Sunday, November 4, 2007

Landlords crying on the phone on the phone to me regularly …

A survivor’s guide to buy to let

"Harry Dhaliwal at Belvoir Lettings in Manchester said: “I have landlords crying on the phone to me regularly. They are being forced to sell but because so many developments are still being built, they are struggling to find buyers.” "
There si some great advice here like; Go interest only; re-mortgage your main home... and best of all
"Advisers recommend that investors who do not need to sell should sit out any property slow-down, especially as there could be a silver lining: rental demand is expected to go up as first-time buyers who are priced out of the market opt to rent instead."
Don't you just love BTL speculators. Fear and Greed is what is driving BTL.

Posted by voiceofreason @ 09:31 AM (2155 views)
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26 thoughts on “Landlords crying on the phone on the phone to me regularly …

  • “New-build flats in cities such as Nottingham, Birmingham and Leeds, which have been highly popular with landlords, are selling for as much as 35% less than their value just a year ago.
    Buy-to-let investors who have not built up much equity may therefore have mortgages worth more than their properties – so-called negative equity, which has not been seen in Britain since the recession of the 1990s.
    Estate agents report more landlords needing to sell because they can’t find tenants, or because interest-rate rises mean their rental income no longer covers their mortgage repayments”

    Ahhh aaaaaaaaaahhhh aaaaaaaaauuuaaaaaaaaaaaaaauuuaaaaaaaaaaaaaaaaaahhhhhahhhahhahhahuuuuuuuaa ahaha uaha ahah
    my bricks are my pension…. uuuuuuuuuuuaaaaaaaaaaaaaaahhhhhhhaaaaaaaaaaaaahhhhahhhahhhhhhhhhhahhhh
    then eat bricks when you retire …. uaaaaaaaaaaaaahhhahhhhhh ahhhhha hhhhhhhhhhhhhhhhhhh

    sorry I think this is the most intelligent comment to the current situation one can possibly make.
    for too many years we have been saying very sensible things on this site being called doommongers just because warning people of the risks of debt leverage, interest rate rises, the illiquidity of the property assets, risks of overinvesting in just one asset class. Now I have decided to stop preaching and just sit tight and watch scores of “investors” washed away in this new Dutch tulip disaster. If I could help I probably would (or maybe not) but I think BTLers are beyond help at this point. To the “be careful what you wish for” brigade I say: folks, a house price crash is painful in the short term (maybe more painful for some) but highly needed for the country social stability, long-term competitiveness and growth. Gordon’s dream of UK as a Luxembourg of the North Sea is flawed by his short sightness. He is a recently converted old union leader, like his pal Red Ken, like kids who have just discovered a new toy: capitalism. Capitalism is using these clowns for its purposes and will flush the toilet when these buffoons are not needed anymore. And – at any rate – a HPC is simply unavoidable. If you do not agree with me, that s fine too.

    But now let me go, I have to keep laughing… uaaaaaaaaaaahhhahhhhh ahhhhhhhhhhhhhhhhhhhhhhhh

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  • “Advisers recommend that investors who do not need to sell should sit out any property slow-down, especially as there could be a silver lining: rental demand is expected to go up as first-time buyers who are priced out of the market opt to rent instead”

    This statement assumes that all unsuccessful FTB’s currently live with parents ? Logic would suggests that a significant proportion of FTB’s are already renting, and will continue to do so until homes (not investments!) are affordable. So where will the upward pressure on rents come from ?

    …and regarding affordability, I’m sick of politicians banging on about the need for affordable housing without actually expressing the obvious : – for homes to be affordable, either the prices must be much lower, or wages/salaries must rise significantly.

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  • oooopsssssssssss..

    The price is right
    http://property.timesonline.co.uk/tol/life_and_style/property/buying_and_selling/article2785432.ece

    As I long anticipated… is it true that we are not building enough homes? [email protected]!
    “gentrification”, conversion of old slums to “prime areas” is bringing more supply to the market than any growth in real demant (i.e. with sufficient money to buy)

    “Nor is it just this particular north London enclave, beloved of the polenta-eating and prosecco-drinking classes, that has been gentrified: the knock-on effect has been felt in nearby Hackney (E8/E9), as well as in Stoke Newington (N16), which has become one of the most upwardly mobile places in the capital in the past few years.”

    gentrify, gentrify, open restaurants and wineries, no need for planning permissions, gentrify –> creat a big glut of supply at the right price and crash the price of the other parts of London!!!!
    By the way, did you know that prices are falling fast where?…. not in Hackney, not in Clapham but in Chelsky!! amazing how I called this right a year ago! Of course why buying in Chelsea anymore if I ve got so much choice in London at less than half the price

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  • I like the line in the article “you could consider releasing money from your main home and use it to reduce the mortgage on the buy-to-let. It is this robbing Peter to pay Paul, buy now and pay later attitude that is partly responsible for this whole sorry situation.

