Sunday, June 4, 2006

Are investors moving back into buy-to-let?

Investors dump shares to buy property

The "Times" journalist and BTL evangelist Clare Francis gets the front page of the money section of the Sunday Times with this particularly piece of one-side journalism. Her sources for this piece are Paragon specialist mortgages, The association of letting agents, UCB Home loans (The BTL arm of Nationwide), Landlord Mortages. Oh, BTW a broker and an IFA get a sentence each at the end of the piece.

Posted by denzil @ 11:01 AM (602 views)
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3 thoughts on “Are investors moving back into buy-to-let?

  • Hook Line And Sinker says:

    Clearly, the author of this article has very little knowledge of economics.

    With rental yields falling quite significantly in almost all major UK cities, interest rates on an upward tend across Euroland and the US (to protect their falling dollar) and evidence of zero growth in property appearing in Australian and American hotspots, the question is why buy into the market when we are obviously at the very peak?

    The bust that will inevitably follow the recent boom will make the troubles of the 1990’s look like a picnic.

    As sellers rush for the exit, they will face a buyers market, reluctant to saddle themselves with 50 year mortgages – happy to rent until the dust settles.

    The percentage of first time buyers has now dropped to below what is required in a liquid market. This is the clearest signal yet to jump off the good ship Buy to Let.

    The smart money has already left the building.

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  • >>The smart money has already left the building.

    I agree with that but what where do the FTB’ers live? I doubt whether they are all at home frantically saving for the day they may be able to afford a place. The are the renters of the social parasite the BTL Landlord. In many ways the whole BTL thing stinks of protectionism. Keep inflating prices so the FTB has to rent.
    The younger generation are being shafted but sadly enough the political parties do not care because this group are the least likely to vote.

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  • Rental yields are falling. FTBers that are having to rent cannot pay a rent that will cover the landlords mortgage. The landlords cannot raise the rent otherwise their property will remain empty and they will lose money every day it’s empty. There is a reason that yileds are low, and that is because BTLers are paying more for property than they can recover from rent. And interest rates haven’t even gone up yet!! There is oversupply due to the greed of the BTL purchase rush. Things are turning now even without IR raise. That is why a tiny rise will have a massive affect. This year is the year of the crash – I am certain.

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