Btl Lemmings Go Bonkers

[Marina]

Alarm bells ring when I read this, if so many ftb propertys are owned by btl LL's and new ones at that, the lower end market is held by weak hands, not ftb's/family's who need a roof over there heads so unlikely to sell.

These late to the party LL's will be the first to sell at signs of a downturn or personal finacial difficulty (ie when they realise that it is actually costing them money)

Come on, it doesn't take an idiot to work that out marina, its not a free / easy money market anymore

Ever bought a BTL and found a year down the line that, if you sold, you would realise a 20k loss? I haven't either. But, I am pretty sure that if I had bought a flat knowing I would have to subsidise the rent by £200 a month to pay the mortgage - because I see my purchase as a long term investment (my 'pension') - then why in the name of all that is holy would I sell up if the market turned against me?

I won't sell up. I'll stick it out - because, I still believe that in the long run property always goes up (which, to date, it has).

So why the BTL stampede to sell if the market does start falling? This is a pipe dream. No one likes realising a capital loss. You can see it now 'BTL landlords advised to sit tight - John Smith of Fancy Mortgages said today that Buy To Let landlords must not panic in the face of the recent downturn in property prices. 'Buy to Let is a long term investment and, in the long term, property always goes up. Landlords should concentrate on finding quality tenants and keeping their properties in good order to avoid voids blah blah'

[Mags]

Ahh... so it was nonsense after all.

As I said... I think you misunderstand.

I won't sell up. I'll stick it out - because, I still believe that in the long run property always goes up (which, to date, it has).

You may not have a choice.

[Marina]

In the long term though, having pushed prices higher than they would have naturally gone, this very policy may well send them tumbling even further than they would have.

?????????? BTL investors are not going to suddenly disappear from the property market IF prices start falling. The belief in property as a long-term 'pension' investment is now too well entrenched. As (if) the market falls successful BTLetters will be pouncing on bargains. So the policy won't send them tumbling even further than they would have. On the contrary, they will tumble much less than they would have.

In fact, they may well not 'tumble' at all.

You may not have a choice.

And if I don't have a choice (well not me because I am not a BTLetter), there will be plenty of more successful (at it longer with much more equity) who will buy off me and still price you out.

[abaxas]

?????????? BTL investors are not going to suddenly disappear from the property market IF prices start falling. The belief in property as a long-term 'pension' investment is now too well entrenched. As (if) the market falls successful BTLetters will be pouncing on bargains. So the policy won't send them tumbling even further than they would have. On the contrary, they will tumble much less than they would have.

In fact, they may well not 'tumble' at all.

What a load of tosh. The average BTL punter would rather sell his kids to a peado than buy into a falling market.

[Marina]

What a load of tosh. The average BTL punter would rather sell his kids to a peado than buy into a falling market.

Funny, I used to think that. Then I thought a bit more. I have lived through three 'falling' housing markets. In each of them the bottom of the market was called every day. We say in 2004 and 2005 just how hard and dirty the VIs fight when the market is in the process of falling.

One of the reasons it recovered early this year is the fact that the VIs just wouldn't allow anyone to believe that it was falling. I used to talk to people round here and they would say 'Do you think you made the right decision to sell and rent?' ... and I would say 'too right, the market is falling around here now, nothing much is selling and those that do are sellling way under asking price'. I got looked at as if I had two heads.

I began to understand just how entrenched this 'property is an investment, property only ever goes up, property is my pension etc etc' mentality is.

So BTLetters will buy in a falling market. Because they will never admit they are in a falling market. On the contrary they will think any recent falls were a heaven sent buying opportunity as, in the long run, property always goes up.

[Si1]

But it isn't a free market. BTLers can offset the interest part of their mortgage payment (i.e. often 100% of it) against their tax bill. A homebuyer wanting to live in the same property cannot offset any off their mortgage payment against their tax bill. In other words, it costs less for a BTL investor to buy the same property than it does for a homebuyer. What's free about that?

no it doesn't. They can offset income tax on rent (implicitly that which pays the mortgage) against costs they have to pay to maintain their business (I presume paint , maintenance etc). Since owner occupiers pay no income tax on the implicit rent that they don't have to pay in the first place, then they are the better off due to unbalanced taxation laws, and this disfavours the renting market, along with CGT imbalances too. Do you understand what you are talking about?

