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Buy To Let Experts: 2008 Is The Year Of Opportunity

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Interesting blog!

http://www.propertysecrets.net/blogs/max_g...n/post-139.html

The Homebuyer Property Investor Show 2008.

One of the most interesting and best quality debates took place on the first day of the show and was packed - again, as we might expect, given the title: 'Is the UK Buy-to-let sector facing its Armageddon?'

The discussion panel consisted of Seamus Nugent of property developers Dandara, John Wrigglesworth, of Wrigglesworth Ltd, Ray Boulger of John Charcol, David Austin of Property for Life and Neil Lewis, our own CEO.

And, while Neil Lewis appeared to be the only bear on the panel, Neil I think would be the first to admit that he wasn't writing off the UK market, but talking about where the best opportunities lay over the next 24 months or so. And that isn't in the UK.

The rest of the panel unanimously saw 2008 as a time of opportunity - a time to buy in the UK. Only some 30% or so of the audience agreed with them, as a show of hands proved at the end of the seminar.

John Wrigglesworth described himself as at the optimistic end of the spectrum. While there was certainly a slowdown in the UK property market, the fundamentals of the market were the same as ever - it was just that funding had dried up. :lol::lol:

John saw a huge distinction between the US and the UK markets and blamed the 'stupidity of the international market who can't tell the difference between the US and UK.

'People are not stretched in terms of affordability. This is not a structural economic problem,' and 'sense would prevail by the end of the year.'

'Rents are rising because of affordability problems, prices are weak, yields are rising. This is a great opportunity to buy. 'And the credit criteria is only going back to where it was three years ago.

Seamus Nugent essentially agreed with the view that the 'fundamentals in the UK are strong' and that the market there cannot be compared to those in Ireland or Spain where huge oversupply had taken place.

In fact, Seamus saw aspects of the credit crunch on the BTL market in the UK as positive. :lol::lol: 'There were people who wanted to get into BTL with no money down. They're gone. Good!

David Austin, of Property for Life, believed the UK was now a 'buying opportunity' and that the market would 'pick up by the end of the year

The panel of experts? more like the panel of comedians. I love the excuse of John Wrigglesworth that the problem is the funding had dried up :lol: but he still claims that the fundamentals of the market were the same as ever. What a charlatan!

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In fact, Seamus saw aspects of the credit crunch on the BTL market in the UK as positive. 'There were people who wanted to get into BTL with no money down. They're gone. Good!

What a fantastically double-edged statement.

For the long term, professional landlord, who was in the market before the bubble, didn't buy the bubble, and actually understands the whole "buy low and hold" thing, yes, it's great news. A crash will be good for the professional, as it'll open more buying opportunities.

However, for the vaste hordes of amateurs who're depending on "capital growth" to make their investment worthwhile, it's absolutely terminal. How Seamus expects speculators to take profit when the supply of greater fools is being rapidly turned off I really don't know.

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Some people still do see BTL as an opportunity.

I have just sold another one of ours to one of them, on Tuesday. Bought for £59K in 1997, sold for £210K 11th March 2008. OK, last summer might have got £240K (so said a couple of EAs anyway, so it must be true!).

But I don't care, really.

He wants to buy the other one we own in the same building, in the next few weeks as well.

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'People are not stretched in terms of affordability. This is not a structural economic problem,' and 'sense would prevail by the end of the year.'

'Rents are rising because of affordability problems...'

:huh:

Did I read that right? Housing is affordable so it won't crash, but it's so unaffordable that rents are going up?

I hope the 30% who showed their hands in agreement with this clown were swiftly removed by the men in white coats.

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The whole BTL investment concept was based on the growth in the capital value of properties, with rents mainly used to pay off loans etc.

So built into BTL from the start is the idea that there's a right time to get out as well as to get in. That time seems to be...yesterday!

I suppose if you're a cash buyer, with no loan, the rent only needs to cover the running costs, so one could go in on the basis of profit from rent and hope that the price recovers from any downturn in the longer term/

Edited by conifer

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What a fantastically double-edged statement.

For the long term, professional landlord, who was in the market before the bubble, didn't buy the bubble, and actually understands the whole "buy low and hold" thing, yes, it's great news. A crash will be good for the professional, as it'll open more buying opportunities.

