Saturday, July 28, 2007

Doh!!

Interest rate rises fail to dent buy to let confidence in the lobotomy club

At what point to buy to let players finally 'get it'? Property is no longer rising in value (other than small pockets of opportunity throughout the UK), rents are static - if not falling ironically due to the increased competition provided by buy to let investors, and buy to let interest only mortgages currently have an average 'tag' of 8.5-9% meaning for every 100K borrowed they need to achieve £850-£900 per month rent simply to stand still...Madness...

Posted by converted lurker @ 12:29 PM (2956 views)
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3 thoughts on “Doh!!

  • People were still flocking into dotcom for at least 12-18 months after it made sense to do so.
    BTL probably makes a small amount of sense in a few enclaves mainly due to supply and demand issues.
    I know of a few people in the Bristol area whose landlord has attempted to raise their rents and they have simply found somewhere else to live. In one case the tenent said he would hand in his notice and the landlord instantly backed down.
    I think a lot of the very recent “BTL makes sense” articles are generated by those with a vested interest in BTL. We say last week the B&B reckoned their BTL mortgages gross lending was higher than residential. Just goes to show what is propping the market up.

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  • planning4acrash says:

    A long term investment is a short or medium term one that’s going south for a decade!

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  • converted lurker says:

    15% of mortgages in 2005 were BTL from being less than 1% a decade ago, do not underestimate the seismic shift that has been and just how many caught on to the BTL money for nothing craze 2004 onwards. A 25% correction and most of the equitable profit in these ‘investments’ evaporates. The job losses in the industry if BTL simply ‘goes’ will be massive, 15% of jobs at least? If not more…
    Sales departments now drive editorial comment, check out the utter drivel written by the Telegraph and Scotsman today, lenders have spent massive amounts to buy those column inches, that’s a lot of pull and they won’t let go easily….

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