[grim up north]

What a load of tosh. The average BTL punter would rather sell his kids to a peado than buy into a falling market.

I agree. What sort of fool would buy a house as an investment/pension with the prospect of capital depreciation?

Although, maybe the same sort of idiot that has bought a BTL in the last few months............

[abaxas]

Funny, I used to think that. Then I thought a bit more. I have lived through three 'falling' housing markets. In each of them the bottom of the market was called every day. We say in 2004 and 2005 just how hard and dirty the VIs fight when the market is in the process of falling.

One of the reasons it recovered early this year is the fact that the VIs just wouldn't allow anyone to believe that it was falling. I used to talk to people round here and they would say 'Do you think you made the right decision to sell and rent?' ... and I would say 'too right, the market is falling around here now, nothing much is selling and those that do are sellling way under asking price'. I got looked at as if I had two heads.

I began to understand just how entrenched this 'property is an investment, property only ever goes up, property is my pension etc etc' mentality is.

So BTLetters will buy in a falling market. Because they will never admit they are in a falling market. On the contrary they will think any recent falls were a heaven sent buying opportunity as, in the long run, property always goes up.

I disagree.

The entrenched idea is not 'property is an investment' it is purely 'property only goes up'.

This is only entrenched in those who are <35 years old. People who remember the last crash still have some sanity left in them. And also some remember the last 2!

Once things turn the media will love it. Lots of free news, sob stories of people loosing their homes etc.

The media is not a VI (as some suggest here), they just like sensationalism (probably not a real word!) or lots of news.

A HPC is a great long term news story, just like HPI is.

And if you remember just before the stockk market crash that set this all off, people were saying the same thing about the markets. It'll never go down, they only go up.

[Si1]

also , once falls set in , this equates to higher lending risk for lenders, so the availability of cheap BTL mortgages will dry up too, whilst at the same time current recent BTLrs credit ratings plummet meaning they just wouldn;t be able to borrow the money even if they did want to reinvest in a falling market!

[Immigrant]

What a load of tosh. The average BTL punter would rather sell his kids to a peado than buy into a falling market.

The average BTL punter would rather sell his kids to a paedo than sell his BTL. Look at all those debt-diary types - the BTL is the last thing they'll sell. They are convinced that property always goes up. It is going to take a lot to convince them that the market is falling (and it's not at the moment in most areas).

[DabHand]

Marina l wouldn't try and rationalise the actions of stupid people in large numbers. There will be a lag and then "houses are bad" will be the entrenched view for the next decade. Thats when you buy.

Note also that no BTLer rich, leveraged or otherwise is going to put ANY money in an asset yielding an unreliable 5% with a underlying and ongoing capital loss. You will make that much in a vanilla savings account. Although the telly says houses are the new black/going out/an@l sex, rich people dont really want to own your house and every other in your town, they got far better things to do and spend their money on than dealing with hoi polloi and their pleb shacks.

Only people playing with other people money (highly leveraged BTL muppets) will still take this risk, but whose gonna give them the money once the banks start tightening the credit supply?? All roads lead me to disagree with your rent doom scenario.

[Si1]

Marina l wouldn't try and rationalise the actions of stupid people in large numbers. There will be a lag and then "houses are bad" will be the entrenched view for the next decade. Thats when you buy.

Note also that no BTLer rich, leveraged or otherwise is going to put ANY money in an asset yielding an unreliable 5% with a underlying and ongoing capital loss. You will make that much in a vanilla savings account. Although the telly says houses are the new black/going out/an@l sex, rich people dont really want to own your house and every other in your town, they got far better things to do and spend their money on than dealing with hoi polloi and their pleb shacks.

Only people playing with other people money (highly leveraged BTL muppets) will still take this risk, but whose gonna give them the money once the banks start tightening the credit supply?? All roads lead me to disagree with your rent doom scenario.

hear hear

[grim up north]

The average BTL punter would rather sell his kids to a paedo than sell his BTL. Look at all those debt-diary types - the BTL is the last thing they'll sell. They are convinced that property always goes up. It is going to take a lot to convince them that the market is falling (and it's not at the moment in most areas).

Its up to them, sell and rescue a bit of equity or have it repossessed later on. The expectation of property always going up will change.

[Lionel Richtea]

As I said... I think you misunderstand.

