Sunday, January 21, 2007

More bad sentiment for those BTLers (aw, diddums)

Sunday Times

Buy-to-let investors are in for a rough ride. Higher interest rates mean tough times ahead for all mortgage borrowers, but buy-to-let investors are in for a rougher ride than most. (tee hee!!!) The warning signs are already there. Mortgage brokers are reporting that demand for buy-to-let property is faltering after last year’s two quarter-point rate rises and overstretched landlords are rushing for fixed-rate deals to protect themselves from further increases.

Posted by financial planner @ 02:41 PM (544 views)
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9 thoughts on “More bad sentiment for those BTLers (aw, diddums)

  • “Lower house prices could represent a buying opportunity in some parts of the country …”

    Aspiring BTL investors should practice their skills in catching falling knives in readiness.

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  • The Capitalist says:

    Casio Metro Watford – upmarket, new devpt in which BTL piled in and now are getting reposessed…

    A correction (crash) starts at the margins…next up FTBs who lied about their incomes…but were told you can’t go wrong with property and encouraged to borrow by banks.

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  • Hmm, promising headline but turns a bit positive at the end for my liking.

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  • little professor says:

    “Income from rent is also drying up. Annual rental yields hit a five-year low of 5.74 per cent, down from 7.1 per cent in 2002.

    Concern is mounting that borrowers who took advantage of more relaxed lending criteria throughout last year are now in danger of struggling to fund their investments, particularly for the 92 per cent of investors that also have mortgages on their own homes.”

    No sympathy at all. I can’t wait to see this greedy lot as they realize the sand underneath them is starting to slip…..

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  • financial planner says:

    Borrowers are less encouraged (lied to) by banks and more by mortgage arrangers ie mortgage brokers (eg John Charcol) and so called mortgage advisers (sic!) and financial advisers (also sic!)

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  • dohousescrashinthewoods says:

    I spotted an interesting quote from a BTL chap in the Mail on Sunday which suggested that neither yield nor capital appreciation are concerns.

    He effectively said it’s a replacement for a pension (annuity) – providing the flats pay for themselves, once the mortgages are complete he can retire and live on the rental income.

    Sadly for HPCers, it looks like these guys can go down to 0% yield and even negative equity, but providing they can make the payments they aren’t too bothered.

    He also said he is buying flats at a discount through a bulk buyer an that’s what makes it viable.

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  • Arn’t most buy to let mortgages interest only?

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  • Cheekie Charlie says:

    doHPCinthewoods
    Allthough this chaps arguments seem sound what we are forgetting is as long as the British public view the housing market as a similar vehicle to the stock market which once prices stop rising and bad news and sentiment starts they will inevitably behave like lemmings. Although the language of the BTL brigade has recently become stubborn what sort of businessman holds onto depreciating assett when there’s money to be made elsewhere? A pretty stupid one!

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  • tyrellcorporation says:

    As I’ve mentioned in the past, ‘in it for the long-term’ phrases are fine when the market is growing or even stagnant. A falling market is an entirely different matter – I don’t beleieve there would be many people happy to sit by and lose hundreds of pounds a week!

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