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  • japanese uncle says:

    This is a scoundrel’s advice you can find in casinos throughaout the world. “Sorry kid for the tough luck. But you played at your own risk, didn’t you? Anyway you tasted a once-in-a-lifetime sweet dream of becoming an instant property millionare albeit for a short while. It was not bad, was it? I can arrange a discount for a rope, if you like. We have a good reputation as provider of excellent after-sales care and service”

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  • With regards to first time buyers renting, its equally posible the UK economy will turn T*Ts up, lots of the immigrants will return to their homes and rents will plumit

    Just a thought!

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  • Two words for the poor, little, struggling BTLers. Caveat emptor.

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  • I wonder whose chestnuts will be roasting this month.

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  • With news about the taxpayer bailing banks out on what appears to be a regular basis nowadays it would seem only sensible that the cost of borrowing needs to be made more expensive. We wouldn’t want foreign investors to loose confidence in our currency now would we.

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  • Capitalism is using these clowns for its purposes and will flush the toilet when these buffoons are not needed anymore.

    Absolutely right.

    Now, will all of you who still think we live in a democracy please explain to me how we vote this mysterious, overwhelming, and dangerous political force out of power?

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  • I think we should get some T shirts printed with “I’m in it for the long term” written on the front…

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  • “Most buy-to-let investors will benefit from a lower rate of capital gains tax (CGT) when the rules are changed next April. If you need to sell now, you could defer paying CGT by rolling profits into an enterprise investment scheme (EIS).”

    prepare for the April sell off!!!!!!!
    or sell now and roll your profit till April
    in any case the message is clear: SEEEEEEEEEEEEEEEEEEEEEELLLLLLLLLLLLLLLLLLLLLLLLL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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  • Three out of the four BTL ‘investors’ I personally know are all in their late 50’s to early 60’s and view it as a last chance means of funding their retirement after loosing out in the pensions stakes as ‘old industry’ companies folded at the back end of the 1990’s. They have stood no chance of filling the holes in their pensions after the dot com bust and viewed this as the last chance saloon to avoid a meager retirement. No wonder the guy has people in tears on the phone as the have systematically been conned/deluded by the property spivs / media / inside track types who prey on those who need / want a make money quick solution to their finances. Sadly sitting it out although basically sound advice for a younger investor is not the solution the Silver BTL Investors require as many won’t be around or have the financial reserves to make it through.

    The financial sharks have fed well and will quickly move on to hunt down their next gullible victims in the next bubblescam, whatever that is.

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  • sovietuk: ha. hmm.. in defence of currency. Oh dear.

    by the way . by “bailing out” the banks in this format – and not allowing the methodologies built up over time for these things to act .. i believe that we could now all be contributing to the bankers christmas bonuses.

    Of course in an administration scenario there are clear rules about what you can continue to do.

    Oh.. thats right .. its only temporary liquidity being provided itsnt it? not that the whole thing is a bust. There fore it is not necessary to do any of the things that would be required under those circumstances.

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  • Savers have pulled £14bn from Northern Rock…
    http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2799362.ece
    60% of the crock’s deposits have now been withdrawn even with HM Treasury’s “help”.

    I totally agree with confused76 @1.
    In March, a school pal of mine was telling me about his BTL portfolio of 3 properties including an off-plan £199K flat in Leeds.
    You can’t & don’t argue with brainwashing.

    Funnily enough our local EA told me last week that people were being put off buying because “they believe what they read in the papers”.
    I also told her about propertysnake which she found very interesting…
    Then she tried to convince me to sell my house to “profit from the downturn” 🙂

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  • April sell off ????????? Who is going to buy then ?????????/ Do we have hordes of buyers waiting in the wings for april to arrive so that they can bail out BTLs . 25% less payable on capital growth tax is bugger all saving on negative equity. ha ha ha

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  • @voiceofreason
    Thats good advice though isn’t it? If you still have the time. Maybe she thinks your house will hold value for longer than others.

