Thursday, September 23, 2010

The painful story of Buy-to-Let in Cardiff

We were all losers

Unusually, a piece from someone who was working as part of the industry during those boom years.

Posted by david jones @ 10:49 AM (1201 views)
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3 thoughts on “The painful story of Buy-to-Let in Cardiff

  • ‘According to the Council of Mortgage Lenders, the average age of a first-time buyer is now 28 in Wales, with an annual income of £29, 122 with an average advance of £85,300’.

    This is a rather ambiguous statement. I’m sure very very few 28 year old’s are on £28k per year.

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  • @david jones

    Interesting posting. It’s not often we hear such a straightforward account of the boom days from a property insider.

    “many experienced investors-cum-landlords exited the market in 2005 and sat on the sidelines for the next few years. In retrospect, many did not foresee that the last leg of this boom would go on as long as it did.” Sounds familiar.

    These parts caught my eye:

    “The crucial part of the recovery will involve finding an exit strategy for these buy to investors, given that there are so many of them, and enabling the market to function again.”

    “It may well require another round of financial stimulus to the banks in order for them to address the potential shortfall when these properties are realised in the future in order not to derail the long awaited recovery. Only then can we return to something resembling a normal market and address the long term impact of this noughties phenomenon on the towns and cities around South Wales.”

    Despite the athor’s lucid description of the bubble, he seems reluctant to acknowledge that some speculators have to eat a loss. You cannot immediately reinflate this burst bubble.

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  • An interesting article followed by a lucid discussion – thanks.

    What hits me from it is the sense that as price falls bite, the transaction numbers shrink and the proportion of forced/ coerced sellers increases in a self reintorcing phenomenon. Of course it’s largely an academic thought until interest rates drift.

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