Friday, November 9, 2012

Stop these vampires…..

'Landlord loans' reach all-time high as one in eight mortgages are for buy-to-let deals

Britain is issuing the largest number of 'landlord loans' since records began, official figures have revealed. One in eight mortgages now a buy-to-let loan deal - an all-time high, the report said. Of the 11.3million mortgages in this country, 1.44million are buy-to-let loans, rather than standard residential mortgages.

Posted by hpwatcher @ 06:10 AM (2523 views)
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20 thoughts on “Stop these vampires…..

  • I love the third bullet point (at the top): “Average salary 6 times higher than the average salary”. Quality writing from the Mail there.

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  • yeh but is this high by real numbers of high because borrowing is much lower than before? stats can manipulate anything and in a crashing market only the public are dumb enough to buy if you give them a reason to do so, such as “make money from buy to let” who cares if you lose 40% on your investment and it takes 20 years of growth to make your money back you will make rental money each month until interest rates eat up the £20 profit and eat you alive like a rabid crocodile

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  • @2 – What about the second bullet point too? It takes an ‘analyst’ to comprehend that point, and then those analysts simply ‘believe’ it’s true (since the evidence presumably isn’t in yet to state it with any degree of confidence).

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  • mark wadsworth says:

    Look lads, the Golden Rule is “If they own land, give them money”.

    So the funding for lending is mainly for the benefit of banks (the biggest indirect landowners), and then people with lots of equity to stump up a large deposit and then BTLs who are extending their rent collection empires.

    Clearly, the overall effect is that there will be ever fewer FTBs, which is right and proper because they own negative land (i.e. they have to pay out to use some). So it serves them right for not taking a stake in society, investing for the future, allowing in all the immigrants and for constantly demanding that the Hallowed Green Belt be concreted over.

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  • sibley's b'stard child says:

    Ah well, to nick Paul Weller’s lyrics – The public gets what the public wants.

    You all worshipped at the altar of Allsop & Spencer, the new religion of ‘free money’ was far more appealing than the old-fashioned fusty variety which espoused humility, living within one’s means, and abhorred the moneymen. Sure, you can empathise with these youngsters whom just don’t seem to earn enough to buy a home; though secretly you think if they’d just motivate themselves more they wouldn’t be where they are now. Look at you; left school with a couple of O Levels and that’s all you needed; few years of knuckling down and hard-graft (and a fair bit of ar*e kissing, I can tell you) you made manager. That’s how it works. All these kids with degrees coming out of their ears and wasting their lives working on a checkout of Sainsbury’s.

    The irony is the very generation that espoused free love; banged-on about equality for all and civil rights have f*cked it up for everyone else.

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  • “Bbbbbbut…bbut…but didn’t techieman confidently tell us that the yields were too small to allow this from happening?

    I don’t think so…..”

    I dont think i did either…. Agreement at last!

    I think what i actually said was the yields dont warrant the risk involved (but i honestly cant remember – if you want to dig something out to prove your point that would be fine by me).

    Its normal for:

    1. More people to get sucked in at a top, with the Jonny Come Latelys. Thats just the way it is – so we saw a wave of BTLs in manchester / birmingham etc of flats getting shafted at the 2007 top..

    2. When we have a bear market bounce, its the same thing. People generally lag the market buy at tops sell at bottoms etc.

    3. The only thing people learn from history is that they learn nothing from history.

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  • mark wadsworth says:

    SBC, and as you have pointed out before, back in the Golden Days people used to knuckle down and scrimp and save for several months to get a deposit together and then paid a large mortgage for sometimes as long as ten years before it was paid off.

    Nowadays these youngsters just waste it all on foreign holidays iPods and flat screen TVs. And then they complain that it will take them forty years to pay off a mortgage. You would catch a Baby Boomer ever MEWing and spending the money on a foreign holiday or a new car, no sir, they know the value of thrift.

    Techie, as Drewster has pointed out often enough, if you ignore possible value falls, illiquidity, voids and future possible interest rate increases and so on (you know, real world stuff), then taking current low interest rates into account, any spreadsheet will tell you that BTL is actually slightly better than cash in the bank.

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  • Mark – yep agreed – but should you ignore those things.? Or is that what you were driving at – liner extrapolations always work in finance until they dont.

    I actually agree here with HPW re his assessment of the bond market in a prior thread. (although I think – and have some skin in the game – that US Bonds have already topped and Bunds also, im not in the UK market just yet).

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  • “The irony is the very generation that espoused free love; banged-on about equality for all and civil rights have f*cked it up for everyone else.”

    They didn’t do it for everyone else.

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  • @7

    “The irony is the very generation that espoused free love; banged-on about equality for all and civil rights have f*cked it up for everyone else.”

    Absolutely. I’d just add free (actually, paid – due to universal grants) university education to the sum too.

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  • mark wadsworth says:

    Techie: “linear extrapolations always work in finance until they don’t.”

    To an outsider, this is exactly how it looks, but clever folk (like thee) know that there are cycles and cycles within cycles (and then tiny little leprechauns riding tiny little unicycles within those cycles). And these extrapolations of cycles seem to work.

    The big unknown is how much money and what measures the government is prepared to throw at interreupting or slowing – or indeed accelerating – these cycles.

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  • No techie, I distinctly remember you writing that the yields were far too low and that effectively no one would do it.

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  • HPW – i distinctly do not – as i said if you want to argue a case you have to have something to back it up. As i said find the post and i will be the first to concede to your better memory, and to the error of my ways!!! :).

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  • Wow a punch up on a Friday night – is this a first?

    I’ve got the handbags ready and loaded (HPW’s is Pink this week) and it’s a Saturday finale handbags at dawn punch up on the Edgware road !

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  • Round my way BTL is getting gross yields just under 5%. Why do people do it? The same reason they bought dotcom shares I presume, the same reason gilts are bought now.

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  • letthemfall – I’ve literally found dozens of people sucked into the BTL game in recent months with “investors” paying thousands of pounds to go on courses which sound very similar to the old inside track sales tricks. One of my best mats even parted with a grand and I only found out when his wife inadvertently let it slip.

    Gilts are a different matter as good fund managers can still make money for investors albeit they are holding much smaller amounts by historic asset allocation standards

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  • Actually gross yields have obviously risen if prices have fallen and rents have remained stable or if rents have gone up and prices remain stable or….

    So maybe HPW IF (and i really cant recall) i said that perhaps it was when prices were – on average higher and rents were – on average lower- than they are now. Capisce?

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  • I know you are in Retail…..mens sartorial perhaps?

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