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Frank Hovis

1980s Lloyd's Of London Comparison With Btl

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With Martin Johnson signing up as a BTL landlord I have this tremendous sense of deja vu.

This is just sounding more and more like the Lloyd's names committee work in the mid 1980s where a lot of celebrities and non-celebs with more money than sense signed up to be names because it was a golden opportunity to make money.

They never questioned why what was an effectively members' market was suddenly throwing open the doors to everyone who could write a sufficiently big cheque.

Now BTL had for a long time been the preserve of professional landlords who knew their markets and didn't overreach themselves. They researched properties fully and knew what rental income they could achieve.

Over the last 5 years amateurs have piled in on the grounds that if somebody else is making money on this they can too and the developers are (obviously) encouraging this.

It became clear in the late 1980s that these new Lloyd's names had been sold a pup. They had unwittingly taken on enormous and under-reserved asbestosis and pollution liabilities that they knew nothing about and couldn't get out of. They were also hit by the spiral market (a whole subject in itself) which meant that a lot of the real business they thought they were writing was effectively fictitious. The amateurs took a massive bath and there were pictures in the paper of Henry Cooper selling his Lonsdale belt and other sports stars auctioning off their medals.

This is what happens when amateurs are advised by professionals to put their money on a sure bet.

I await the "BTL crisis" headlines, there have been a few early cases already.

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Thats really odd, just talking about the Lloyds fiasco and all the names taken for all their money- the Mps, celebs etc, which led to lloyds taking limited liability names in 1992 I think. Professional names walked scott free due to the spiral trades and lay off of the liabilities.

The advice was the same then a it is now, when the guy in the pub says "Get into this you cant fail, look how much Ive made" its time to take his kind pint and advice and walk away!

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It was Martin Johnson that triggered the comparison.

Two markets that professionals make money in suddenly opening up and inviting in anybody with money.

Could it be so that they can take it off them? Surely not.

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Just to be clear, you are not suggesting that Martin Johnson is going to be one to lose out in his BtL adventure (so why it made you think of the Lloyds of London situation I am not sure)?

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Hello

I'm sorry but am I not right in thinking that Johnson only has one and he has owned it for the best part of 15 years. Hardly BTL amateur.

Don't mean to piss on anyones parade, just want to keep the line between fact and fiction clear. People can get caried away on here.

I agree, that the Johnny come lateleys will be the ones to suffer, not the Martin Johnsons of this world.

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With Martin Johnson signing up as a BTL landlord I have this tremendous sense of deja vu.

This is just sounding more and more like the Lloyd's names committee work in the mid 1980s where a lot of celebrities and non-celebs with more money than sense signed up to be names because it was a golden opportunity to make money.

They never questioned why what was an effectively members' market was suddenly throwing open the doors to everyone who could write a sufficiently big cheque.

Now BTL had for a long time been the preserve of professional landlords who knew their markets and didn't overreach themselves. They researched properties fully and knew what rental income they could achieve.

Over the last 5 years amateurs have piled in on the grounds that if somebody else is making money on this they can too and the developers are (obviously) encouraging this.

It became clear in the late 1980s that these new Lloyd's names had been sold a pup. They had unwittingly taken on enormous and under-reserved asbestosis and pollution liabilities that they knew nothing about and couldn't get out of. They were also hit by the spiral market (a whole subject in itself) which meant that a lot of the real business they thought they were writing was effectively fictitious. The amateurs took a massive bath and there were pictures in the paper of Henry Cooper selling his Lonsdale belt and other sports stars auctioning off their medals.

This is what happens when amateurs are advised by professionals to put their money on a sure bet.

I await the "BTL crisis" headlines, there have been a few early cases already.

My father was advised to go into Lloyds by his then business partner. He said absolutely no, unlimited liability scared him. His business partner was wiped out by Lloyds.

Mind you my father got out of that business became a business angel and got wiped out as one after another his companies went under during the ERM recession of the early 90s.

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My father was advised to go into Lloyds by his then business partner. He said absolutely no, unlimited liability scared him. His business partner was wiped out by Lloyds.

Mind you my father got out of that business became a business angel and got wiped out as one after another his companies went under during the ERM recession of the early 90s.

C'est la vie :rolleyes:

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Nice to see so many here who remember Lloyds and the ERM scandals. I think that most who have gone into BTL have dones so as a result of reading about it or hearing of someone who has done it and is making money. Hey, even TV programmes are probably to blame.

I know several minor celebs who have invested heavilly in property. They are all Welsh though and most people in Wales have never heard of them so I won't bother wasting your brain cells with their names here.

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Nice to see so many here who remember Lloyds and the ERM scandals. I think that most who have gone into BTL have dones so as a result of reading about it or hearing of someone who has done it and is making money. Hey, even TV programmes are probably to blame.

I know several minor celebs who have invested heavilly in property. They are all Welsh though and most people in Wales have never heard of them so I won't bother wasting your brain cells with their names here.

What are the accepted methods of learning about an investment opportunity then?

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