Struggling BTL Investors

pickles110564

leveller2911 wrote: »

Damn,Blast......I just knew Id be sussed out..Thanx for that boys7en...

would just like to say though,it was only cheese and biccys....(stilton):rotfl: (yep another smiley !):beer:

Times must be hard, thought u said that you saved.

agal

Dithering_Dad wrote: »

Sorry, it is a hangover from my days developing Neural Networks and machine learning simulations - in the old days when I.T. was interesting.

Back then it was all Axioms, Soma, Dendrites and Neurons.

Surely you mean axons and not axioms?

clk299

To be fair though, most FTBs are hardly going to take on a ruined wreck of a place and do it up to decent standards. If you are BTL so you can do it as a business, well done you if you manage it because it's a hard job and NOT the cash cow some woudl have you believe; if you are doing it as a sideline taking on a ruin and doing it up then you're doing the world a service really! What is worse IMO is people who bought up properties ready to move into that would otherwise have gone to FTBs and then let them out and not bothered re being a good landlord or maintaining the property, overextending themselves then expecting to be bailed out now the going has got tough. You get in, you sort yourself out.

Oh, and I'm saving for a deposit, hoping that I can buy for not more than £100k and then I will only be borrowing 75% of the price of my first home which will be 2.5 times my current salary (and am hoping for promotion this year!) which is entirely doable!

bob79

Kenny4315 wrote: »

2. the professional/sensible BTL - these guys provide a service, are not in trouble and are in it for the long term. If it where not for these guys, there would be alot of young professionals sleeping on the streets.

You don't really believe that last bit do you?

If it wasn't for BTL, these young professionals could have bought a home instead of being more or less forced to rent a flat from a BTL landlord. And now these young professionals -through their taxes- might end up paying the bill for bailing out BTL. They are being screwed over twice.

Don't get me wrong, in principle I have nothing against BTL. At certain points during one's lifetime it makes sense to rent, so there need to be landlords. But during the last couple of years BTL has gone wayward and a massive shakeout is now needed.

clobber_2

Some of us young professionals are renting because we choose to. I am, partly because I expect house prices to drop, but also because the very nature of our jobs means that Mr Clobber and I are looking at at least 5 years of long hours, shift work, and moving around the country - it doesn't add up for us to buy at the moment, even if we do get offered a stonking bargain.

I would not be eligible for council housing (and rightly so) so I depend on good private landlords to keep me out of crappy hospital accommodation.

There are many reasons to not buy a house, prices pushed up by BTLs are not one. The reason so many amateur eejits rushed onto the bandwagon is because property prices were already booming so it looked like a one-way bet.

If you want to find a sector of society to blame, I would look towards the bankers and the politicians who encouraged an entire economy to be built on the dodgy foundations of easy credit.

leveller2911

If you want to find a sector of society to blame, I would look towards the bankers and the politicians who encouraged an entire economy to be built on the dodgy foundations of easy credit.[/quote]

I dont agree with the above part.

No bank,government or any other institution forces anyone to borrow more than they can afford to re-pay.After all we have all been educated and can think for ourselves......or can we????

We as individuals have to make the choice,you can blame banks etc for a lot of things but im yet to walk into HSBC or Nationwide BS and forced to borrow money...

We have to change ourselves,break the circle...........

mvengemvenge

clobber wrote: »

If you want to find a sector of society to blame, I would look towards the bankers and the politicians who encouraged an entire economy to be built on the dodgy foundations of easy credit.

This quote from journalist Liam Halligan was something I didn't know about...

"Above all, we need to re-introduce the Glass-Steagall Act of 1933. This legislation – the centre-piece of America's response to the 1929 Wall Street crash – was copied across the Western world. Glass-Steagall prevented commercial banks – which take in deposits and service ordinary firms and households – from engaging in the high-risk speculative activities undertaken by investment banks. In the early 1990s – after huge lobbying by Wall Street, and lots of ridiculous talk about "freedom" – the legislation was repealed. No other single action has done more to cause this crisis".

I think if you combine something like that with Thatcher's freeing-up of the markets and 'no such thing as society' and dog-eat-dog mentality, it was always going to end in tears.

Kenny4315

ad44downey wrote: »

They only borrow to buy one property though, i.e. somewhere to house their family. They don't use the equity in the first one to buy loads more property in a poncy pyramid scheme.

P.S. You may think you paid below 'market value' but that 'market value' was artificially skewed upwards by people like yourself feeding the bubble for your own selfish motives..

I sold one on the same street that was half the size last year for what I paid for the other two. Another a few doors up has sold requiring for £615k plus £250k on refurb.

I never release capital from my main residence and never will, isn't is not tax efficient.

Sometimes you have sensible arguements but the whole resistance to anyone with a BTL is simply hog-wash. I didn't feed the bubble quite the opposite if I bought well below market value. I had three on the same street until I sold one sept 2007, so am pretty clued on market value.

Kenny4315

My response on house prices Posted in 2006. As you can see I have a balanced view of economic and financial matters, based on some degree of factual information not just being blind to reality.

Quote:
Originally Posted by nmiah786
I dont see that situation happening just yet......or anytime soon....I'm sure I'm not the only one with that view!

Well I am pretty certain that it will occur (house price correction). I have concluded that average Joe Public in terms of financial astuteness are like sheep and will follow the latest trend, whether buying or selling, or the latest panic buying or selling. This is true for most investments, shares and houses, bonds, etc. Check out the following FTSE crash, current rising house prices, late 80s boom and then fall, these are cases of sentiment/speculation outweighing financial sense.

Your not skint so why have you been waiting to buy ?? It's because you know as well as I that house prices are substantially over-inflated. Eventually the sheep will be led to the slaughter ! But unfortunately it will take some normal guys, unlucky to buy at the wrong time with them but who have had to buy out of need.

My last prediction on FTSE year end position was pretty accurate when market was just under 5300 back in early July I stated that it would be 5600ish at year end, it broke through this in the last couple of days trading of the year, finishing at 5618. The stagnation I predicted for the housing market is now being seen, my prediction is that some people will soon be waking up to some rather alarming news regarding house values which are going to seriously put the wind up them and then the inevitable downturn will start, slowly at first (as it is now) but speeding up as panic sets in. My house isn't worth £200k anymore its worth £190k, no its worth £185k, oooooohhh shiiiiiiiiiiiii !!!

Do not hold your breath on interest rate stability being able to bail these people out, there are too many uncontrollable factors, energy costs, growth in other economies (US, China, etc), Oil issues, UK tax issues. Even small increases in interest rates could ruin many people who have had a remortgage and spend spend spend mentality, or those who are over extending themselves.

Quote:
Originally Posted by Kenny4315
In short once the situation occurs, whenever the fall hits, the outlay previous should be totally disregarded from a pure investment perspective. All prior costs are sunk (in finance terms), only future costs and revenues should be considered, against any other alternatives (shares, deposits, bonds, opening a strip club for polar bears, etc).

I have done multi-million pound investment appraisals, and am a qualified straight A grade chartered management accountant, I know what should and should not be included/excluded from investment appraisal decisions. Whether sentimental BTL's want to hope for the best is up to them, but I would not and have not !

Last edited by Kenny4315 : 01-01-2006 at 9:35 PM.

Kenny4315

Incidentally I took my shares all out last april 2007. At the peak, just for completeness.