clear deterioration in the performance of the BTL index

brit1234

The UK's historically strong BTL market could be faced with big challenges over the next year...

Posted: 9:14 am, 13th February 2009

The UK's historically strong BTL market could be faced with big challenges over the next year...

In a recent report, Moody's rating agency revealed that key performance measures indicate that UK buy-to-let delinquencies increased during Q4 2008.

Moody's admits that compared with the UK non-conforming RMBS or the UK prime RMBS market, arrears have been relatively low in the UK BTL market, excluding B&B's Aire Valley Master Trust.

Moody's senior associate Daron Kularatnam noted: "There was a clear deterioration in the performance of the BTL index and a quickening pace in the increase of 90+ delinquencies during Q4 2008.

"The index for the market stood at 2.52 per cent at the end of the quarter, compared with 1.65 per cent in Q3 2008, and 0.63 per cent in Q4 2007."

Strong performance

However, the rating agency cautions that the history of data in this market is relatively short and does not cover a full economic or housing cycle. There is now a pattern of increasing arrears in the BTL market and the gap with the wider market seems to be narrowing.

Moody's Economist Nitesh Shah says: "While the UK BTL sector has maintained a strong performance to date, it has yet to be tested in an economic recession with falling house prices.

"UK house prices continued to fall in Q4 2008 and rental price inflation has stayed flat over the past year. With the economy now in recession and unemployment rising, Moody's believes that tenant demand and tenant's ability to make timely payments will be tested over the coming quarters."

http://www.landlordexpert.co.uk/index.php?news=2369

RomansProperties

I must be the first landlord up today so I thought I would post some good news

According to new figures an increasing number of buy-to-let landlords are making a profit thanks to recent cuts in the bank base rate and a high demand for rental properties...
Posted: 9:51 am, 13th February 2009

According to new figures an increasing number of buy-to-let landlords are making a profit thanks to recent cuts in the bank base rate and a high demand for rental properties.

Latest figures show that 75% of landlords are making a profit and profits are up 5% on the last quarter, which represents a return to the same period in 2007*.
http://www.landlordexpert.co.uk/index.php?news=2370

chucky

I agree Romans... rates are 400% less than they were last year which just means more profit

Brit you sure have dedication in your fight - nearly 3 years now!!
http://www.landlordzone.co.uk/forums/showthread.php?t=6916

RomansProperties

My best rate is now 1.34% which leaves me with a £63 monthly mortgage payment.

chucky

RomansProperties wrote: »

My best rate is now 1.34% which leaves me with a £63 monthly mortgage payment.

with Mortgage Express i take it?

RomansProperties

Yes Mortgage Express.
The letter they sent offering to not charge the early repayment went straight in the bin.
I am staying put!

I have 2 good ones with Bank of Ireland as well.
They are 0.85% above Base Rate

stevetodd

RomansProperties wrote: »

My best rate is now 1.34% which leaves me with a £63 monthly mortgage payment.

Mine aren't as good as yours but I do have one close at 1.39% and the others are at 1.68% which is still great. But you are right it's good news for landlords (and of course owner occupiers too)

Dithering_Dad

Plus if interest rates start to climb (as some of the HPC guys are saying), you can quickly grab a long-term fix and enjoy another boom as mortgages become prohibitively expensive to FTBers who are then stuck even longer with renting.

It looks like you guys simply can't lose.

RomansProperties

Maybe we should talk about worst rates.
I have 2 properties at 6.49% until 2010 and 2011

robmatic

Latest figures show that 75% of landlords are making a profit and profits are up 5% on the last quarter, which represents a return to the same period in 2007

I might just be a 'glass half-full' person but that reads to me as if 1 in 4 landlords are losing money. Not exactly a rock solid investment proposition!

RomansProperties

I wonder how many of that 25% are forced landlords who cant sell their property so rent it out.
Putting money towards the mortgage payments each month.
Hopefully their deals will end soon and they can go onto SVR rates which should bring them back into profit