Thursday, January 14, 2010

We Get a Fee for Managing the Fund Whatever Happens

British Land to run buy-to-let homes fund

To raise up to £300m, which would be bolstered by debt. Most will be invested in homes worth £500,000 to £800,000. The fund could buy up to 500 properties, which would be let to provide a target rental income yield of 3.5 per cent (before costs). Most of the returns, targeted at 14.5 per cent a year, are expected to come from capital growth of the properties. !!! Further explanation from the manager at FT Advisor, "He said in the long-term there could be a shortage of properties thanks to the effect of the credit crisis on building and lack of liquidity for borrowers, fuelling rental demand." Errr? So borrowers won't be able to borrow so they can't buy and must rent, therefore target of 14.5% a year coming from rising prices is because all those would be buyers are renting??

Posted by ontheotherhand @ 12:19 PM (1284 views)
Please complete the required fields.



4 thoughts on “We Get a Fee for Managing the Fund Whatever Happens

  • Perhaps they should take a look at the German market to see where their logic will get them.

    Reply
    Please complete the required fields.



  • Braking mad, unless we are heading for serious, serious 1970s style inflation.

    Reply
    Please complete the required fields.



  • I love the logic that leads to these kinds of investment decisions – exactly the same that the BBC uses when it talks about the buy-to-let investment market and the property investment market. Goes like this:

    If the number of people renting drops, house prices will rise as people buy instead = PROFIT!
    If the number of people buying drops, rental returns will rise as people rent instead = PROFIT!

    The flaws in the argument are too numerous to mention, suffice to say no-one should take it seriously whether its coming out of the mouth of a property investment firm or a heavily property invested news editor.

    Reply
    Please complete the required fields.



  • I love the logic that leads to these kinds of investment decisions

    Mania, I think it’s called. Still very clear that the property bubble still has a long way to go before it bursts.

    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>