Alas, I understand all to well:

+++++++++++

BTL pushes prices up out of reach of home buyers (ie people who want to buy a home to live in). Banks' willingness to lend to BTL investors creates an effective cartel which is currently operating against home buyers.

++++++

How is this the banks acting as a cartel, exactly, as was originally put forward? By providing free flow of capital , it's quite the opposite. If anything, it's a monopsony.

[Gavin]

Marina, let me say that I have always enjoyed your posts and looked forward to reading them.

Yet I do note that you tend to have mood swings where you are convinced of a crash, then within a couple of weeks you are convinced that in the long term things only go up and it’s a buy signal.

At one moment you say you are never coming back, then you are back. In a sense you are as cyclical as a market! Is this your own brand of genius to convince us to just watch the wave crest turn into trough?

I am intrigued that you tell us that BTL are REPLACING FTBs and then go on to assume that in a flat or slow sliding market BTLetters will not sell and therefore no crash.

We have always said that the final end to this ‘game’ – and that’s all it is despite the money involved- will be precipitated by a fall in sales volume.

Many on here – myself included – admit that we have been wrong. I had miscalculated the stupidity of the BTL brigade.

Stupidity 1 - The financial illusions associated with putting deposit money down and not including it in your total yield calculation/comparison with mortgage costs.

Stupidity 2 – Accepting yield on a par with holding cash when the risk is not on a par. Stupidity 3 – Not including ‘time’ spent maintaining the property in your calculation of economic cost.

I don’t give a flying frick if BTL’s stick with their properties if prices stagnate in some conscious/unconscious face saving exercise. Those fools will have no bearing on prices. The only people who will affect prices will be those who buy and sell. Some WILL sell, who will buy?

Even the most daft BTL will stop buying if there’s a monthly loss and no sure capital gain. SO WHO WILL BUY THEN?

FTBs? Let me take you back to one of your first assumptions. They have been replaced by BTL.

NO ONE TO BUY? SOME TO SELL?

Volumes collapse, then prices collapse. I agree with the poster that said BTLetters will be quicker to sell than families who struggle. Therefore when it happens it will happen more severly and more quickly than the last crash.

Sorry to not change MY tune but I ain’t convinced of anything other than bubble? More bubble.

The fact that more and more money is pouring into BTL yet price growth has slowed is evidence that the bubble is running out of room to expand.

This new daft Morgan Stanley Flexi-mortgage may pump it up one last time and prolong the agony but this is a bubble and will burst.

I honestly believe there is no need for any protest whatsoever.

[Mags]

Alas, I understand all to well:

+++++++++++

BTL pushes prices up out of reach of home buyers (ie people who want to buy a home to live in). Banks' willingness to lend to BTL investors creates an effective cartel which is currently operating against home buyers.

++++++

How is this the banks acting as a cartel, exactly, as was originally put forward? By providing free flow of capital , it's quite the opposite. If anything, it's a monopsony.

No not quite.

As I understand the original poster the cartel included the BTL 'business'.

Don't be under the illusion that banks' involvement in this is benign. It isn't.

[since the beginning]

My sister just bought a house of a BTLer

Perhaps FTBs are taking out BTL loans as it means they can escape the affordability measures constraining them on traditional mortgages. Anyone thought about that? Interest rates are pretty much the same these days.

I mentioned this on another thread but got belittled by someone saying this is not the case. I no loads of people that have bought BTL away from where they live. They rent in London and pay off the mortgage somewhere else. They are both FTB and BTL's in my opinion just another example of the bubble. Rents don't seem to be paying the mortgage but people are prepared to take the hit while prices are rising.

http://www.housepricecrash.co.uk/forum/ind...st&p=430937

[adibrown]

I disagree.

The entrenched idea is not 'property is an investment' it is purely 'property only goes up'.

This is only entrenched in those who are <35 years old. People who remember the last crash still have some sanity left in them. And also some remember the last 2!

Once things turn the media will love it. Lots of free news, sob stories of people loosing their homes etc.

The media is not a VI (as some suggest here), they just like sensationalism (probably not a real word!) or lots of news.

A HPC is a great long term news story, just like HPI is.

And if you remember just before the stockk market crash that set this all off, people were saying the same thing about the markets. It'll never go down, they only go up.

