200,000 buy-to-let investors lose up to 90% of their cash

Dithering_Dad

dopester wrote: »

Yes DD of course I read and understood it. We all now are fully aware of your own personal circumstance of renting and not being a landlord. I'll edit and replace the "You" and variants of it to "landlords" if that makes you happy.

Let it go, as it was just a sweeping attack on all those who reckon they're pro landlords on the back of years of easy cheap money flooding they system and pushing up prices.

You defend the right of landlords to do what they do, which is fine. After a decade and more of year-on-year rises, explosive capital rises, I just won't be crying for those landlords who fall. The reversal is here and many a landlord who were cushy until recently are going to get the taste of how its been for those who've been priced out of the market for years.

I'm not bothered either way, change the text if you like. I'm not sure why you chose to quote my post in order to have a "sweeping attack on landlords", especially as I'm not one and I didn't defend landlords at all. I merely said that a lot of people preferred to rent than buy and if !!!!!!? had his way and all housing stock was just bought by home owners, then it would unfairly limit the choice of people who wanted to rent.

I'm still at a loss as to why you're railing on at landlords in reply to my posts.

Dithering_Dad

Romani_Ite_Domum wrote: »

Then you will have to think harder.

Perhaps you could enlighten me?

Gorgeous_George

200,000 BTL LLs lose 90% of their cash eh?

How many OOs have lost 90% of their deposits?

Talk about a non-story.

GG

Gorgeous_George

Generali wrote: »

... You remember those 2 bed terraced houses in I]Northern Hell Hole[/I that were going for £5k in 1997...
They're still not worth any money because they're horrible houses in horrible places...
...those same idiots are going to be clogging up the message boards and Watchdog on the TV moaning about how nobody told them that I]Northern Hell Hole[/I was a Hell Hole....

"It's Grim Up North"

Generali

You really let yourself down with ignorant views like that

Try visiting the North and you will find that there are as many nice places as there are down South. I live in Somerset and there some are horrid places down here. Have you been to Wembley? Or most of the London suburbs for that matter.

The people up North are generally great people - proud of their industrial past. The past that Great Britain was built on. Yes there are some scum but there are scum everywhere.

You have probably never made anything in your life.

GG

WTF?_2

Gorgeous_George wrote: »

200,000 BTL LLs lose 90% of their cash eh?

How many OOs have lost 90% of their deposits?

Talk about a non-story.

GG

I think the key difference is that BTL is a business whereas OOs generally bought their house as a place to live in.

Hence losing 90% of your investment with the use of leverage leaving you exposed to losses to the order of multiples of your investment is a bit more of an issue.

Gorgeous_George

Fair point.

Of course with a BTL any losses can be offset against gains.



GG

Dithering_Dad

!!!!!!? wrote: »

I think the key difference is that BTL is a business whereas OOs generally bought their house as a place to live in.

Hence losing 90% of your investment with the use of leverage leaving you exposed to losses to the order of multiples of your investment is a bit more of an issue.

They haven't lost a penny unless they sell. It's the same as any investment. For instance, my shares have fallen about 9% since I bought them, but I haven't lost any money until I sell them. Eventually they will recover and I'll be in 'profit', though conversely I won't see any profit unless I sell them.

WTF?_2

Dithering_Dad wrote: »

They haven't lost a penny unless they sell. It's the same as any investment. For instance, my shares have fallen about 9% since I bought them, but I haven't lost any money until I sell them. Eventually they will recover and I'll be in 'profit', though conversely I won't see any profit unless I sell them.

As long as they don't need to get access to any of that money and can afford to service the debt on the cash they borrowed to buy the asset then they can leave it in the 'investment' and not sell - hoping that the value recovers, yes.

Chances are that you didn't borrow money to buy your shares so you are not exposed to leverage. As I said in my post thanks to leverage they are exposed to potential losses which are multiples of their investment. With the economy set to worsen and the credit crunch predicted to last maybe into 2010, that's newsworthy.

If I were one of these investors with tens of thousands of my own cash tied up and the potential of losing 30,40,50k or more at a time when recession was looking likely then it'd certainly give me pause for thought.

MissMoneypenny

Gorgeous_George wrote: »

Generali

You really let yourself down with ignorant views like that

Try visiting the North and you will find that there are as many nice places as there are down South.

Just visiting an area is different to living there. I have lived in the north and it is fairly grim.

carolt

I may be wrong here, but I think Generali wasn't blackening the name of 'Up North' generally, but was making specific reference to the well-publicised houses that were sold for next to nothing - was it 5K or less? - can't remember details, as it was a bit ago. They were in some grim ex-industrial northern town, it was on all the news at the time.....

It's not a hypothetical attack on the north - it's a fact that houses there were in some cases unsellable at any price. Can't think of anywhere down south that has applied to recently or within my memory, anyway.