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Private sector to bail out buy-to-let
baby_boomer
Posts: 3,883 Forumite
FT
"Egerton Partners, an advisory firm, is one of the first groups to set up a plan. It is seeking out wealthy investors who might be interested in putting up capital to help struggling buy-to-let owners with property portfolios of £5m to £30m...."
This is to bring in partners, who want to invest in property while bypassing the hassle and expertise needed as a landlord.
The btl landlord would retain ownership, but the new partner investor would receive any return up to a stated threshold. It depends on the rental yield.
The theoretical advantage for the BTLetter would be that (s)he doesn't need to suffer from forced asset sales on the way down.
On the other hand it looks like a great way to see your investment cut up three ways (landlord, partner, Egerton or whoever takes their cut for the introduction). And if the threshold is set too high, you'll be doing all the work for no return.
Slave labour, no less for some buy-to-let landlords :rotfl: I'm sure our collective hearts are bleeding
For the tenant, there is greater chance of continued tenancy, but the possibility that there might be upward pressures on the rent because of the multiple investor pockets to be filled.
It'll be interesting to see how these work out in practice.
"Egerton Partners, an advisory firm, is one of the first groups to set up a plan. It is seeking out wealthy investors who might be interested in putting up capital to help struggling buy-to-let owners with property portfolios of £5m to £30m...."
This is to bring in partners, who want to invest in property while bypassing the hassle and expertise needed as a landlord.
The btl landlord would retain ownership, but the new partner investor would receive any return up to a stated threshold. It depends on the rental yield.
The theoretical advantage for the BTLetter would be that (s)he doesn't need to suffer from forced asset sales on the way down.
On the other hand it looks like a great way to see your investment cut up three ways (landlord, partner, Egerton or whoever takes their cut for the introduction). And if the threshold is set too high, you'll be doing all the work for no return.
Slave labour, no less for some buy-to-let landlords :rotfl: I'm sure our collective hearts are bleeding
For the tenant, there is greater chance of continued tenancy, but the possibility that there might be upward pressures on the rent because of the multiple investor pockets to be filled.
It'll be interesting to see how these work out in practice.
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Comments
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So Mr. Jones the teacher on £25k, with a portfolio of ten worthless flats and a mortgage of £6million is getting help?
I thought that's what mental hospitals were for.....I'll have some cheese please, bob.0 -
We need to bring back debtors prisons for failed BTLet chancers.Krusty & Phil Madoff, 1990 - 2007:
"Buy now because house prices only ever go UP, UP, UP."0 -
If private investors want to put money into a failing investment then that's up to them. I won't be doing the same.0
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Interesting idea, however.........
I've been studying international economics/markets for the last few years. Now for this to work they need investors who are cash rich. See one of the ways for this to be funded is for the buyer to borrow the money. Now that is simply not going to happen, banks want to hold money at the moment, the last thing they want to do is lend money. Especially when you take account of the mass deflation in the housing market, no matter how much they make in long term future. Banks will not lend in this climate for investment purposes, they want to get cash fluid.
Then you have shares. Share markets have fallen almost a half in the last couple of months. The funds are simply not there to sell to invest.
That leaves countries, organiastions or individuals who are cash rich. Again I can't see individuals or organisations again buying into housing now. For one the numbers are limited and second any one with common sense would wait longer till prices were lower as this is going to be a long hall. By then these landscale landlords would have gone under.
Of the cash rich countries you have to break them down into 2 simplistic groups. Members of OPEC and manufacturers. For Opec Members now is not a good time, despite making huge profits in the last few years oil prices have halfed. They are starting to panic and they know commidity prices come down in recessions. Now with dwindling revenues over the next few years they will need to be more carefull with money. Russia is in a state of economic collapse and the likes of Saudia Arbria are saving for when oil runs out.
The manufacters (mainly China really) are likely to see international trade sharply fall. Then there is their domestic consumption that is being ravaged by inflation. Its going to be a hard couple of years for China. They won't be inune to this down turn as some have predicted.
No in the current climate large scale investment is going to be a rarety. The previous glut of it was fueled by cheap credit which is well and truely over.
These big boy landlords should of sold up last year like the others. They are finished and that will increase the speed in falls of house prices.:eek:
Anyway on a positive note the next Comodity Watch podcast is available and is a really good listern to how things may pan out.
http://www.minesite.com/webcasts/commodity_watch_radio.html:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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I agree with you that there is a shortage of investment - that's part of the potential deflation / asset depreciation scenario.
If interest rates were to fall to 2%, then the yields could be attractive IMHO. The baby_boomers are looking for rising income for retirement. Although they wouldn't be keen on capital losses. But these partnership deals could be structured so that the new investor didn't have a major risk of capital loss.
We'll have to wait to see more details of individual schemes.0 -
I'm all for private companies taking this on - makes a change from us. At least we then have the choice if we wish to be involved.0
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Absolutely. I agree 100%, wymondham.
Although don't be surprised if we "help" with tax breaks.
There are hundreds of Labour MPs, including ministers, facing unemployment in 2010 who will need to use their second properties - bought with taxpayer help with the mortgage interest - to tide them over while they sort out their future careers.
And both the PM and Chancellor currently let out second properties.0 -
>We'll have to wait to see more details of individual schemes<
I'd be interested, although only once the greedy/silly have taken a hair-cut, but we're seeing property assets being sold on at 12p in £1 already! Within an tax-free wrapper, yields of 10% with minimal chance of capital loss would be worth considering.
Of course the management team would need to be bas*ard-hard about any nonsense from 'professional' tenants.0
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