The future of BTL

carolt

http://propertyclub.telegraph.co.uk/Page/View/481

Includes:

How much do you expect property prices to fall in 2009?
MB: 11pc on top of the 14pc in 2008.
RD: 10pc overall, but with slightly larger falls for smaller-sized one- and two-bedroom homes. This is where borrowers tend to use high loan-to-value mortgages, and where the credit crunch has bitten hardest. New-build flats have seen above-average falls and values are now returning to occupier-based pricing.
IP: Around a 10 to 15pc drop nationally, however, it is possible that the London market may suffer more because of the jobs currently being lost in the City.
SR: 10pc, but implementation of the Crosby review (which recommended the Government provide guarantees for mortgage-backed securities) could limit the downside. Regional disparity won’t be as great as in the past because this downturn is about mortgage finance.

What will happen to rents over 2009?
RD: The rental market is highly segmented. Markets driven by corporate demand will see rental falls of 10pc plus, as will larger family homes. Most rental demand is in the £500 to £750 a month bracket and here rents have been rising relatively quickly. However, most renters in this market are would-be first-time buyers and are constrained by affordability, so there is a limit as to how high rents can go. Rental growth in this segment was running at 8pc in mid-2008 but this is moderating and rents should remain broadly flat in 2009.
IP: At the moment London is showing the biggest drop in rents, exaggerated by easing at the top end with the loss of City jobs. It is possible, however, that some areas will show increases in rental demand, with owner repossession on the rise. Some areas are likely to find an increasing supply of family homes pushing rents down, particularly around the M25.
SR: Rents are likely to continue to slip, especially for larger houses, where there has been a lot of new supply. Because of that, and because of job losses and wage pressures, London will continue to see the greatest regional rent falls.

FungusFighter

carolt wrote: »

http://propertyclub.telegraph.co.uk/Page/View/481

Includes:

How much do you expect property prices to fall in 2009?
MB: 11pc on top of the 14pc in 2008.
RD: 10pc overall, but with slightly larger falls for smaller-sized one- and two-bedroom homes. This is where borrowers tend to use high loan-to-value mortgages, and where the credit crunch has bitten hardest. New-build flats have seen above-average falls and values are now returning to occupier-based pricing.
IP: Around a 10 to 15pc drop nationally, however, it is possible that the London market may suffer more because of the jobs currently being lost in the City.
SR: 10pc, but implementation of the Crosby review (which recommended the Government provide guarantees for mortgage-backed securities) could limit the downside. Regional disparity won’t be as great as in the past because this downturn is about mortgage finance.

What will happen to rents over 2009?
RD: The rental market is highly segmented. Markets driven by corporate demand will see rental falls of 10pc plus, as will larger family homes. Most rental demand is in the £500 to £750 a month bracket and here rents have been rising relatively quickly. However, most renters in this market are would-be first-time buyers and are constrained by affordability, so there is a limit as to how high rents can go. Rental growth in this segment was running at 8pc in mid-2008 but this is moderating and rents should remain broadly flat in 2009.
IP: At the moment London is showing the biggest drop in rents, exaggerated by easing at the top end with the loss of City jobs. It is possible, however, that some areas will show increases in rental demand, with owner repossession on the rise. Some areas are likely to find an increasing supply of family homes pushing rents down, particularly around the M25.
SR: Rents are likely to continue to slip, especially for larger houses, where there has been a lot of new supply. Because of that, and because of job losses and wage pressures, London will continue to see the greatest regional rent falls.

ABridged version for the hard of intellect:
Future of BTL - none.:rotfl:

Generali

BTL should always have been about cashflow and managing risk.

It became snouts in the trough instead.

Kenny4315

Which landlords are most vulnerable?
MB: Novices without much cash, or experience of dealing with tenants. Those best-placed are savvy professional landlords, many of whom are waiting for buying opportunities.

Exactly what I have been saying for ages, I have a stash of loot hanging around in wait for the RIGHT TIME, which I feel will be around July/August time, with some hard bargaining.

There will be plenty of money still to be made long term in BTL.

RomansProperties

We too are hoping to increase our portfolio later on in the year.
We have always looked at each property in terms of cash flow.
We are 100% full and the rent levels are actually up on last year.
I personally think they should re classify buytolet and exclude people who went to investment clubs and bought city centre properties.
Then most buytolet would probably work and the repo levels would be loads lower.

ad44downey

BTL should be outlawed. One property per person/couple instead of a load of greedy swine commandeering all the available housing stock

drbeat

A friend of mine works as a carpet cleaner for rental properties. He was telling me that work is dropping off because the Poles and Chinease that did most of the renting are now !!!!!!ing off back to their own countries.

chucky

Kenny4315 wrote: »

Which landlords are most vulnerable?
MB: Novices without much cash, or experience of dealing with tenants. Those best-placed are savvy professional landlords, many of whom are waiting for buying opportunities.

Exactly what I have been saying for ages, I have a stash of loot hanging around in wait for the RIGHT TIME, which I feel will be around July/August time, with some hard bargaining.

There will be plenty of money still to be made long term in BTL.

that makes two of us :beer:

Gorgeous_George

FWIW I think BTL has a strong future.

Extremely low interest rates make alternative investments less attractive. Certainly not much point having your life's savings in the bank or building society at the moment. Throw in falling house prices and suddenly BTL could become a much better option.

Last year, a 6% yield looked rather poor against savings accounts paying similar, or better, rates of interest without the hassle of having tenants. If prices fall 30% (and rents stay the same) that yield becomes close to 8.6%. With mortgages rationed, I believe the rental market will remain strong.

Of course, BTL mortgages are quite expensive at the moment (typically around 7%). High leverage BTL LLs are probably a thing of the past but those investing their own money could do rather well.

I believe, more than ever, that renting is a good thing and should be encouraged if we are to avoid rampant HPI and the trauma of repossession that generally follows. However, the rules need to be reviewed to give tenants more security (of tenure) and fast track access to repairs. I even support the requirement for energy performance certificates for rental properties.

GG

Generali

ad44downey wrote: »

BTL should be outlawed. One property per person/couple instead of a load of greedy swine commandeering all the available housing stock

Who should rent out housing then? What happens if I want to rent a holiday home for my family or I need to work somewhere for a couple of months?

wigglebeena

Maybe it's all supposed to be nationalised. Except with this government's attitude to social housing, they'd sell it off to their mates in private industry in the name of efficiency.

I guess individuals and small businesses having property and making money is evil - it's much better when it's huge megacorps, that way MPs can get the benefit of bungs and directorships.

Am I the only renter who doesn't hate BTLers? Wanting to invest and make money isn't evil, although you might call it greedy - they're not the same thing. I do hope none of the critics ever do the Lottery, BTW? That would be filthy wicked immoral greedy and dirty, wouldn't it? I'm assuming they donate all their excess funds beyond the bare minimum for existence to charity, too.

(I do think some BTLers have been, er, silly, but that's a different issue...)