Saturday, September 22, 2007

BTL is the UK subprime

Run on bank rocks buy-to-let market

"Unofficial numbers suggest BTL lending has become yet more relaxed than this suggests. It seems BTL largely replaced traditional first-time buyers in the market a long time ago and, more than simply not selling, BTL investors now need to keep buying to support the lower end of the UK’s residential property market. The party has gone on far longer than I could have predicted but the fallout from the US sub-prime market is leading to a severe readjustment in risk appetites and ‘the price of risk’. A BTL might be a sensible part of an overall pension plan but now does not look like the time to buy it and investors who did in recent years may have plenty of time to regret it ahead of them." Ah aha hahhah ahahah!

Posted by confused76 @ 10:25 AM (1564 views)
Please complete the required fields.



14 thoughts on “BTL is the UK subprime

  • Written by David Smith. Not the noshbag we’ve all come to love ridiculing from Times Online who is famous for getting things wrong, but someone much better qualified.

    There’s no escaping it, the crash is upon us.

    Reply
    Please complete the required fields.



  • Nope. Same bloke unless they’ve cloned him – look at the picture here and in the Times.

    Reply
    Please complete the required fields.



  • You could be right, but where I live in Essex, all the free papers seem to carry endless adverts for remortgages.

    The people round where I live want a celeb lifestyle and have decided to fund it with ever larger remortgages of their houses, based on the housing bubble.

    When some of my associates took cash from “early retirement” in the late 1990s, they invested in BTLs almost for a hobby. They became sound landlords who have taken their capital gain, selling to a less intelligent breed of “investors” keen to listen to get rich quick stories. My friends rented from one of these. The house was reposessed by the building society and will feature in the next quarter’s stats from the Ministry of Justice.

    I think the current Equity Withdrawal schemes could puncture the housing bubble as people cannot keep withdrawing money once the market starts to slip backwards by a few percent. Repossesions will then start with a vengance. A local EA is currently “staffing up” for just such an eventuality.

    Reply
    Please complete the required fields.



  • Nah, I think it is a different David Smith from David “Oil will soon fall to $40 a barrel” Smith of the Times.

    Reply
    Please complete the required fields.



  • Retracting my above post – i think perhaps they just look similar

    Reply
    Please complete the required fields.



  • David Smith, Economist:

    David Smith, Dork:

    Reply
    Please complete the required fields.



  • Alan,
    sometimes MEWs are a necessity, I know a couple who are MEWing since they cannot afford interest payments (on a multi-million property in London). She left her job. They are using equity to pay interests (this was called “negative amortization loan” in the US) in the expectation that A) interests will go down, B) their take home income will go up.
    Please tell me if this is sustainable!

    Reply
    Please complete the required fields.



  • My Brain Hurts. They do look a bit similar, and it is rather confusing as David Smith Economist “has written freelance for publications including The Times, The Financial Times…” Are you sure they’re not the same?

    Reply
    Please complete the required fields.



  • I think Paul is very wrong.

    Paul wrote “David Smith, Dork:”. I believe it should be “David Smith, Noshbag Extrodinaire:”

    Otherwise a very good post from Paul.

    Reply
    Please complete the required fields.



  • Definately not the same David Smith, IMHO. One is a parrot for VIs in the City, the other talks sense.

    Reply
    Please complete the required fields.



  • su said:
    >>….They do look a bit similar

    Yes, they both look like men.

    Reply
    Please complete the required fields.



  • C76,

    MEWing isn’t wrong in every case. The folk I know who are doing this are all living beyond their means.

    The media encourage this. Many of the remortgage companies are really only interested in getting folk to take out bigger and bigger loans. Many of those taking “consolidation loans” soon build up card debt which they they then convert to a 2nd remortgage loan etc.

    Reply
    Please complete the required fields.



  • Alan
    We agree, it is not sustainable
    What it is worse is that, with the fresh precedent of the USA, in the UK people keep saying “it cannot happen here, because the economy is so strong etc”. B/S! personal debt is 150% the UK GDP!

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>