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BTLers cashing in on NR customers pain.
Realy
Posts: 1,017 Forumite
I thought I should post this as an insight in to what is going on in the north and the midlands. (This is not a WUM post but news I may think of interest by some on here. I also know I am going to get loads of stick for this but I promise it is true)
I know a EA (close family) and he was saying how lots of NR customers are just handing back the keys to their houses as they are in NE and cannot afford NR’s SVR.
He as seen lots of repossessions (11 in the last week), he is selling them at 30% below 07 prices (but this is where the bad news for most future owners is) they are in the majority being purchased by professional BTLers (not your I have got a couple of BTL, but proper landlords that have being doing it for decades). The properties are going for around £70K and being rented out for around £575PM
I presume this could be because of strict lending but is surly not great news for potential home owners of the future.
Could we be seeing the makings of the next bubble already?
Could we be seeing own ownership decrease in the future due to Landlords holding large amounts of properties?
I would back it up with some facts but I can’t unfortunately.
I know a EA (close family) and he was saying how lots of NR customers are just handing back the keys to their houses as they are in NE and cannot afford NR’s SVR.
He as seen lots of repossessions (11 in the last week), he is selling them at 30% below 07 prices (but this is where the bad news for most future owners is) they are in the majority being purchased by professional BTLers (not your I have got a couple of BTL, but proper landlords that have being doing it for decades). The properties are going for around £70K and being rented out for around £575PM
I presume this could be because of strict lending but is surly not great news for potential home owners of the future.
Could we be seeing the makings of the next bubble already?
Could we be seeing own ownership decrease in the future due to Landlords holding large amounts of properties?
I would back it up with some facts but I can’t unfortunately.
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Comments
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70k, rent 575pm, I make that about an 8% yield on a falling asset in a dodgy credit market. Might work. I wouldn't fancy it much.0
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Thats fine I just thought I would post it up though as it gave some idea on how the goverment have stuffed lots of NR customers and who was taking advantage of the drops.
I suppose if they have the cash it could be a good time for them but I don't know.
Edit: from what I gather these are cash rich people not 10/20% deposits.0 -
For the professional, multi-property LL, 8% is a good yield and the purchases look good value in the mid to long term.
I'd want 10% but then, I'm an amateur.
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0 -
I'm sure this is happening to some extent - I doubt it's happening to the extent of propping up the market, though....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
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neverdespairgirl wrote: »I'm sure this is happening to some extent - I doubt it's happening to the extent of propping up the market, though.
Well my family member says he is surviving on repos and rentals.
Interestingly he said Mortgage companies are not bothering with auctions as nothing is selling through them. I presume they are now used as a last choice for lenders.
But interesting that the traditional BTLers are back in the market. I personally think it is a bad thing as these could quiet easily swallow lots of properties while credit is tight.
PS I think it only happening in certain areas but it I presume a trigger point as been hit for some LL
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Repossessed houses have always been advertised through EAs first. Usually, if they remain unsold after 6 months, they are then sent to auction.
It's not rocking horse science to see that sending too many houses to auction at once may be counter-productive.
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0 -
Gorgeous_George wrote: »Repossessed houses have always been advertised through EAs first. Usually, if they remain unsold after 6 months, they are then sent to auction.
It's not rocking horse science to see that sending too many houses to auction at once may be counter-productive.
GG
I think now the mentality by lenders at the moment is to alow the 30% drops somthing I think they never really did before, but the last time this happened I was fairly young and not interested in houses.0 -
Yes, we had big drops in the 1990's - we had a reduction of 37.5%. They had to advertise them though, they couldn't just accept.0
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Landlords are always going to be competing with FTBs for property. Its been that way for a few years and it will be that way in the future. Sometimes yields will be low and the FTB will have the advantage, sometimes landlords will find it easier to get finance and have the advantage. If anyone thinks that landlords are going to disappear for the long term they will be disappointed.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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Landlords are always going to be competing with FTBs for property. Its been that way for a few years and it will be that way in the future. Sometimes yields will be low and the FTB will have the advantage, sometimes landlords will find it easier to get finance and have the advantage. If anyone thinks that landlords are going to disappear for the long term they will be disappointed.
I dont think anyone does, this is about the type of LL. Your average BTLer could not get one at the moment (would not get a mortgage)
The last time my family member spoke of people like this I would say was around 2004/5. Most BTL by him over the last 3 years have been people looking at a second/third investment property not this kind of buyer.0
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