what constitutes a BTL'er??

Thrugelmir

Z1ppy wrote: »

There appears to be a general feeling that BTL'ers are bad here. i dont want to get into the rights and wrongs but.

what constitutes one??

My partner and i bought our first house and lived in it for 12 months. We wanted to move to a larger place but if we waited to sell, we might have lost the house we wanted.

So we bought the second house and are renting our first house.

We are investing in our second house to make it our home and attempting to add value in a difficult market.(conservatory, new kitchen, bathrooms and redecorate) current LTV is approx 85% not withstanding the below comments

Our first house is almost certianly in negative equity now however we have set aside an amount of money (approx 33% of currenet market value) should the need arise to sell the first house allowing us to bring back into positive equity. (Obviously this money is against our home mortgage thus reducing our term and saving interest payments).

We have permission to let from our lender and have no intention of buying more property (2 is more than enough headaches for me!)

so... should all the negative comments about BTL'ers apply to me and do i need to develop some thicker skin?

During the boom a lot of people believed that they were adding value by "renovating" property. When in fact it was the movement in the overall market that was increasing property values. The work done was in fact not returning any profit. May have made the house more attractive to sell though.

I must enquire why you're you've hung onto to your first house. If you are losing capital and getting deeper in negative equity. Then why not sell? As at some point you will need to dispose of the property.

So in a sense your are a BTL'r, even if only by default. As you've made the assumption that owning property was a no lose investment.

Heyman_2

IveSeenTheLight wrote: »

With this lower percentage, I don't understand how you perceive there to be such a large problem with a private rental market in the future.

Would be interested to see that graph for the last 4 years as it only goes to 2005, but on that evidence you would have to say that in a market sense there doesn't appear to be a 'problem' as such, if anything lack of supply will be the problem.

It's just that huge upsurge in BTL which bothers me a bit (i.e. 50,000 to 1.3 million in 10 years) - I just feel there's going to be a price to pay for that excess although I don't know what it is yet!

Z1ppy_2

Thrugelmir wrote: »

During the boom a lot of people believed that they were adding value by "renovating" property. When in fact it was the movement in the overall market that was increasing property values. The work done was in fact not returning any profit. May have made the house more attractive to sell though.

good point although we are making our second house a home and refreshing what was a house built in early 90s and having had no work done at all. removing one pink, one blue and one grey bathroom suite and replacing with fresh modern white was more a necessity to keep us sane and healthy rather than in the interest of adding value for resale.

furthermore, the kitchen / dining room was poorly laid out and falling apart hence getting the same treatment, which is not being done to "add value" as the cost of the repairs i am sure will be more than the value added in todays market.

Thrugelmir wrote: »

I must enquire why you're you've hung onto to your first house. If you are losing capital and getting deeper in negative equity. Then why not sell? As at some point you will need to dispose of the property.

the first house is rented out in a desirable area and the rent covers the mortgage repayments. yes, we will need to sell the first property at some point, at the moment rent covers its costs, furthermore, if there was no tennant, we could cover the costs (for at least 12 months) the money we have put aside to bring the first house into positive equity (50K) is working hard against our home mortgage (overpayment with no penalty to withdraw at any time) at the moment so to me it doesnt make sense to sell the first house. i am no financial expert but at 27, if we keep the property for 15 years and contunie to repay the mortgage, combination of repayments and prospect of property prices increasing means there will eventually be some benefit of retaning it!

maybe i am missing something fundemental?


ps, better run and hide now as we have 2 cars (1 x 4x4) and a speed boat!!!:eek:

silvercar

Well I bought out my buyer's buyer home in order to complete a house chain. Does that make me a BTLer or a BTBer?

Its now the home of a tenant who won't be in a position to buy, so its providing security for a family who would otherwise be fairly stuck, given the shortage of social housing in my area.

As a policy decision, it was only available for rent to those unable to buy. None of these dodgy STRs renting until they can elbow the FTBs out of the way in search of their low priced deal;)

purch

so its providing security for a family who would otherwise be fairly stuck

Greed,.........................rampant Greed !!!!!

System

I feel left out, might have to join the BTL game at some point

IveSeenTheLight

Heyman wrote: »

Would be interested to see that graph for the last 4 years as it only goes to 2005, but on that evidence you would have to say that in a market sense there doesn't appear to be a 'problem' as such, if anything lack of supply will be the problem.

True the graph only goes to 2005 and I too would like to see the same stats to the present day.
However the percentage of rental properties in 1981 was 45% whereas in 2005 it was only circa 30%.

Other releases from the CML shows that BTL ranged between 10% & 12% each year in 2006, 2007 & 2008, therefore, I doubt the graph for private rental is likely to increase from 2005. It may have even dropped :eek:

Heyman wrote: »

It's just that huge upsurge in BTL which bothers me a bit (i.e. 50,000 to 1.3 million in 10 years) - I just feel there's going to be a price to pay for that excess although I don't know what it is yet!

True BTL properties has increased, but not by as much as social housing has decreased.

As an anecdote, my gandmother in law had a council house.
We had wanted some refurbishment to the property to allow easier access in her old age i.e. stair lift and walk in sit down shower.
These were refused as the council would have to re-convert when she no longer required.
The only way to make her home more suitable for her was to buy under RTB and then convert as required.
This was done and allowed a further 5 years of her being able to live in her lifelong home until the point she needed to be cared for full time in a home.
The property was then sold to a FTBer and the procedes covered her home care.
The point is that this property was lost to the social housing to a FTBer and no longer available for renting.
The graph shows that the amount of rentable social housing has dropped so where do renters turn to? Well pop along to your local council and they are more happy to cover private rental costs than provide social housing again

I don't believe there is an excess of private rental properties as in essence, they are self regulating in that if there is no market for private rental, investors would sell up.
I believe this open competative market has contributed to increasing the quality of the properties available for rent

shuze

Joeskeppi wrote: »

I feel left out, might have to join the BTL game at some point

welcome to the dark side.....

ess0two

Joeskeppi wrote: »

I feel left out, might have to join the BTL game at some point

Shame on you,although it does have its benefits owning other properties:money:

LydiaJ

I'd love to see a version of that graph that distinguishes between rental properties that are owned outright by their landlords, and those that have mortgages. I don't suppose there's any way of obtaining that information, though.

Surely the essence of the BTL "problem" is the artificial HPI produced by people with quite limited capital nevertheless taking on large numbers of extra properties with large mortgages, isn't it? (Or have I missed something?)