However, for the vaste hordes of amateurs who're depending on "capital growth" to make their investment worthwhile, it's absolutely terminal. How Seamus expects speculators to take profit when the supply of greater fools is being rapidly turned off I really don't know.

Agreed.

Although many of the amatuers bought BTL "as a pension", they will have to have nerves of

steel not to give way as their capital value shows signs of tumbling, particularly if they bought

into the BTL market any time after about mid 2004.

My experience is that very few have the nerve to watch their asset fall in value to the point where

their loss increases daily.

Most will, at some point, cave in and sell out of desperation to salvage the remains of their fading

investment.

Many are already subsidising their "pension property" from their salary, in any case,

and feverishly making calculations involving Capital Gains.

I shall be very surprised if there is not a deluge of BTLs on sale from now onwards.

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I can't believe what a fool I was to STR in June 2007.

John Wrigglesworth is clearly correct in everything he says, if only I'd listen to him sooner.

I now intend to buy the biggest house I can with my STR money and a large interest only mortgage.

...and if you believe that...

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Shame I have to pay to leave a comment on there - obviously they don`t want the `non-believers` expressing an opinion!

Some dumb motherf*cker left a comment that you`re supposed to buy `when there`s blood on the streets`. If there`s any blood on the streets then would that not indicate a major accident or civil unrest; better still, how about loads of BTL landlords being beheaded sequentially by the Saudi Arabian Synchronised Beheading Team (expect to see a rash of golds in London as the infidels are beheaded!) (The event will not take place in China as you don`t want to decapitate potential customers!)

As for me, I think I`ll chill in a seriously deep nuclear bunker and spend my time coding PIC chips in Assembler :rolleyes:

ROOOOOOOOOAAARRRRR (of disapproval)!

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Some people still do see BTL as an opportunity.

I have just sold another one of ours to one of them, on Tuesday. Bought for £59K in 1997, sold for £210K 11th March 2008. OK, last summer might have got £240K (so said a couple of EAs anyway, so it must be true!).

But I don't care, really.

He wants to buy the other one we own in the same building, in the next few weeks as well.

:lol::lol::lol:

I take it you have not shared your views on the market with the sucker?

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Did I read that right? Housing is affordable so it won't crash, but it's so unaffordable that rents are going up?

I don't see those as mutually exclusive. (The rest of what he says may well be rubbish, but I what you wrote is too.)

Group A are poor. They cannot afford to buy, so rent. More and more STR/don't FTB, so demand increases so rents rise.

Group B are BTL landlords. They see rents rising so BTL becomes economically viable.

Prices are thus supported.

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I don't see those as mutually exclusive. (The rest of what he says may well be rubbish, but I what you wrote is too.)

Group A are poor. They cannot afford to buy, so rent. More and more STR/don't FTB, so demand increases so rents rise.

Group B are BTL landlords. They see rents rising so BTL becomes economically viable.

Prices are thus supported.

Yeah, prices are supported if you bought a good few years ago and have loads of equity and the rent covers the mortgage and maintenance and voids.

If you're one of the many who got in late, who raised the deposit by taking a second mortgage on your own home, who maybe leveraged the apparent equity in your BTL to buy another couple ... who has say 600ks worth of mortgages against 3 flats you paid 200k for which are falling in value every day ... whose rent does not cover the mortgage ... whose fixed rate mortgages are going to reset much higher ... etc etc blah blah ...

you are shafted

Yours will be the ones that get repossessed and the other oiks will not buy them because they cannot get the credit.

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Group A are poor. They cannot afford to buy, so rent. More and more STR/don't FTB, so demand increases so rents rise.

If they STR, then they're not poor. And STR / delaying FTB doesn't necessarily have a net effect on rental demand. If you look at a given property transaction, or chain of transactions, nobody is magically appearing out of a haystack to fill an empty house at the bottom and no-one is ending up on the streets having moved out of the house at the top. In the "before" picture and in the "after" picture, everyone still has a roof over their head. On average, if someone moves from an owner-occupied house into a rented house then either someone else must simultaneously be doing the opposite, or a house must be changing use from owner-occupied to privately rented.

