Btl Lemmings Go Bonkers

[Guest Shedfish]

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.

OK you have me - where do i sign up? i couldn't find the date of the october demo on the PricedOut site the other day... when is it? i'll be there

[HousePriceLottery]

OK you have me - where do i sign up? i couldn't find the date of the october demo on the PricedOut site the other day... when is it? i'll be there

Details haven't been announced yet. If you haven't already register on the site, the more members we have the more seriously we get taken.

[Guest Shedfish]

Details haven't been announced yet. If you haven't already register on the site, the more members we have the more seriously we get taken.

just signed up!

[HousePriceLottery]

just signed up!

Cheers.

Anyone else reading, can't you see that government housing policy is being decided by the people who do make a noise.

The Nimbies and "asset-rich" of this world are influencing housing poilicy in a negative way because we simply aren't making our views heard. We need to be better represented as a group so that it's more difficult for the government to screw us over (again).

[Si1]

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.

'Artificial controls on the supply of land' - the biggest control on the supply of land is the nature of land itself , although I concede some of your point here. I'm sorry , but planning laws are not the only thing that exists re: the property market. You just seem to want a free market that serves yourself. The market serves no-one , only those capable of exploiting it, and being an open market means that's generally democratic too - opportunity knocks etc. I too am a priced out FTB but I'm looking at the actual situation , seeing that the free market ACTUALLY leads to a net increase in wealth in the long term , accept that planning regulations are too drawn out and conservative but also accept that we broadly have a free market in the property business itself . I'd like to see freer less NIMBY planning regulations and also better tennant-friendly rental laws, however your assertion that it isn't a free market is bordering on the absurd. We're a small island, price-pressures are inevitable , leading to more speculation and bigger swings. It will give you the opportunity to buy at good value inside the next 5 years, and then the amateur BTLrs who went bust will be complaining about free markets instead.

[jp1]

Is anyone else getting really bored of Marina's "you lot need to take to the streets" Armchair Anarchist ramblings?

[Mags]

Is anyone else getting really bored of Marina's "you lot need to take to the streets" Armchair Anarchist ramblings?

Yes!

I'm still waiting to hear what he/she is doing other than acting as a classic bully.

[Ah-so]

Is anyone else getting really bored of Marina's "you lot need to take to the streets" Armchair Anarchist ramblings?

Problem, if you have anything like that, you end up with a load of Socialist Worker Party activists taking it over with their placards.

Anyway, who we protest against? It is not that house prices have a market price that I dislike, but the fact that the market has pushed it into a bubble.

If you want to protest, protest against planning regulations as suggested above. It is nearly impossible to build on any greenfield site anywhere in this country. Who does the greenbelt benefit anyway?

Marina kept going on about the situation in 10 years. Surely in 10 years the baby boomers will start dying off, leading to a constantly increasing supply of property onto the market?

[munimula]

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.

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.

[tensecs]

Is anyone else getting really bored of Marina's "you lot need to take to the streets" Armchair Anarchist ramblings?

no,

1. I think the debate is much better with her around

2. she's passionate which is to be admired.

3. if she and other dissenting voices leave then we are the bullies

I am getting bored of anti-marina posts, which seem aggressive, which seems defensive, which is worrying.

[HousePriceLottery]

You just seem to want a free market that serves yourself.

No, I want a housing market which where the needs of home-buyers are priortised over those of speculators.

BTL and the banks willingness to lend to them is effectively operating as a cartel keeping home-buyers out of the market. When such anomolies occur it is the job of regulation to redress the balance.

that it isn't a free market is bordering on the absurd.

My point was that calling it a free market neglects the obvious distortions that prevent it working as a truly free market.

We're a small island, price-pressures are inevitable

No they aren't, they are a result of land zoning restrictions and our obsession with not building on uneconomical fields.

Less than 8% of the UK is built upon. To claim the size of the island makes a difference is in your words absurd.

[munimula]

no,

1. I think the debate is much better with her around

2. she's passionate which is to be admired.

3. if she and other dissenting voices leave then we are the bullies

I am getting bored of anti-marina posts, which seem aggressive, which seems defensive, which is worrying.

would you feel different if I told you Marina is a 'he'?

Less than 8% of the UK is built upon. To claim the size of the island makes a difference is in your words absurd.

Exactly, 8% houses 60M - to lose another 1-2% so that another 10-15M could be housed comfortably in something other than a flat would not be a great loss but would improve the lives of many

Why are we obsessed with protecting 'green' fields? They are far from green, monocultural chemical hazards that do nothing to support biodiversity. There's more biodiversity in people's gardens than in fields - that's a fact. 90% of us get nothing from the green fields - we can't see them and we certainly dare not set one foot on them as they are all private.

I'm all for natural vegetation and I'll defend that but to defend what we call 'green' fields is non-sensical

[Lionel Richtea]

BTL and the banks willingness to lend to them is effectively operating as a cartel keeping home-buyers out of the market.

Surely, this is the solipsistic quote of the week.

To understand this statement: by providing free access to mortgages to all the banks are operating as a cartel?

[Mags]

Surely, this is the solipsistic quote of the week.

To understand this statement: by providing free access to mortgages to all the banks are operating as a cartel?

I think you misunderstand...

[Lionel Richtea]

I think you misunderstand...

Happy to see some clarification. Always willing to learn.

[Larry Livingstone]

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

"BTL Lemmings go Bonkers

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.

