Wednesday, Aug 16, 2006

Buy-to-let borrowing hits new record

BBC: Buy-to-let landlords borrow more

There is now 767,000 buy-to-let mortgages which account for 8% of all current home lending. During the first six months of this year borrowing by buy-to-let landlords hit new records.

Posted by denzil @ 04:00 PM (557 views)
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1. uncle chris said...

The BBC do seem to be on a mission to hoodwink the general population. Granted, some BTL that entered the market 10 years ago will be getting a tidy income - but the majority of those who jumped on the bandwagon in the last couple of years will be subsidising their tenants - as my landlord is kindly doing. Friends of mine have just started renting a 2 bed flat in Essex for 625 per month. They told me that their landlord had just bought the property, so I thought I would check how much they paid on It turns out that the selling price was 192,000, which if you goto a mortgage lender - say A&L - would require an INTEREST ONLY mortgage in the region of 800. Now it's very nice to be subsidised in this way, but I can't for the life of me understand what motivates the new generation of BTL to do so.

Wednesday, August 16, 2006 06:33PM Report Comment

2. Dude said...

You've got to remember that the attitude to renting is seen as 'dead money.' Hence, even if the BTLer is subsidising the tenant, from their perspective the tenant is helping the BTLer to buy the property. The property may increase in value. But even if it doesn't if the BTLer can afford the difference they see it as their gain (and the tenant's loss).

It may be a long term plan, but the general British desire to get loads of money for relatively little effort is the motivation at work here.

Wednesday, August 16, 2006 08:14PM Report Comment

3. Retiredbanker said...

If the British economy were to ever nosedive with massive levels of unemployment, I would not put it past
the government of the day to make it very difficult to evict tenants who could not afford to pay their rent.

With so many problems lurking just over the horizon ( not the least being oil depletion with its huge
potential for creating economic chaos ), I suspect that those who are looking to property to supplement
their pensions are going to be very disappointed.

Wednesday, August 16, 2006 09:04PM Report Comment

4. uncle tom said...

This is without doubt the sector to watch. Interest rate hikes could very easily kill the growth of BTL portfolios - and quickly!

Without new BTL investment, the market will return to the affordability of would-be home occupiers, and not just the 'average' or 'median' home occupier, but the 75% or so who will neither get significant assistance from the state, nor significant assistance from their families (with the possible exception of a one-off 'golden goodbye' to help with the deposit, which seems common now)

Over much of the UK, this will create a big gulf between asking prices, and those that can be afforded.

While it may be taking a long time, the chickens WILL come home to roost!

Wednesday, August 16, 2006 11:46PM Report Comment

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