Rubbish. You say that the entrenched idea that property only goes up is something that only those under 35 believe in because they never witnessed a crash. Sorry but history proves with the odd bust/crash that property prices long term have indeed continued rising. In fact if you bought somewhere now history would dictate that in 25 years you will be guaranteed an increase in the price you paid. It is something my father has taught me and his father before him. History shows us that you will never lose in property long term.

Now if you disagree with me you are saying that economic conditions are different this time around and therefore contradict the very foundation for most Bear arguments. That is the fundamental belief the HPI cannot continue because every boom is followed by a bust and history shows us as such. Constantly the bears argue the cycle argument, the historical evidence that crashes happen cannot be used and then in another breath say that property long term may never increase in price after a crash or duip in prices.

If you believe the historical argument then you believe that house prices over the long term will continue to rise and offer good long term investment.

[Marina]

Marina, let me say that I have always enjoyed your posts and looked forward to reading them.

Yet I do note that you tend to have mood swings where you are convinced of a crash, then within a couple of weeks you are convinced that in the long term things only go up and it’s a buy signal. No, no, no - I am convinced there won't be a crash - I can't see prices going up much either - long term nothingness - I don't really know - no-one does - it, in a sense, is not important. A generation is priced out - that is important. The market has changed - so much BTL now - whether the market goes up or down is no longer relevant to some extent - BTLs will continue to price out youngsters.

At one moment you say you are never coming back, then you are back. In a sense you are as cyclical as a market! Is this your own brand of genius to convince us to just watch the wave crest turn into trough?

I am intrigued that you tell us that BTL are REPLACING FTBs and then go on to assume that in a flat or slow sliding market BTLetters will not sell and therefore no crash.

We have always said that the final end to this ‘game’ – and that’s all it is despite the money involved- will be precipitated by a fall in sales volume. Sales volumes at the moment are very high. Have a look at this table - okay out of date but it shows low volumes in late 2004 and first half of 2005 but volumes have recovered. This year the mortgage approvals show they will be at record highs.

Many on here – myself included – admit that we have been wrong. I had miscalculated the stupidity of the BTL brigade.

Stupidity 1 - The financial illusions associated with putting deposit money down and not including it in your total yield calculation/comparison with mortgage costs.

Stupidity 2 – Accepting yield on a par with holding cash when the risk is not on a par. Stupidity 3 – Not including ‘time’ spent maintaining the property in your calculation of economic cost.

I don’t give a flying frick if BTL’s stick with their properties if prices stagnate in some conscious/unconscious face saving exercise. Those fools will have no bearing on prices. The only people who will affect prices will be those who buy and sell. Some WILL sell, who will buy? BTLs expanding their portfolio, new BTLs. The vast majority of people still think property is a good investment.

Even the most daft BTL will stop buying if there’s a monthly loss and no sure capital gain. SO WHO WILL BUY THEN? Again, BTLs - look at any long term property price graph - the expression - they always go up in the long term is, apparently, true. How will they ever be sure there will be no capital gain when all the time (assuming a falling market) the bottom of the market is called every day by the VIs.

FTBs? Let me take you back to one of your first assumptions. They have been replaced by BTL.

NO ONE TO BUY? SOME TO SELL? Again, BTLs expanding their portfolio. New BTLs. They are replacing FTBs

Volumes collapse, then prices collapse. I agree with the poster that said BTLetters will be quicker to sell than families who struggle. Therefore when it happens it will happen more severly and more quickly than the last crash. Volumes are high at the moment. Mortgage approvals are high.

Sorry to not change MY tune but I ain’t convinced of anything other than bubble? More bubble. Well I have changed my tune. I have realised BTL has changed the market forever.

The fact that more and more money is pouring into BTL yet price growth has slowed is evidence that the bubble is running out of room to expand. Not where I live. Prices have definitely gone up this year. However, I don't see price growth as an issue. If price growth slows it doesn't matter - as long as it is does not stop and prices drop. But, as I have said before, even if they do, such is the depth to which 'property is a great investment' is entrenched, people will be easy to convince the bottom has been reached and will keep on buying. The market since the beginning of this year is absolute proof of the resilience of this market - the fact it has changed.

This new daft Morgan Stanley Flexi-mortgage may pump it up one last time and prolong the agony but this is a bubble and will burst.

