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Struggling BTL Investors
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Scenario.
Person graduates, parents live in manchester, first job in London, graduates with student debts of £10k, where is the person going to live in London, sure as hell ain't going to buy pre-boom, or now. Even pre-boom minimum deposit of 15% would be out of reach.
So, logically, by your calculations, post introduction of student fees/ending of student grants for middle classes, no graduates should be able to afford to buy in London?
So who exactly is supposed to be able to afford to buy in London then?
Only BTL 'investors'?
Trust fund kids?
Or maybe, just maybe, prices might fall until ordinary - well, above average earners, actually - can afford to buy!
Shocking thought, I know!0 -
So, logically, by your calculations, post introduction of student fees/ending of student grants for middle classes, no graduates should be able to afford to buy in London?
So who exactly is supposed to be able to afford to buy in London then?
Only BTL 'investors'? Trust fund kids?
Or maybe, just maybe, prices might fall until ordinary - well, above average earners, actually - can afford to buy!
Shocking thought, I know!
I was a graduate pre student loans, my grant paid for rent, because a student ain't going to buy a house, etc. I rented from a BTL LL when I got my first job as obviously I had no savings, until I saved enough to purchase my own via working. He provided me a service and I gave him rent. This has been the formula throughout time, and in fact most european countries rent alot more than in the UK.
What I find is illogical is that people think you can leave home and immediately have enough funds to buy a house whatever the state of the market. This is why there are so many 100% plus mortgages because of this mentality, and a major reason why the market exploded. 100% mortgage and 10 times salary, with no savings or back-up if the market fell.
YOU CAN'T BUY A HOUSE TILL YOU HAVE SAVED SOME MONEY. HOW LONG THAT WILL TAKE WILL DEPEND ON HOW YOU SAVE, NOT JUST HOW MUCH YOU EARN.
Therefore it is unlikely that a graduate is going to buy straight after leaving university in any place at any point in time, whatever the market, unless funded by mummy and daddy.0 -
But if you go to the bank, wanting to borrow some money to start a business, they wont even talk to you without a business plan, & will also expect you to be providing a large amount of the funding.
A lot of the BTL mortgages will have been 90%+LTV, & with no business plan needed.
You wouldnt get that much from a bank for a business loan.
If a BTL buys somewhere, with no mortgage, once theyve covered the maintenance costs, they can charge whatever rent they like.
If they have even a 50% mortgage, this has just increased the cost, & therefore increases the rent they will have to charge.
There are so many rentals advertised, where you can clearly see that the requested rent is more than what the mortgage is costing, & these are daft rent amounts, where its simply not worth it.
You don't need anything like such a strong case if you're going to the bank for a secured loan. Most businesses are looking for money that is unsecured.
Check credit cards rates (15-20%?). That's what you pay for unsecured lending with no business plan.
I rented 3 places in my last 4ish years in the UK. I never paid within 15% of the asking rent. Mrs Generali is a very good negotiator.0 -
So, logically, by your calculations, post introduction of student fees/ending of student grants for middle classes, no graduates should be able to afford to buy in London?
So who exactly is supposed to be able to afford to buy in London then?
Only BTL 'investors'? Trust fund kids?
Or maybe, just maybe, prices might fall until ordinary - well, above average earners, actually - can afford to buy!
Shocking thought, I know!
Not so much shocking as "cloud cuckoo land" for London. Are we discussing real world situations or telling made up horror stories where the boogeyman was actually a BTL landlord who just wanted to increase the rent?
Some places are naturally just an expensive place to live, regardless of boom and bust. Hence the commuter belt, which has been around a long time before the current situation and the phenomena of the modern BTL landlord.If you don't stand for something, you'll fall for anything0 -
So, logically, by your calculations, post introduction of student fees/ending of student grants for middle classes, no graduates should be able to afford to buy in London?
So who exactly is supposed to be able to afford to buy in London then?
Only BTL 'investors'? Trust fund kids?
Or maybe, just maybe, prices might fall until ordinary - well, above average earners, actually - can afford to buy!
Shocking thought, I know!
Carol, are you having a laugh?
I graduated with around £25k of debt. You surely aren't saying I should have been able to buy a house ANYWHERE immediately?
(p.s. have edited out the smileys from the quote, a personal prejudice)0 -
Carol, are you having a laugh?
I graduated with around £25k of debt. You surely aren't saying I should have been able to buy a house ANYWHERE immediately?
(p.s. have edited out the smileys from the quote, a personal prejudice)
let's face it, with that sort of debt up front, anyone who allowed you to be tied down to a mortgage as well wouldn't be doing you any favours would they?If you don't stand for something, you'll fall for anything0 -
In the mid 80s we bought a 2 bed flat in a london suburb for 2.5 x 2 new graduate salaries, the same flats are available now at 2.5 x 2 current new graduate salaries.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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Wait on . hold the phone..... if you worked for 22 years and saved you should have had a house pre-boom , that makes you my age roughly or maybe older, I had a deposit together in 1 year of proper working with no pre-work savings, on a less than average wage when I started, of £12k in the early 1994 (24 years old). So you had a chance to buy pre-boom for years, so what has BTL got to do with you not having a house, it didn't even exist 20 years ago, it was all on commercial loans basis.
Like to put a few facts up for you Kenny....Within 3 weeks of birth diagnosed with chronic Asthma and Eczema....School life rarely put in a full week due to hospital visits and chest infection etc(poxy oxygen tents).I did the best I could at school,left and went to college(paid £27-00 per week 1st year rising to £60-00 wee for the 2nd year.Did my apprenticeship and started working for a company.I could have signed on the disability but didnt ..
The company I worked for were great, worked on a sub-contract basis so no work no pay.Worked hard and saved up
I did apply for a mortgage around 1991, I was refused (quite rightly) for low earnings and not enough of a deposit.By the time I did have a decent deposit the house prices were way to high.So havent yet managed to buy and like I say I wont borrow what I cant repay..Health is now fine so im hopefully we can buy soon....
I still believe its NOT right for BTL landlords to borrow to buy a number of houses for there "portfolio" then when it goes Pete Tong try and keep hold of them.On an island such as our housing is finite and I believe the prices are too high partly due to over over borrowing .i will concede not all BTL landlords are pond life...just the ones I know all are..
!!!!!! wheres the morality here?????
:beer: HAPPY NEW YEAR ALL:beer:0 -
In the mid 80s we bought a 2 bed flat in a london suburb for 2.5 x 2 new graduate salaries, the same flats are available now at 2.5 x 2 current new graduate salaries.
Where in London?...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0 -
In the mid 80s we bought a 2 bed flat in a london suburb for 2.5 x 2 new graduate salaries, the same flats are available now at 2.5 x 2 current new graduate salaries.
Very good a true point.
Problem is most of the whingers on this forum are not prepared to start at the bottom and seem to think they have a god given right to have a 3 bedroom first home in a "nice" area.
Start at the botttom the places are out there, even in London.0
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