Saturday, September 5, 2009

Wrong time to buy

Buy to let investors face legal action

“With significantly fewer products left on the market and high interest rates attached to those available, we could potentially have a ticking buy-to-let time bomb on our hands,”

Posted by letthemfall @ 09:35 AM (1604 views)
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10 thoughts on “Wrong time to buy

  • I know somone who has lost over £80,000 from an off-plan BTL investment turned sour.

    The worst thing is that it is a rock and a hard place – even if the ‘investors’ keep on paying, there’s no guarantee that the development will actually be completed. You might keep paying but if the develop goes bust anyway, you’ll still lose it all with a half-completed property in the middle of an empty building site. If you don’t keep paying (as my friend didn’t) you forfeit you money and take the hit.

    Oh the sweet sweet irony.

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  • Now happening in several developments in Belfast…….

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  • If they buy off-plan then of course they are legally obliged to pay the agreed price, unless there was a caveat within the contract stipulating that the builder would carry the risk of a falling market.

    It does make me angry/amused that people who saw nothing but ££££sss when buying off-plan failed to realise the market could fall.
    Buying property as an investment (especially off-plan) is a gamble, in exactly the same way as buying any asset class. Sorry but if they cannot stand the heat then they should not have entered the kitchen in the first place.

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  • Indeed Denzil.

    I don’t think anyone has any sympathy for them – apart from perhaps the BBC. As far as i can tell, they tend to view it as a failed investment – like buying a commodity and watching the price plummet. In other words, they don’t see theirmselves as being victims of their own poor decision making process, rather as a victim of market conditions.

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  • While it’s obviously nice to see these greedy BTL swine suffer.

    Presumably developers know that nearly all their investors will need finance to complete the purchase deal and if they can’t get finance then the developer ain’t gonna get his money is he? He could take legal action against the investor to personally cough up the money and bankrupt the investor in the process but chances are the investor’s personal assets are very small anyway so the developer would be wasting his time?

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  • gone-to-colombia says:

    What we need is the hardest lesson to be taught to these idiot investors, such a lesson will be remembered long after and might stop a furture similar event.

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  • What amuses me is that, if you are in business then you are taking a risk, if you do not do a risk assessment of your intended investment then you have to take the rough with the smooth. Ah! but then they were told that prices of properties can only go up, never down ir-respective of affordibilty. One word comes to mind “MORONS”.

    I would like someone on this site to explain to me why would people buy shares on the stock market to make money. I always thought that if you have a winner then somebody looses. How long can this carry on. Please can someone explain or direct me to a link where I can read about it.

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  • nopensionnohouse says:

    Surely it would have been better to take out an “option” to buy off plan. Oh, I forgot. These are “buy to let professionals”.

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  • But really most of the BTLers are not investors in the usual sense of the word; they are get-rich-quickers. It’s partly greed, the zeitgeist, fear of losing out, and also the activities of the BTL advice cowboys who encourage and ensnare the gullible. It’s plain that very little thinking goes into sticking all your cash and what you can borrow into one asset.

    house:
    Buying shares in a company is providing funding for the business in return for a stake in future profits, manifested in dividends and a rising share price as the company grows in value. That’s the idea anyway. Rapid trading is a zero-sum activity however, more or less, although plenty of city bods will point out that this all helps markets to function smoothly to some degree. As we have seen, certain trading activities can have the opposite effect.

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  • Another BTL motive is an understanding that there may be no traditional pension when these people come to retire in the UK.
    It is a calculated risk to bet on ‘a non sure thing property bet’ rather than to bet on the successive governments’ pension and taxation systems to provide for old age.

    Ironically, some would say that the less you have, the more you get: depending on the detail of a means-tested system.
    So ‘losing everything’ might be factored into the calculated risk.

    I am talking about motivation here rather than the accuracy of their thinking. It’s more about motivation than it is about retrospectively being wrong, isn’t it?

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