I honestly believe there is no need for any protest whatsoever. Well I hope you don't live to regret that. I think the younger generation is being completely shafted and hung out to dry. The favourable tax regime for BTL is a national scandal - yet no one mutters a word about it.

also , once falls set in , this equates to higher lending risk for lenders, so the availability of cheap BTL mortgages will dry up too, whilst at the same time current recent BTLrs credit ratings plummet meaning they just wouldn;t be able to borrow the money even if they did want to reinvest in a falling market!

Keep taking the pills.

'Once falls set in' - you're so certain you make me laugh. What if they don't eh? We carry on just as we are. Nominal house price growth - more and more property bought by BTL - BTL happy that, long term, their investment is sound.

What falling market? We had one here - during 2004 and 2005 but, as soon as prices had hardened a bit - bam, big new buying spree and prices back up again. Looks like this is what will characterize the market for a while now.

People bought BTLs around here in 2004 and I thought they were nuts. Rent definitely would not cover the mortgage and the asset seemed to be falling. Well how bloody wrong I was. They are probably 20k up now and the money they pay to subsidise the rent looks like a good investment.

[adibrown]

Keep taking the pills.

'Once falls set in' - you're so certain you make me laugh. What if they don't eh? We carry on just as we are. Nominal house price growth - more and more property bought by BTL - BTL happy that, long term, their investment is sound.

What falling market? We had one here - during 2004 and 2005 but, as soon as prices had hardened a bit - bam, big new buying spree and prices back up again. Looks like this is what will characterize the market for a while now.

People bought BTLs around here in 2004 and I thought they were nuts. Rent definitely would not cover the mortgage and the asset seemed to be falling. Well how bloody wrong I was. They are probably 20k up now and the money they pay to subsidise the rent looks like a good investment.

Very true, very true. Good to hear a bit of common sense around here and a burst of reality on the forums. I see what I see and I see people buying. You can wheel every stat and chart in the world out in front of me but it is very simple if people continue to buy houses there will be no crash and people are still buying up houses, fact.

[Mags]

Rubbish. You say that the entrenched idea that property only goes up is something that only those under 35 believe in because they never witnessed a crash. Sorry but history proves with the odd bust/crash that property prices long term have indeed continued rising. In fact if you bought somewhere now history would dictate that in 25 years you will be guaranteed an increase in the price you paid. It is something my father has taught me and his father before him. History shows us that you will never lose in property long term.

Now if you disagree with me you are saying that economic conditions are different this time around and therefore contradict the very foundation for most Bear arguments. That is the fundamental belief the HPI cannot continue because every boom is followed by a bust and history shows us as such. Constantly the bears argue the cycle argument, the historical evidence that crashes happen cannot be used and then in another breath say that property long term may never increase in price after a crash or duip in prices.

If you believe the historical argument then you believe that house prices over the long term will continue to rise and offer good long term investment.

You sound like enworb! I'm guessing by your names you're linked.

It's a cycle. Depends entirely when in the cycle you bought as to whether or not you made a good, mediocre or just plain stupid investment.

[Gavin]

Well I have changed my tune. I have realised BTL has changed the market forever.

Your saying of course that its different this time, the classic bubble characteristic.

I can agree with you to some extent, I have already. I miscalculated peoples appetite for BTL and I was wrong.

But just because you have new buyers it won't change the fundamentals of what a house is worth.

I actually give more credence to the concept of holiday homes distorting the market. The choice to buy a holiday home makes a difference because 1 person owns 2 and doesn't see it as an immediate investment, they use it to add to the quality of their lives (at the exclusion of others of course). The result is additional consumption of houses and remaining demand forces up prices amid limited supply. This is a paradigm shift. The fact that people are not using their capital well could go on for a number of years or more, it ain't my capital so I don't care.

BTL is different, and especially leveraged BTL; that method so advocated by organisations like inside track.

The long term succuess of BTL relies on renting out the property. As prices rise then the rents need to rise accordingly. Yet the very people expected to pay the rents, can't afford the mortgages so won't be able to afford the rents.

The only remedy for this is for wages to rise. If such a thing happens then interest rates are forced to rise and there will be many forced sellers of leveraged BTL portfolios and connected credit constraints.

I just don't follow that BTL is any different from any other asset or investment. It can price itself out of kilter with fundamentals for a time, but not forever.

