Tuesday, January 27, 2009

Anne Ashworth smacks down the BTL amateurs

The tale of the bonkers buy-to-let brigade

In the boom you decide that buy-to-let could be a profitable sideline and arrange mortgages to finance your portfolio. You snap up several inner-city flats, assuming that there will be demand from well-paid young professional tenants, although the area is already oversupplied with such accommodation, and salaries in the locality are modest. The gloss of prosperity you have observed in surrounding streets is financed more by credit cards than chunky salary cheques. The downturn hits and you lose your own day job. You use the dwindling sums you are receiving in rents (tenants are few and void periods grow longer) to finance your lifestyle rather than pay your mortgages. This scenario is far from fanciful. It is the typical tale behind many portfolios being repossessed.

Posted by little professor @ 04:02 PM (1420 views)
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4 thoughts on “Anne Ashworth smacks down the BTL amateurs

  • This is just the scenario we were talking about 4 years ago, here on HPC.

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  • “The banks’ fates are intertwined with that of the property market, which means that they have a compelling reason to bring about its recovery. They must reconcile themselves to this reality, but there are few signs of such self-knowledge.”

    Waiting for the banks to reignite the property bubble? Not my choice of business plan.

    “The first bank bailout in October may have saved the banks from meltdown. But their near escape seems to have so spooked them that they can concentrate only on building up their balance sheet against risk. Thus, for the moment, they will continue to favour customers who represent the lowest risk.”

    Like uhm… normal banking?

    “For the excluded categories (first-time buyers, and owners with little equity aspiring to trade up) this is particularly frustrating.”

    Not really. Watching the monthly house price graphs is quite pleasant.

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  • Is this her swan song before been found next to three empty bottles of gin, with Kisrty on freeze frame and “Why” scrawled on the TV screen in badly cloured lip stick and puke clogging the remote control ?

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  • it_is_going_with_a_bang says:

    Why in earth would a first time buyer who can’t buy because they can’t afford it be frustrated because property prices are sliding?
    Stupid woman.

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