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silver surfer

Btl's Still A Worry

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Personally I'm convinced this crash has started, and recent BTL landlords will lose a lot of money unless they sell up quickly. But I'm still concerned about the impact of BTL over the long term.

In a few years, when house prices in inflation adjusted terms are down to about 60% of today's prices, then we could see a second wave of BTL. One which pumps house prices right back up, and in a much shorter time than the 12 years it took to go from the 1995 low to the 2007 high.

And with every future cycle of house price boom and bust another share of the british housing stock will move permanently from the residential sector into the private landlord sector (at the bottom of this next crash I'd guess there will still be more BTL properties than at the bottom of the last crash).

So even though this crash will re-calibrate the market, and give a window of opportunity for first time buyers to get on the housing ladder, in the long term we could see a new and growing class of private landlords who will be astute enough to only add to their portfolios during market lows. They'll be like the landowning farmers of previous generations versus the tenant farmers, who were never able to earn enough to acquire land of their own.

My own prediction is that we'll see the next house price low in about 2012, coincidentally when one of my children should be at university. If the housing market really is on its knees then I'll act as a mortgage guarantor to ensure she buys rather than rents, unless that is there's new tax legislation that removes the incentive to do so. For the sake of the equality and meritocracy of future generations I hope those barriers will be in place.

If future generations are to be divided into property owners and non-property owners, like previous generations were divided into landowners and tennants, then I know which side of that divide I want to place my family. But best of all would be if no divide occurs, and the growing equality that we saw during most of the second half of the 20th century could continue. However for that to happen surely we'll need a change in legislation to prevent an even bigger BTL landgrab next time than we've seen this time.

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Personally I'm convinced this crash has started, and recent BTL landlords will lose a lot of money unless they sell up quickly. But I'm still concerned about the impact of BTL over the long term.

In a few years, when house prices in inflation adjusted terms are down to about 60% of today's prices, then we could see a second wave of BTL. One which pumps house prices right back up, and in a much shorter time than the 12 years it took to go from the 1995 low to the 2007 high.

And with every future cycle of house price boom and bust another share of the british housing stock will move permanently from the residential sector into the private landlord sector (at the bottom of this next crash I'd guess there will still be more BTL properties than at the bottom of the last crash).

So even though this crash will re-calibrate the market, and give a window of opportunity for first time buyers to get on the housing ladder, in the long term we could see a new and growing class of private landlords who will be astute enough to only add to their portfolios during market lows. They'll be like the landowning farmers of previous generations versus the tenant farmers, who were never able to earn enough to acquire land of their own.

My own prediction is that we'll see the next house price low in about 2012, coincidentally when one of my children should be at university. If the housing market really is on its knees then I'll act as a mortgage guarantor to ensure she buys rather than rents, unless that is there's new tax legislation that removes the incentive to do so. For the sake of the equality and meritocracy of future generations I hope those barriers will be in place.

If future generations are to be divided into property owners and non-property owners, like previous generations were divided into landowners and tennants, then I know which side of that divide I want to place my family. But best of all would be if no divide occurs, and the growing equality that we saw during most of the second half of the 20th century could continue. However for that to happen surely we'll need a change in legislation to prevent an even bigger BTL landgrab next time than we've seen this time.

This is a good point. However, I don't think things are ever going to get back to the way they have been. ?...!'s analysis on the ratio of the cost of servicing the nation's debt to its GDP will (should) keep a break on things in the future as will the onset of oil scarcity and, later on, climate change.

In the meantime, if the BTL-ers become scapegoats by the general public (as well they should!) when house prices crash then hopefully legislation will be introduced to curb profligate BTL behaviour in the future...

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My own prediction is that we'll see the next house price low in about 2012, coincidentally when one of my children should be at university. If the housing market really is on its knees then I'll act as a mortgage guarantor to ensure she buys rather than rents, unless that is there's new tax legislation that removes the incentive to do so. For the sake of the equality and meritocracy of future generations I hope those barriers will be in place.

If future generations are to be divided into property owners and non-property owners, like previous generations were divided into landowners and tennants, then I know which side of that divide I want to place my family. But best of all would be if no divide occurs, and the growing equality that we saw during most of the second half of the 20th century could continue. However for that to happen surely we'll need a change in legislation to prevent an even bigger BTL landgrab next time than we've seen this time.

Its doubtful that the government will put tax pressures in place to destroy the BTL market. The government is relying on the BTL market to provide social housing which it is no longer providing.

The government no longer builds council houses so its all down the BTL landlords to fill the gap.

As LL leave the BTL market, there will be more houses on the market. The flip side of this is that there will be less rental properties and therefore the choice and quality of the housing will fall while the rental prices will rise.

In the crash, almost everyone will lose

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My own prediction is that we'll see the next house price low in about 2012, coincidentally when one of my children should be at university. If the housing market really is on its knees then I'll act as a mortgage guarantor to ensure she buys rather than rents, unless that is there's new tax legislation that removes the incentive to do so. For the sake of the equality and meritocracy of future generations I hope those barriers will be in place.

Tying yourself down with a mortgage and responsibilities of a property at such a time in life is not a good plan, unless you daughter is going to BTL that is.

I don't know if you remember the private rental sector 20 years ago. The properties you could rent were grotty and expensive. Since BTL the choice of rental property has improved greatly. For any young professional who may move jobs a number of times this has been a boon. I don't really buy the "It's the BTLers wot dunnit" line. We've seen house price increases in many countries since the loosening of credit post 2001 without either a housing shortage or BTL being a major factor.

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