Struggling BTL Investors

Generali

seven-day-weekend wrote: »

I haven't read the thread concerned and know nothing about economics, so tell me how a BTL investor going bankrupt will enable first-time-buyers to get on the property ladder?

In my own limited opinion, should hope that they can keep their properties which are providing a rented home for those who wish it.

I am not a BTL investor.

Because if a BTL investor goes bust then assets will be sold in an attempt to repay his debts.

They may be bought by another BTL investor or bought as a PPR. As a distressed sale, ultimately the asset will be sold at whatever price can be achieved.

If the buyer is an FTB who was renting then it reduces the number of people looking to rent by 1 and the number of rental properties by 1. If the buyer is a BTL then the ratio of BTL/rented properties is unchanged (assuming our new LL can find a tenant).

People who are holding out for house prices to start rising again will be undercut by this forced seller. FTBs can bid at this realisable market price rather than the assumed market price that some sellers are holding out for and not selling at.

silvercar

Without BTL, where would all the STRs live?

If BTLers are depriving the FTBs of a home, aren't STRers depriving the lifetime renters of a home?

RobertoMoir

leveller2911 wrote: »

YEP IM RIGHT AGAIN.....GREED...GREED...GREED.......WHY DO YOU NEED ALL THAT KENNY.???..SEEMS LIKE ITS JUST A GAME TO YOU....ITS PEOPLES LIFES TOO

YOU SOUND LIKE ANOTHER NICOLAS VAN HOOKSTRATEN (forgive the bad spelling) I can just picture the fur coat and big cigar...lol

Wow. I'm actually more inclined to be anti-"BTL emperor", but frankly you make me embarrassed at the idea that I'm on the same side of the discussion as you.

Agree with what he's doing or not, from this thread, Kenny appears to have his facts and figures to hand, and appears to have what was a reasonably sensible business plan, certainly far more so than a lot of other BTLers I've seen. Buying and doing up derelict homes that most FTBers wouldn't touch with a 10 foot bargepole actually sounds like quite a reasonable way to expand a propery portfolio while doing little to no harm to the prospects of FTBers. Well, reasonable prior to the wheels falling off the market, I mean.

You're the one who seems to be treating this like a game, your little outburst above sounds more like playground name-calling than anything else. Actually, scratch that, I'm doing a grave disservice to playground name callers by associating their good name with yours.

ixwood

Prices only went so crazy because of all the get quick rich wannabes buying multiple properties at whatever price for their portfolios and pensions. There was no fundamental shortage of properties (i.e. supply), just increased demand from BTLers and easy credit.

If a BTLer goes bust and 15 repossessed properties (probably in the same area) come to market, then that's a big surge of supply which will affect prices.

Kenny4315

neverdespairgirl wrote: »

Was it?

OH sold up August and Sept. 2007. I thought the peak was after that, but I could be wrong.

FTSE peaked in april/may 2007 went down and went back to approx same level in sept, in meantime I had cash invested in trough.

Sold previous main residence in sept 2007, also the housing peak.

edgex

Generali wrote: »

Well lots of people (most people?) invest in their own business using borrowed money. Most 'proper' investors would invest in UK shares using leverage (CFDs) as well for tax reasons. BTLers (for the most part) put in money to start with. Especially the reviled Amateur Landlord (TM).

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.

DawnW

edgex wrote: »

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.

There is a market rate for rentals, which varies according to the area and the amenities provided by the property. It has nothing to do with any mortgage that there may be against the property. If a 'BTL' tried to charge way above this going rate, they would be unlikely to get a tenant! In my area, there are loads of properties for rent, and prospective tenants can pick and choose. Why would they pay what they felt was unreasonable?

Kenny4315

bob79 wrote: »

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.

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.

ad44downey

seven-day-weekend wrote: »

I haven't read the thread concerned and know nothing about economics, so tell me how a BTL investor going bankrupt will enable first-time-buyers to get on the property ladder?

.

It's basic economics really. If Buy to let chancers are forced to sell, prices drop and so more normal people are able to afford to buy their own place.

Kenny4315

leveller2911 wrote: »

, been self employed for 22yrs, I work around 55hrs a week, earn a decent wage .I would still love to own my own house and due to rediculous local prices I havent played the "Game" ive just saved... ........

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.