Buy-to-let Fears Mount After Rate Rise

[Bug16]

http://business.timesonline.co.uk/article/...2554099,00.html

[thedebtisreal]

I always laugh at the long term investors.

Property Cycles are 15-20 years long. Who wants to slug through a decade of negative equity?

[DaggaDagga]

Cycles only become apparent with hindsight. For how many years have people on this site been calling the peak?

[geneer]

Cycles only become apparent with hindsight. For how many years have people on this site been calling the peak?

And because it hasn't happened yet it never will? How many times does this tired old argument have to reiterate.

Most bears did not anticipate the extent to which this bullmarket would play out, but it doesn't mean that the fundamentals - the real fundamentals of speculative investement - will not cause the market to correct as history has always demonstrated.

[VeryMeanReversion]

"Concern is mounting that borrowers who took advantage of more relaxed lending criteria throughout last year are now in danger of struggling to fund their investments, particularly for the 92 per cent of investors that also have mortgages on their own homes."

Looks like the banks are well covered then. They will claim the first home equity (if there is any left) to cover themselves when the BTL's get repossessed.

So a single BTL reposession may result in the rest of any portfolio being sold as well as the owners own home.

A nice accelerator effect for the crash.

(The boom accelerator being 1st home MEW, BTL-deposit, new MEW, BTL-deposit, new MEW, BTL-deposit etc.)

VMR.

[HovelinHove]

This issue of BTLers who have MEWed to buy property is why the initial collapse in the 2 bed luxury apartment/future social housing market will spread very quickly into the leafy suburbs and result in repossessions and discounts there. BTL has expanded this bubble into a monster that is going to not only bite the hand of the owner, but devour both arms and legs as well. People who have MEWed their own home to buy a first BTL, then as HPI inflated both properties, MEWed to buy a third and fourth will be so highly geared that they will cause problems with some of the smaller banks who have gone into BTL in a big way as there will be no equity to recover the debts with. The time bomb has now been detonated, this year we will see it explode (at least outside London).

[Gone baby gone]

Cycles only become apparent with hindsight. For how many years have people on this site been calling the peak?

Hmmm, there have been property cycles for the last few hundred years. Don't they usually last about 18-20 years barring major external influences, like World Wars?

[StuB]

Seen this?

http://money.uk.msn.com/Mortgages/BuyToLet...umentid=2617316

[Chaes]

Looks like the banks are well covered then. They will claim the first home equity (if there is any left) to cover themselves when the BTL's get repossessed.

So a single BTL reposession may result in the rest of any portfolio being sold as well as the owners own home.

A nice accelerator effect for the crash.

that is a very good point.