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  • I had a conversation with a parent of one of my son’s school mates. He was asking – forcefully – why I insist renting rather than buying. “Prices may fall 50% in real terms” I said. “This has happened in the past”. And he said “I am not concerned, the market price of my property has doubled. That means it has “really” grown by 100%. So I have nothing to fear”.

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  • What’s a bit shocking about this article, even to a hardened property bear like me, is that the ‘survivor’s guide’ is really all about how to die with the least pain. If you don’t have much equity in your BTL then sell now to avoid a long drawn out financial death. If you have equity in your home then ‘release’ some of this to water down the poison, so you don’t notice it killing you.

    And Enuii’s comment hit home too, that and the report of landlords crying down the phone – I have numerous clients who have a handful of BTLs each, most of whom are in their 50’s and 60’s, but even though I’ve warned of the risks of BTL for some time, this has been at a professional level and I have not really been sympathetic to the actual misery that these people face.

    I really think the door has closed now. Those who chose to be on the other side of the door now face the financial equivalent of hell fire. Like a fly caught in a Venus Flytrap, they will move in the direction of least resistance until they fall into the poison and die horribly (well, financially speaking for most – for some, they really will die in poverty as a result). By this I mean that, whilst many could still get back if they wanted to, the vast majority will reason that it’s a blip – prices are down, so this is not a good time to sell – better to do as they say in the article and hold out while you can. Further, further down the slippery slope towards oblivion…

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  • I feel very sad for the old people looking for some way to get by after retirement, but I don’t think that should stop anybody realising that the vast majority have pulled in a low interest debt to buy a house so that others, needing somewhere to live, pay for them. The only difference being who qualifies for the loan. Like 1800-1920. Upstairs and downstairs.
    Now that the theme of this site seems to have changed to sympathy for the people who are, perhaps, going to end their probably hard working life in poverty ( a.k.a State Pension, well worth it at 40% tax), there is nothing to say. I can’t pay off their mortgage for them. I wish things were different. In fact, I don’t really have any money. I just like reading this stuff because it might come in handy when I am 55 assuming things repeat themselves. However, my work days aren’t over so never say never.
    Some poor sod who had to deal with the 11+ shock, and watch as all pension schemes seem to be organised theft, NO. I don’t want that but that is this country. Maybe it is us, maybe it is something I can’t name without my comment being removed.
    (How can I imply responsibility? Things were OK in 1997 roughly)

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  • Also, there are over 60 million of us on these islands, and we seem to have agreed that old people, the people that delivered bread when they were 15, went through the war, participated in the only social housing building we ever had during the 60’s, we seem to have agreed that they get 80 pounds a week.
    Thats what we agreed. I never see anything about this number here. Their baby-boomer kids have done OK, so hopefully they hand over some cash during visiting hours.

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  • The Times ran a story about £1200 motor cars being made in India for Indians. Which are forcing a re-think for motor markets everywhere.
    On a similar note, I have a Motorola F3 mobile phone designed for the African market that is fantastic and costs about $20 to make.

    My point being that it will be perfectly possible to live on a lot less in future.
    House prices will follow the trend, but probably in a less organized fashion.

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  • crash bandicoot says:

    You could always remorgatge your first property to pay for your BTL – what a joke. I thought this was supposed to be an investment, aren’t they supposed to make you money?

    As for defering CGT just keep hold of the property for a couple of years and you’ll have no problem with CGT because you will have made no gain!

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  • voiceofreason, we had someone else here (down wave) who bought one of those Indian cars – it is a deathtrap:

    No doubt marvelous for Mumbai, but in Manchester if you crash into something the last thing to go through your mind will be the steering wheel, not the price. Anyway. Motorola only make substandard phones, so they’ll probably bring out the African model next year in the UK and US. They are light years behind Nokia, Samsung and Sony-Ericsson.

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  • Paul @ 25.

    I totally agree. What I meant was that the official living standards measures (e.g. CPI) will show that we have maintained the same standard of living. But in reality, we will have much more inferior products. E.g. Primark clothing.
    To the economists, the £1200 Indian car (actually not the G-Wiz, but a 660cc 4 door petrol saloon) will be fed into CPI as a “car” and the CPI will show that things are getting wonderfully cheaper and we all benefit.

    Truth will be that we will all be a lot poorer, but stats won’t show it.

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