There's certainly the potential for a small blip in rents because of the lag inherent in the system, but the rental market adjusts quickly. (In the US, rents are stagnant or falling despite the collapse in prices.)

As for delaying FTBs - I have been "renting and not buying a house" for the last five years. Does that mean I've been pushing up rents? I don't think so, otherwise my rent would have risen during that time (it hasn't).

Group B are BTL landlords. They see rents rising so BTL becomes economically viable.

Except that nobody will lend them money to buy houses any more.

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Interesting blog!

http://www.propertysecrets.net/blogs/max_g...n/post-139.html

The panel of experts? more like the panel of comedians. I love the excuse of John Wrigglesworth that the problem is the funding had dried up :lol: but he still claims that the fundamentals of the market were the same as ever. What a charlatan!

I note you have a few quotes as sigs.

Times change and 2008 may well be a year of opportunity. For every winner I assume also a loser exists.

If ppl str I would assume rental property would become harder to come by.

For a long time I have tried to get this message across but it falls on deaf ears.

A little more is required in the soup- credit? It aint there.

Rental property should start to increase if I'm right.

I still have my money on Sept 08 to run at negative figures across the board.

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If they STR, then they're not poor.

Quite. So they can afford higher rents. Landlord happy.

And STR / delaying FTB doesn't necessarily have a net effect on rental demand. If you look at a given property transaction, or chain of transactions, nobody is magically appearing out of a haystack to fill an empty house at the bottom and no-one is ending up on the streets having moved out of the house at the top. In the "before" picture and in the "after" picture, everyone still has a roof over their head. On average, if someone moves from an owner-occupied house into a rented house then either someone else must simultaneously be doing the opposite, or a house must be changing use from owner-occupied to privately rented.

I know it seems as though on average there should be no effect, in fact it can very easily; people do magically appear out of - and disappear into - haystacks. Divorce. Moving in with parents. Lodging, not buying. Renting, so not taking in a lodger.

BTL houses sitting on the market are empty - reduced supply.

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It is difficult to imagine a worse time to invest in property than at the beginning of a worldwide property crash. IN my "expert" opinion it would be prudent to sit things out for at least 3 years or so.

But then agian, I am not trying to earn a commission so my "expert" opinion is bound to be the opposite to the "experts" who make money selling BTL loans.

I wonder what constitutes expertise these days?

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Quite. So they can afford higher rents. Landlord happy.

I know it seems as though on average there should be no effect, in fact it can very easily; people do magically appear out of - and disappear into - haystacks. Divorce. Moving in with parents. Lodging, not buying. Renting, so not taking in a lodger.

BTL houses sitting on the market are empty - reduced supply.

Not sure what you're saying here but try this.

25 years ago, a friends parents moved out of a house in my home town because they had an offer they could not turn down. The house is still empty after 25 years, I would say half a million at todays prices (land and pc). The bits around it get snapped up as they come on the market but still the whole area is a dump. So, to my mind, some guy has a plan and money to burn.

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It is difficult to imagine a worse time to invest in property than at the beginning of a worldwide property crash. IN my "expert" opinion it would be prudent to sit things out for at least 3 years or so.

But then agian, I am not trying to earn a commission so my "expert" opinion is bound to be the opposite to the "experts" who make money selling BTL loans.

I wonder what constitutes expertise these days?

:P

I made a bit in my 'expert' days as well. Stocks , shares and the like <_<

I would not put all my eggs in any one of todays markets though.

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The whole BTL investment concept was based on the growth in the capital value of properties, with rents mainly used to pay off loans etc.

So built into BTL from the start is the idea that there's a right time to get out as well as to get in. That time seems to be...yesterday!

I suppose if you're a cash buyer, with no loan, the rent only needs to cover the running costs, so one could go in on the basis of profit from rent and hope that the price recovers from any downturn in the longer term/

Why would you do that when bank shares are paying over 8% at the moment and are just a phone call away from liquidity. Meanwhile your BTL flat halves in value and is on the market for 3 years? why oh why would you invest in anything paying you less than an 8% yeild. madness.

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  • 292 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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