Let them buy more and more BTL if they want, see if I care. I can wait.....and wait. My rent is less than 50% of the cost of an interest only mortgage on the same property.

I am not the person throwing away dead money.

If you are right, then I adapt and never own. The 10 year doom scenario of 3 million BTLs will mean that rentals will revolutionise. I can rent in a german style environment. No problem. The wife and I have already agreed that we would be happy to have a family in rented accomodation. In many ways its a lot less hassle.

I am not backing down on this though, not trying to hide behind a new scenario, its just I don't care about BTL. It makes no financial sense and so I will avoid it and let the foolish rush in.

As the Bubbster says, renters have a covered play. They are taking a short position but it pays them every month to do so. A very rare situation to be able to make money in an irrational market with minimal risk.

I actually quite like BTL. Its making my short play tremendously enjoyable and easy. Its the biggest proof of a bubble there can be.

I owned and still own Bookam Technology shares, they peaked at 54quid each in 2000. After the first big fall I bought more at 11 pounds, thinking when they recover I will make a 5 fold increase. Now they have transfered to the US and are worth the equivalent of about 50pence each.

I never sold on the way down, instead bought more. Didnt stop them falling through the floor did it?

Bookham were the DARLING of the dot con. Just like Victorian houses in good areas are today.

[Marina]

Your saying of course that its different this time, the classic bubble characteristic. Whether it is a classic bubble characteristic or not ... lots of people on here repeat a mantra about markets and cycles ... it seems a bit odd to me to discount changes in the market.

I can agree with you to some extent, I have already. I miscalculated peoples appetite for BTL and I was wrong.

But just because you have new buyers it won't change the fundamentals of what a house is worth. Why not? A house is worth what someone will pay - if a FTB can't afford 150k but a BTL can - then new buyers have and do change what a house is worth.

I actually give more credence to the concept of holiday homes distorting the market. The choice to buy a holiday home makes a difference because 1 person owns 2 and doesn't see it as an immediate investment, they use it to add to the quality of their lives (at the exclusion of others of course). The result is additional consumption of houses and remaining demand forces up prices amid limited supply. This is a paradigm shift. The fact that people are not using their capital well could go on for a number of years or more, it ain't my capital so I don't care. I agree with you here - holiday home ownership in Devon and Cornwall has completely distorted the market and there is now almost no chance of youngsters there getting on the property ladder.

BTL is different, and especially leveraged BTL; that method so advocated by organisations like inside track.

The long term succuess of BTL relies on renting out the property. As prices rise then the rents need to rise accordingly. Yet the very people expected to pay the rents, can't afford the mortgages so won't be able to afford the rents. The rents don't need to rise if prices rise after the property has been bought. I pay just over a grand a month to rent a 400k house - but the landlord has owned it for years. He is getting a good yield compared to the price he originally paid and, from what I remember these houses sold for when they were new 18 years ago, the value of the house has about tripled.

The only remedy for this is for wages to rise. If such a thing happens then interest rates are forced to rise and there will be many forced sellers of leveraged BTL portfolios and connected credit constraints.

I just don't follow that BTL is any different from any other asset or investment. It can price itself out of kilter with fundamentals for a time, but not forever.

Let them buy more and more BTL if they want, see if I care. I can wait.....and wait. My rent is less than 50% of the cost of an interest only mortgage on the same property. In my area a newish (nice) 2 bed flat bought for about £210k rents for about £850 a month. This seems to have been the BTL property of choice. Someone buying them on an 85% BTL mortgage will pay about £10,700 for a 6% mortgage. The rent comes to about £10,200. They are new so bugger all maintenance and they're nice so not too many voids. Even if they only get £650 a month ... they don't seem to care .... rightly because the specific flats I am thinking of have gone up 20k in the last year. Like you my rent (as I mentioned above) represents about 50% of what it would take to pay a BTL mortgage on the property I rent ... but BTL landlords are not buying 400k detached houses and pricing me out of the market - they are buying flats and terraces etc and pricing youngsters out of the market.

I am not the person throwing away dead money. m

If you are right, then I adapt and never own. The 10 year doom scenario of 3 million BTLs will mean that rentals will revolutionise. I can rent in a german style environment. No problem. The wife and I have already agreed that we would be happy to have a family in rented accomodation. In many ways its a lot less hassle. Not under Assured Shorthold Tenancies it isn't. When your kids are happy where they live, it's safe and they have lots of friends, you like the neighbours - then your landlords decides to retire and sell up .... it's a lot of hassle getting kicked out of a rented property you like and want to stay in. And you can't even stick posters on the walls in the kids' bedrooms.

