Tuesday, December 18, 2007

BTL final blow: desperate sellers put property back on the rental market

Desperate home owners are trying to rent out their properties after failing to sell them, according to a report out today

As long anticipated, having failed to sell their "investments" the desperate BTLosers have created a glut of rental properties, as also proved by the latest Primelocation.com report. Rental housing stock is at all time high and counting, thus depressing the rental market and forcing other so called investors into insolvency. Merry Christmas to all the BTLosers!!

Posted by confused76 @ 10:04 PM (1547 views)
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14 thoughts on “BTL final blow: desperate sellers put property back on the rental market

  • Most confused article ever: so increasing numbers of properties not selling are being put up for rent but it’s OK because landlords are enjoying the economic uncertainty and rising rents… er, how does a rising supply of rental properties due to lack of sales cause rising rents???

    I wish the vested interests would make their minds up – which is it, increasing supply of rental properties or rising rents? Not really possible to have both.

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  • Even the Mortgage Introducer has to concede defeat: “a drop in the proportion of buy-to-let purchase mortgages from 43.84 per cent in October 2007 to 18.38 per cent November 2007″ THE MARKET IS DEAD IN THE WATER.

    Landlords put purchasing on hold
    17 December, 2007
    Enthusiasm in the buy-to-let sector is beginning to falter as landlords look to remortgage rather than boost their portfolio, according to Hamptons International.

    Hamptons has cited the credit crunch as a major factor influencing this ‘about face’ reaction to buying new property.
    Research showed that the proportion of buy-to-let purchase mortgages decreased by nearly 26 per cent during the last four weeks. Buy-to-let remortgages increased by 6.2 per cent over the same period of time.
    Signs that landlords are beginning to feel the squeeze from the present credit crunch and are choosing to sit tight before purchasing more properties are evident by the drop in the proportion of buy-to-let purchase mortgages from 43.84 per cent in October 2007 to 18.38 per cent November 2007.
    Although buy-to-let still remains one of the most buoyant areas of the housing market, it appears that a certain number of landlords are recalculating their risk and expenditure instead of adding to their portfolio and purchasing more properties. WELL DONE!! LOOK AT THE BRAIN ON THE BTLOSERS!!
    Hamptons Mortgages Tracker figures reveal that a number are choosing to recoup existing capital by re-mortgaging existing properties.
    One reason why landlords are choosing to remortgage in this way might be to reduce the rent they charge with the intention of retaining long-term tenants. AH HAHHHH HAHAHHA HHA HAHAHHA MY SPLEEEN!!!
    In a climate where rates are uncertain, many landlords may have decided to take advantage of increasing loan-to-values available to them at remortgage in the hope to retain existing clients at the same rent, so to avoid any crippling void periods over the coming months. SO MADDISON, WERENT RENTS GOING UP??? WHAT A PACK OF LIES
    “While buy-to-let remains a buoyant area to enter into, it appears that some buy-to-let landlords have had their confidence dented as a result of the recent credit crisis,” said Jonathan Cornell, managing director of Hamptons Mortgages.
    “Amateur landlords will have suffered the most and many may have held off from purchasing new properties – presumably in the hope that the market will begin to calm. HERE THE AMATEUR AGAIN. [email protected] AMATEURS WE WANT THE BTL PROS!!
    “Now that the Bank of England has cut the base rate by a quarter point, confidence will hopefully begin to be restored among landlords but it might take some time for this to take full effect. 2008 may not only signal the start of a New Year, but may also provide fresh hope for borrowers that interest rates will continue on their downward trend.” SCREW THE BOE BASE RATE, HAVE A LOOK AT THE LIBOR DUDE

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  • Time for Landlords to bend over backwards to keep their tenants happy this Xmas, hows about a nice bottle of wine and a big box of choccies as thanks for renting their little bricks ‘n’ mortar investment.

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  • it_is_going_with_a_bang says:

    The rental increase situation is in my experience not as ‘inflated’ as they may want it to be. Sure its strong in areas, but there is still quite alot of stuff around to rent in my area.Infact quite a few houses etc have been up for rental for months and at quite reasonable rates.
    I think resorting to renting it is just facing the fact that they cannot sell it – simple as that.

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  • The BTLers will of course have to tie them selves to a tenant for the 6 month AST and watch the world cave in around them. Then they’ll be looking around for a remortgage with their lender’s SVR looming and be looking for a low rate with no ERC. With BTL remortgage criteria tightening by the day, some (a lot?) may find themselves in the doo-doo.

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  • dohousescrashinthewoods says:

    Same here – high asking rents but propeties hanging around like a fart under a duvet – the same whiffs keep popping up on the “alert” emails, with slightly weaker prices as the months wear on, but not nearly reduced enough to make them attractive.

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  • And this is Bath!!

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  • In my experience you can usually haggle £50-£100 off the advertised rents. Should be even easier if this supply glut keeps up.

    These BTL investors who’ve given up on selling, reminds me of an old quote: “A long-term investment is just a short-term one that went wrong.”

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  • European-bear says:

    “The country’s biggest organisation of chartered surveyors says there is now an oversupply of flats in the market nationally.”

    “With rents still on the increase, many would-be buyers will find accessing the housing market even more difficult as they struggle to raise the capital for that first important purchase. However, many landlords will still take solace from uncertainty in the economy and enjoy the gains from rising rents.”

    The above are cut and pasted out of the artcle…….. now lets play spot the contradiction (clue how can rents rise when there is an oversuppy?)….almost time for a confused style manic laugh!

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  • The difference between the present situation and the 90ies is that BTL and house building policies have created a much bigger stock of privately-owned properties available to rent.
    The under-supply card which has been used to suck more and more fools into the feeding frenzy has produced an over-supply. Rents in my opinion are going down. Time to sell and rent myself.
    Does anyone know if, when you sell a house and move into rented accomodation, you would be liable to Capital Gains Tax on your equity?

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  • This is happening in my street, properties on for months to buy, before sellers throw in the towel and reluctantly rent them out.

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  • I previously thought that as the BTL brigade stopped buying, and started to offload, the supply of property available to rent would become very tight, with resultant short to medium term increases in rents.

    But now I’m not so sure – I’m seeing signs that young priced-out FTB’s are not abandoning the dream of home ownership and renting, but are becoming convinced that there will be a price correction that lets them into the market before too long.

    The result is that instead of blowing their money on rent, they are continuing to live with their parents while they diligently save. There is also a change of attitudes – few parents now seem concerned about their offspring spending the night with their girl/boyfriends under the parents roof.

    In addition, a lot of property that was bought as a purely speculative exercise, and never rented, (urban flats in particular) is now being returned to the market.

    I have never understood the rationale of the buy-to-leave-empty brigade, but it would not surprise me if many (100k+ ?) are put up for sale over the coming year

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  • @Magnifico – there is currently no CGT payable on the sale of your main residence – hope this info helps.

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