator...

Share this post


Link to post
Share on other sites
Guest Shedfish

We're seeing the estabishment at the moment of a new renting underclass. It has been gradual but we all know there are now plenty of people in their 30s who have not bought a property and now look like they will never be able to afford one. I guess they will be like most people - they'll want to settle down and have a family - but face living in rented accommodation all their lives. But they won't have any security of tenure because their tenancy will be controlled by 6 month Shorthold Tenancy Agreements.

In due course I think these people will be regarded as lower down the social scale than council tenants ever were.

Marina - in this bit at least i do agree with you. as a single bloke with no kids, and in employment, i stand no chance whatsoever of even making the 'bubbling under' section of any housing list, so my choices are either rent, buy, or leave. i'm sick of my friends babbling on about extensions, monopoly money gains etc etc, and do sometimes feel 'belittled' by their 'wealth'

i just have 2 small points to make:

1) if nearly 2 million people demonstrated against the Iraq war, and the government took no notice whatsoever, what do you think they would do if a few 100 thousand of us demonstrated against the very thing that has propped their ailing economy up for the last few years

2) you would not need to be a rocket scientist to take a look at the graph of prices vs time (an example on the home page of this site), and guess what will happen next. it is just a question of when. Snakes and Ladders, not just a ladder...

Share this post


Link to post
Share on other sites

Taken from the news feed bit on the home page of this site ....

"BTL Lemmings go Bonkers

Landlord lending leaps to record levels

Buy-to-let borrowing set new records in the first half of the year, with lenders advancing 152,500 loans, worth £17.5 billion. Incredible!!"

What a truly bizarre interpretation. The most important bit of that is that lenders advanced 152,500 BTL loans in six months.

Given that most BTLetters buy properties that would normally be bought by FTBs - it means that 300,000 properties a year are not available for FTBs to buy.

While you're sleeping here ... waiting for the big crash - 300,000 properties a year are, effectively, being taken out of the market.

But instead of focusing on this - you just decide that they are all BTL lemmings. Well it's been in full swing for some years now - and most FTBs are priced out of the market.

In 10 years time 3 MILLION more properties will be owned by BTL.

We will then have a fully formed HAVE (property) and HAVE NOT (rent forever) society. I guess your only hope then will be to lobby for a change to Shorthold Assured Tenancies to try to get some long term stability.

You're all fiddling while Rome burns.

If we're all fiddling, what exactly are you doing that you want us also to do?

Share this post


Link to post
Share on other sites
1) if nearly 2 million people demonstrated against the Iraq war, and the government took no notice whatsoever, what do you think they would do if a few 100 thousand of us demonstrated against the very thing that has propped their ailing economy up for the last few years

They would start to worry about it, that's what. It would be pushed up the political agenda.

As it stands they are getting away with it.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.