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

Edited August 18, 2006 by Larry Livingstone

[Marina]

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.

Well you had better get your cynical hat on .... I actually believe owning more than one property is immoral. I find the idea of being a landlord vaguely repulsive. I am not one of those (many) people in life who feels they have to climb over other people to get on.

But let's forget all that ... there are other reasons. I don't think BTL is all it is cracked up to be. It is hard work and as we all know the yields are low (where I live), you get voids, damage etc. But that's just me. I think I have a brain between my ears. Lots of people are suckered by the VI bull and simply buy in to BTL. If you stick at it, and can afford to subsidise the rent, it seems to me, as an investment, to stack up. It is still not for me though.

[Mags]

Happy to see some clarification. Always willing to learn.

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.

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. What looks like bad news for home buyers may in fact be the silver lining.

[Si1]

No, I want a housing market which where the needs of home-buyers are priortised over those of speculators.

that's not a free market , sorry

My point was that calling it a free market neglects the obvious distortions that prevent it working as a truly free market.

No they aren't, they are a result of land zoning restrictions and our obsession with not building on uneconomical fields.

Less than 8% of the UK is built upon. To claim the size of the island makes a difference is in your words absurd.

- are not two sides of the South East bounded by the sea, are you saying this makes no difference?

we do have some of the tightest planning regulations in the world, but it sounds like you are hysterically trying to blame SOMEONE when some of is just the painful chance-like background to life. We have tight planning laws , hopefully these can be improved, fair enough, I am in support of this. These are not the whole problem , we really do have a limited physical size to the country in comparison with our economic and demographic stature, importantly in areas where the physical boundaries are where it matters the most, and to wish this away and instead just try to blame the ENTIRE problem on the planning aspect is really very black and white, unpragmatic, and unhelpful.

[Marina]

@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...!!

Many people will have no choice. Choice is the luxury of the wealth.

If, as you seem to believe, the price of property continues upward for ever more, I don't believe this - I haven't said this - I have said I don't think a crash is going to happen that will miraculously make property affordable for the average FTB - I have said I believe BTLetters will price you out on the way down as well as on the way up. 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. It's just fantasy. You need real language skills, not evening class standard. Or you move to the Costa Del Sol and work for the English. Last time I was there the place was crawling with English plumbers etc (10 years ago). Now property there is expensive of course. Sure some people will go - but some people have been going for some years now with no negative effect on the UK property market.

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. ?????????? Really? First I have heard. But let's pretend it's true - the era of low air fares will be over one of these days - there is a big backlash building against the massive increase in air traffic because of the environmental cost. 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!!

Simple fact is emigration is not an option for many people. And they'll stay here and live in houses owned by BTLetters.

[Si1]

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.

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. What looks like bad news for home buyers may in fact be the silver lining.

I actually agree with this - I would add that this is the price we pay for a powerful free market. The people I feel sorry for are people who effectively have had to buy a family home at inflated prices. I cry not one drop for BTLrs who lose out, this is business risk , but I feel for owner occupiers. I do feel that a more stable renting system , more in favour of tenants , would allow people to happily raise a family in quality rented, and feel able to stick out property-price cycles, once we have all got used to them happening.

[IamSpartacus]

I actually agree with this - I would add that this is the price we pay for a powerful free market. The people I feel sorry for are people who effectively have had to buy a family home at inflated prices. I cry not one drop for BTLrs who lose out, this is business risk , but I feel for owner occupiers. I do feel that a more stable renting system , more in favour of tenants , would allow people to happily raise a family in quality rented, and feel able to stick out property-price cycles, once we have all got used to them happening.

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?

[Mags]

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?

Absolutely. The current housing market is not a free market at all.

[Marina]

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...

My answers are:

1) Why just pick on the Iraq war protest? Why conclude it was unsuccessful? The tosser Blair had already made his mind up we were going to war. But boy have his politicians been roasted about it since. I think the Iraq war protest march gave people who were instinctively against it a 'voice'. Once upon a time people would only reluctantly voice their opposition to a war. It is not the done thing when your soldiers are dying to undermine moral etc. But I have seen Labour politicians roasted mercilessly on Question Time - over and over again. I think the Iraq Protest march gave people the courage to use their voices and I think it sent a clear message to Blair 'Don't even think about Iran'. Why not think about the many protest movements in history that have been successful instead of picking on one that, to some extent, wasn't?

2) Yep that graph looks tempting doesn't it. And if the housing market was a more simple market - perhaps a speculative boom in tulip bulbs - you would be convinced the next bit of the graph would be the reverse of the most recent bit. But to do this misses the change in the market over the last 7 or 8 years.

Property is now an investment.

Half the country want to be or are property developers (people are giving up their jobs for heaven's sake to work like a dog on a property to earn 15k profit - or nothing sometimes)

There has been a massive growth in BTL ownership which has transformed the structure of the market. Look on any estate agent's website. Any house or flat at the bottom end of the market is now described as 'ideal investment opportunity' not 'ideal first time buy'.

If you ignore the changes in the market you can't predict what will happen next (not that any of us can) but I am convinced we will not see the graph turning South any time soon - unless there is some sort of global economic crisis that forces much higher interest rates on us. So I would say the opposite is true .... if you were a rocket scientist you would look at the forces moving the market rather than just expecting it to reverse.

[Lionel Richtea]

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.

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. What looks like bad news for home buyers may in fact be the silver lining.

Ahh... so it was nonsense after all.