Thursday, July 13, 2006

BTL mortgages still going strong

Buy-to-let mortgage grows - with more to come

The nightmare for FTBs continues... "While current business levels and future prospects remain buoyant, the research highlights that first time buyer activity continues to be subdued. The proportion of FTB loans arranged declined from 11% six months ago to 9% now. This compares with almost 20% 5 years ago."

Posted by tinecu @ 12:50 PM (717 views)
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11 thoughts on “BTL mortgages still going strong

  • have i read this right?

    FTB mortages at 9% and remortages at 51% of the total mortages.

    BFS

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  • Heh, the market is held up by re-mortgaging and BTLs? Someone correct me if I am wrong but surely both those groups will drop out in true style of the market does suffer even the slighest of shocks? There really does appear to be very little keeping this, heh, pencil on the desk..lol.

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  • tyrellcorporation says:

    I’m staggered FTBs are THAT prevelant! …Are they mad/desperate?

    I guess it’s natural selection at work as the guys that are still buying now are the ones that are going to get ‘eaten’.

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  • oh, remember that STRs who buy back in are FTBs too…

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  • stats at its best. There is no mention of actual volume. For all we know the number of mortgages being taken has gone from tens of thousands to 100s. The percentage of BTLs is increasing? or is it just that the number of FTBs is falling? This is a very strong sign that the market is in a complete mess. And that the VIs are in complete denial.

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  • I always thought that FTBs were the necessary base of a healthy property market. If the FTBs find themselves priced out the whole pyramid falls down.
    But what if in the medium term the trend continues to be a progressive monopoly of house purchases by BTLs and more and more would-be First timers priced out of the market and forced to feed this circle by paying rent.
    The conclusion would be a not-so-distant future of few landlords and millions of Proletarians. What would happen next… any suggestion Ticktocktheredclock?

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  • Please don’t be confused by the current definition of a FTB, yes 9% is strange. I got my 5% FTB discount on production of nothing to sell.

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  • Wannabemigre says:

    FTB want to get onto the property ladder because they are afraid that if they dont get onto the ladder now they never will, when the perception changes to that of falling prices they will wait, and wait until they think that prices have fallen far enough-remember the change in thinking between 1989 and 1995?? anyone, BTL will suffer the same fate, I do remember rents falling in the last housing readjustment, when landlords were desperate to have someone paying the mortgage and to ensure this they dropped their rental prices and arent rents supposed to be a reflection of property value, so in a falling market rents should come down as well. If this government runs out of money, which I think is quite likely, and unemployment starts rising, who will pay the stupid rents that some landlords are already asking for?? Gordon may just have to print more worthless money to balance his books. I do believe that the second reich is just around the corner, £10 for a loaf of bread??

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  • bidin'matime says:

    I find the fact(?) that over half of new mortgages are re-mortgages amazing. I’m sure the VIs would say it’s a sign of a healthy competitive market, which it might be if they were not allowed to borrow more than the one being paid off, but I bet that 99% borrow more. I hear the sound of economic disaster and it goes MEW, MEW, MEW…

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  • I actually don’t think FTBs are waiting, I doubt that any have a choice and that they can’t actually afford to buy anymore.

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  • The longer the market is driven by BTL the harder it will fall. And it has been driven by BTL for quite some time. We hear that yields are falling. Even Ms Begg can’t sell her property at a profit. The BTL sector is failing. A FTB buys a house for a home. A BTL buys a house for an investment. When it becomes obvious that it is no longer a good investment then BTL will stop and pull out of the market. As they are not selling the roof above their heads there is nothing stopping them from selling quickly, possibly dumping multiple houses onto the market. If prices fall a little it will become more obvious that it’s not a good investment and more ex-BTLers will put their (multiple) prooperty onto the market and prices may take a further fall. At this point BTLers might think that the longer they take to sell, the less money they will get, and so they may reduce their prices further. Snowball.

    Because BTLers won’t be selling a home, it will snowball much faster than it otherwise would.

    As an investment, even if it only returns 5% capital growth, that’s 5% on top of something that by any standard measure is unaffordable to most. House prices have already rocketed. 5% of already high prices is a larger sum to someone on the same salary than 5% of reasonable house prices. Affordability means that high prices make it ever more difficult for property to provide an even moderate return.

    The question is how long it will take for the BTL brigade to realise the problem.

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