Tuesday, Sep 05, 2006

Another laughable survey from a VI

inthenews.co.uk: Buy-to-let investors 'in it for the money'

Investors in Britain's booming buy-to-let sector expect high yield levels over and above the mortgage costs of their property, according to new research from lender Mortgage Trust.

Findings revealed that upbeat buy-to-let investors are increasingly looking for lower rental income requirements and higher loan to value loan limits.

Nicola Severn, Mortgage Trust's marketing manager, said that the results "display a strong confidence in the buy-to-let market".

"It is obvious from our findings that the appetite for buy-to-let investment shows no sign of waning. With rental demand remaining strong and house prices continuing to climb, it is no surprise that buy-to-let investors are keen to secure higher loan-to-value loans and release equity in order to maximize their investment potential."

More neutral account from the London Stock Exchange here: http://www.londonstockexchange.com/en-gb/pricesnews/investnews/article.htm?ArticleID=17585010

Posted by little professor @ 01:02 AM (506 views)
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6 Comments

1. the bald man said...

Who in the current market would want higher loan to value limits? This is just gearing up for bankruptcy. Memries are very short.

Tuesday, September 5, 2006 09:29AM Report Comment
 

2. Jake The Muss said...

Yet in the Sunday Times last weekend, RICS said the ROI for BTL's was a only 3.6%, well below the cost of borrowing. What bank would lend further against a property that was already showing a negative return?

Is there anything in the small print of a BTL mortgage that allows the lender to ask for a lump sum repayment(s) in the event of the value of the property declining?

Tuesday, September 5, 2006 12:34PM Report Comment
 

3. Bigshot said...

This is one of the tell tail signs of a bubble about to burst. There is a sudden flurry of investment by investors with many people jumping on the band wagon and taking big risks to get a part of the actions. They will be dissapointed by not considering the bigger picture.

Tuesday, September 5, 2006 12:42PM Report Comment
 

4. rich said...


Bubbles are caused by people having an irrational opinion of the value of an asset. If markets were "perfect", i.e. informed and rational, there wouldn't be so many (if any) bubbles.

You can see it in the reaction you get if you tell the majority of people you think house prices are going to go down. They think you're delusional, but only have feeble justifications for their belief. It's taken on faith (and a little VI spin) that prices will continue upward, much like the faith that increased prices are a good thing.

People want higher loan to value limits because of the same delusion that causes bubbles in the first place.


Tuesday, September 5, 2006 05:06PM Report Comment
 

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