I am not backing down on this though, not trying to hide behind a new scenario, its just I don't care about BTL. It makes no financial sense and so I will avoid it and let the foolish rush in. It makes no financial sense to you, but it seems to make a lot of financial sense to a lot of other people that are distorting the market and buying the property normally bought by FTBs. Just because you don't want to play doesn't mean others feel the same way. If you bought a BTL now for 150k and it went up 3% a year for 25 years it will have doubled in value. If you have to subsidise the rent by £300 a month for the first year - diminishing to nothing by the 10th year - your subsidy will cost you 18k. At the end of the 25 years you sell up, repay the interest only mortgage and stick 132k in your back pocket. This is what people are in BTL for. If you get a mini property boom or two in the 25 years - you are even more ahead of the game. My landlord now gets a rent that easily pays his mortgage. And his capital increase has been massive. You'd have a hard job convincing him that BTL was a mugs game. I bet he could afford a few more BTLs now and I bet he could stick it out if times got sticky or prices went down a bit over the next few years because, every bit of evidence says, he'll be a lot better off in the long run.

As the Bubbster says, renters have a covered play. They are taking a short position but it pays them every month to do so. A very rare situation to be able to make money in an irrational market with minimal risk. That is a very strange view of 'making' money. If I rent for £600 instead of paying a mortgage of £1000 I am not making money. I'm saving money. But, as I keep repeating ... the owner of the property will come out ahead in the long run.

I actually quite like BTL. Its making my short play tremendously enjoyable and easy. Its the biggest proof of a bubble there can be. Time will tell. People in BTL quite like it too, in fact they keep buying more and more property.

I owned and still own Bookam Technology shares, they peaked at 54quid each in 2000. After the first big fall I bought more at 11 pounds, thinking when they recover I will make a 5 fold increase. Now they have transfered to the US and are worth the equivalent of about 50pence each.

I never sold on the way down, instead bought more. Didnt stop them falling through the floor did it? No because you were a minor player in the market. You might have had a few thousand shares out of millions in issue. No comparison with BTL. Huge numbers of people are still supporting the shares - so they are not falling.

Bookham were the DARLING of the dot con. Just like Victorian houses in good areas are today. No comparison. A few people wanted Bookham shares at the end - the appetite for Victorian houses in good areas is unlikely to diminish.

You sound like enworb! I'm guessing by your names you're linked.

It's a cycle. Depends entirely when in the cycle you bought as to whether or not you made a good, mediocre or just plain stupid investment.

I guess if you repeat that often enough you hope to convince people.

It is not a cycle. It is not a cycle. It is not a cycle.

It is not coffee or aluminium. It is not an economy.

It is housing. What has happened to housing over the last 5 to 7 years is not part of the upswing of a cycle. It is a structural shift in the way the market works.

People used to aspire to own one 3 bed semi by the time they were 50. Now many people aspire to own 50 properties by the time they are 50.

Big difference and it is not a cycle.

[Keith.G]

The 300,000 figure seems pure fiction

How many of these advances were re-mortgages? (seems a potential error not to have even considered this)

There has been huge growth in Student BTL accommodation which are not usually FTB type properties - Also this growth may not continue if student numbers decline and we get towards the equilibrium of demand = supply

So the 300,000 figure of potential FTB properties being denied seems pure invention along with the fact it will be sustained (by doubling the half yearly figure the size of the error is also doubled!)

[OnlyMe]

The 300,000 figure seems pure fiction

How many of these advances were re-mortgages? (seems a potential error not to have even considered this)

There has been huge growth in Student BTL accommodation which are not usually FTB type properties - Also this growth may not continue if student numbers decline and we get towards the equilibrium of demand = supply

So the 300,000 figure of potential FTB properties being denied seems pure invention along with the fact it will be sustained (by doubling the half yearly figure the size of the error is also doubled!)

Way off the mark, two bed terrace is/was FTB territory in most othe country, these have morphed into 5 bedder student houses. It is only recently that crappy newbuild high density flats have been marketed as prime FTB fodder all over the country by the builders.