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Debate House Prices


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Is Buy-To-Let Bust?

12467

Comments

  • neverdespairgirl
    neverdespairgirl Posts: 16,501 Forumite
    RomansProperties wrote: »
    Some Properties are doing well at Auction

    Guide Price: £140000+
    Sold Price: £152000


    Residential Investment comprising 3 no. 1 bed flats and 1 studio. Current gross annualised income £16,640.

    That is a fascinating definition of "doing well" - 4 flats, for under £40k each! (Avergae £38k)
    ...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'.
  • neverdespairgirl
    neverdespairgirl Posts: 16,501 Forumite
    CluelessJock wrote: »
    Tell me, how was it possible for so many to become deluded, or is it only posters on this site that have fuelled the idea (amongst yourselves) that the property price boom was solely the doing of buy to let landlords?

    That's setting up a straw man. I don't remember a single posted saying it was solely BTL
    ...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'.
  • mr.broderick
    mr.broderick Posts: 3,778 Forumite
    1,000 Posts Combo Breaker
    neverdespairgirl wrote: »
    That's setting up a straw man. I don't remember a single posted saying it was solely BTL

    Not heard the straw man phrase for a while.
    I don't have anything against btl'ers.
    I am all for people having a punt.
    It is what this country is.
    I for one do not believe btl'ers have anything to do with high house prices.
    In fact i am thinking of buying a couple of houses at the moment to rent out.
  • Gorgeous_George
    Gorgeous_George Posts: 7,964 Forumite
    Part of the Furniture Combo Breaker
    neverdespairgirl wrote: »
    That is a fascinating definition of "doing well" - 4 flats, for under £40k each! (Average £38k)

    I think an average of £38K is 'doing well'. I wouldn't pay £20K for a 1 bedroom flat.

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • neverdespairgirl
    neverdespairgirl Posts: 16,501 Forumite
    Do you not reckon that £38k is likely to be a big drop from previous sold prices?
    ...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'.
  • baileysbattlebus
    baileysbattlebus Posts: 1,443 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    BTL

    There has been a major change in tenure since the beginning of the 20th century. Owner occupation has grown from 10% to 70% of the housing stock; private renting has declined from 90% to less than 10% in the mid 1990's. (Commons written answer / Sir George Young)
    There has always been private rented accommodation and at one time an awful lot more than there is now - and someone had to own them.

    It is around 12% (probably just over) of the housing stock now - so hardly massive growth in last 10 or 12 years - but it has grown.

    From the Engish Housing Survey
    In 2007 there were 14.5 million (70%) owner-occupying households, 3.7 million (18%) social renters and 2.6 million (12%) private renters in England. Although the overall proportion of private renters has remained at 12%, the number of households renting privately has seen a 4% rise on 2006, from 2.5 million to 2.6 million.

    So there are roughly 2.6 million BTL properties that are occupied, it doesn't how many are unoccupied. The government say there are over 500,000 private landlords.

    Between them they have 1.103 million mortgages and of those 1.1% is more than 3 months in arrears - (courtesy council of mortgage lenders) hardly catastrophic at the minute.

    But with 2.6 million households living in private rented accommodation - if there were no BTL where would these people live? Not all of them would be in a position to buy or would want to buy. If the 1.1% of landlords who are 3 months+ in arrears get repossessed - where do the 26600 households go who will be evicted. It may not sound many, but I guess it is the population of a small town.

    When you read opinions on this board BTL is viewed as the spawn of satan and blamed for vitually everything from FTB's being unable to buy houses to rampant house price inflation. IMO, BTL does have a place in our housing market but I believe it should be more regulated than it is now.

    Can't believe I've just written this!!!! But hey ho............
  • neverdespairgirl
    neverdespairgirl Posts: 16,501 Forumite
    baileysbattlebus wrote: »
    Between them they have 1.103 million mortgages and of those 1.1% is more than 3 months in arrears - (courtesy council of mortgage lenders) hardly catastrophic at the minute.

    That's 10,000 or so 3 months plus in arrears - sounds like a lot, to me.
    ...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'.
  • Gorgeous_George
    Gorgeous_George Posts: 7,964 Forumite
    Part of the Furniture Combo Breaker
    I'm making a huge assumption here but, generally speaking, LLs should be in a better position to make mortgage payments than owner-occupiers.

    If an owner-occupier gets into debt or loses their job, their mortgage may become unpayable. A LL should be able to pay the BTL mortgage providing he or she has a rent paying tenant.

    I treat my BTL like I traet my home (no, I don't leave my pants on the bathroom floor). Just as I have an emergency fund for unforeseen circumstances at home, I keep a few quid aside for problems with my BTL. I owe it to my tenant not to jeopardise her home by my incompetence.

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • baileysbattlebus
    baileysbattlebus Posts: 1,443 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    residential mortgages

    1st half of 2008


    Number of residential mortgages
    11,741,000

    of which 1.33% are more than 3 months in arrears

    that's a lot.
  • neverdespairgirl
    neverdespairgirl Posts: 16,501 Forumite
    It is indeed. Put those two figures together, and you have something like 120,000 properties with more than 3 months' arrears.
    ...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'.
This discussion has been closed.
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