Thursday, April 21, 2011

Fools rush in where angels fear to tread

Risk-averse lenders help BTL's "remarkable" recovery

Risk-averse lenders are keen on buy-to-let investors with cash deposits, but are moving away from first-time-buyers. Buy-to-let (BTL) investors with large cash deposits are replacing first time buyers as risk-averse lenders are drawn back to buyers requiring lower loan-to-value (LTV) ratios required by most first time buyers, according to Assetz. Investors are returning to the market in considerable numbers as they seek to take advantage of lower prices and strong rental demand, with Assetz recording a doubling of BTL business over the past year.

Posted by jack c @ 02:39 PM (2456 views)
Please complete the required fields.



12 thoughts on “Fools rush in where angels fear to tread

  • sibley's b'stard child says:

    Thanks for the advance warning Jack.

    It would have been nice had Assetz contextualised their assertions with actual figures; it’s all good and well saying their BTL business has doubled since 2010 but it’s largely irrelevant if it was from a low starting point. Then again, guess i’m clutching at straws.

    Still, I guess if you’re going to be a BTL, better that they gamble (largely) their own money than someone else’s.

    As many as 40 per cent of all investment purchases through Assetz currently are cash, requiring no mortgage lending at all.

    Perhaps we’re simply witnessing the stronger players strengthening their positions; presumably the Johnny-come-lately will be squeezed out by raising IRs and the effect of the LHA reforms (working on the assumption of less room for maneouvre). In any event, I take exception to the notion (as per the article) the BTL market in general will balance rising IRs with similiar increases in rent.

    Reply
    Please complete the required fields.



  • Serious question:

    Is it worth buying a house in Britain anymore?

    Reply
    Please complete the required fields.



  • ‘as investors are drawn back by the need for a long-term, low-risk investment for their cash’

    err… define ‘low-risk’ please Stuart

    Reply
    Please complete the required fields.



  • @dill

    Short answer to your question would be yes (IMO) if people are prepared to take a long term view (10, 15, 20 years +) are looking for a home rather than just a house and carry out all of the neccessary due diligence before commiting to what is likely to be their biggest ever financial commitment.

    Reply
    Please complete the required fields.



  • dill – I agree with Jack completely. If you want a house to live in for a fair chunk of time then buy (but haggle hard!). If you are going to buy but then stay on this site every day trying to figure out whether your “investment” is appreciating or depreciating then you’ll probably just depress yourself. Most people want to buy their own place and would be happier living in a home that they’d bought rather than a home they rented; if the additional pleasure you’d get from owning your house more than offsets any misery you cause yourself because it’s gone down in value then buy. I think there are regulars on here who will make themselves miserable for years waiting for prices to crash – what’s the point? They’ll probably end up bagging a bargain then get run over by a bus. Life is too short.

    Reply
    Please complete the required fields.



  • A doubling of BTL business for Assetz does not necessarily equate into more BTL’ers. It merely means more BLT’ers are using Assetz to obtain market information. Because the article does not present any facts or figures then I feel it is just an advertisement for Assetz (IMHO) and is in a similar short style to many of the moneyweek articles which also try to promote companies through articles.

    Here is a description of what this company does for the BTL’er:

    “The Assetz House Price Watch is an overview of the data supplied by five leading UK house prices indices: Financial Times House Price Index (FTHPI), Rightmove, Nationwide, Halifax and the CLG (Communities and Local Government). It is the only fully inclusive summary of UK house price data, providing a comprehensive analysis of market activity.”

    Who needs such companies when we all know house prices are going to collapse!

    Reply
    Please complete the required fields.



  • jackc & timmy t

    Thanks for the feedback to a simple question (makes a change from being ignored).

    Perhaps I owe it you to give a little insight. Back in the ’80’s my contemporaries (with their socialist leanings) railed against the second homeowners of the time. They have since gone on to gorge themselves on BTL.

    For my part, I was unfortunate. My life and career plan foundered. I was destitute (literally) and, for a while, found myself on the street. In the early nineties I was fortunate enough to get a council place (by now I was certifiable, no doubt many here would agree). Picked myself up and rejoined the rat race. When others were exercising right to buy, I gave the council up – so that someone else in ‘need’ could have a roof over their head. Moved on, worked (career change), bought a house in 2000. Different strokes. Sold early 2008 (having read the runes), before ever coming across this site. Made a killing on equities since.

    The point of this potted cv is to communicate a conviction – that no-one should exploit a basic human need. But Britain does. I could easily buy a few a houses – but I won’t, not even one. While others are denied by the greed of the few (built by a Labour Government. I might add), I will not buy. I don’t need to. I take my risks, but not at the expense of others – especially future generations.

    Britain today is history island, full of complacency and hidden loathing – wrestling with apathy and spoilt avarice. This is not universal, but it’s become overwhelming, as the likes of the hideous Assetz prove.

    For now, I rent and will continue to do so. And having seen this side of policy, I will now lobby for better, if not equal rights for private sector tenants ( vis a vis mortgaged homeowners). It’s no longer acceptable that policy is designed to drive people into an economically dysfunctional housing market. The redistribution ( which it was designed to achieve) no longer works, and many now resent the chief benefactors of that arrangement – the banks! A 21st century, civilised democracy should respect the needs of all it’s citizens and not the manipulation of a chosen plutocracy.

    I only need one roof over my head, and that can be anywhere.

    As for HPC – I can take it or leave it, as with Britain.

    Reply
    Please complete the required fields.



  • letthemfall says:

    dill
    Thanks for sharing your difficult experiences. I agree with what you say about exploitation, except that I would describe it as one section of the population exploiting the rest, not only in the sequestration of housing. This country along with the USA is leading a drift back to the feudalism that was partially unwound during the last century. So many of these crummy businesses are not creating much value but leaching it from others.

    As for buying a house now, it’s hard to see the logic of overpaying now when I’ve sat out the overpriced years so far. The long-term buying argument only holds if one assumes they will stay overpriced, or fall and then return to overpriced in the time span of ownership. Meanwhile I’m vulnerable to large rises in interest rates. The risk is not one I am comfortable with.

    Reply
    Please complete the required fields.



  • @dill (Thursday, April 21, 2011 05:39PM) – thanks for sharing the “potted cv” – I’m pleased to hear you have picked yourself up and that the career change etc. has worked out for you. A 21st century, civilised democracy …. oh yes if only we had one.

    Reply
    Please complete the required fields.



  • You need to do what you need to do, we’re only a few years into the deflation of this particular housing bubble. Probably won’t bottom out for another 8 years or so depending on circumstances, given that “life is short” some will choose to buy now and some will hang on until the bottom and buy relatively cheaply. It’s all down to personal circumstance. Fair? No. That’s government for you.

    Reply
    Please complete the required fields.



  • the real dill,

    When you live with those qualities dill, you have the whole Godly universe behind you.

    How many here have been blessed with poverty, not many it seems.

    I have a very good old friend you may want to listen to. ~ Mooji.org.

    Reply
    Please complete the required fields.



  • happy mondays says:

    Dill your a star mate! If only the rest of the population had a moral compass like yours.. 😉

    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>