Bears, Buy to Lets landlords and House Prices.

mbga9pgf

damanpunk wrote: »

So we aren't to believe that any BTL investors are doing ok but we should believe the other people have 50-100k+ deposits?

I can prove it if you really want me to....

damanpunk

Nah your alright, I wasn't singling you out. Just a blanket statement where everything BTL on here is questioned yet other stuff is taken as gospel

mbga9pgf

Fair point.

chucky

to go back to the OP question...

bluey890 wrote: »

If the Bear's posts are true, why aren't the forums very own BTL landlords stressed and desperately selling their housing portfolios?

because BTL repossessions are currently only 0.35% of the BTL market not the 20%/25% that people claim on here

The BBC reported that this equated to 0.35 per cent of buy-to-let properties being taken back by lenders.

http://www.ftadviser.com/FTAdviser/Mortgages/Products/BuyToLet/News/article/20090611/bfc44596-5673-11de-8e2b-0015171400aa/BTL-borrowers-losing-homes-faster-than-rest-of-market.jsp

misskool

damanpunk wrote: »

Nah your alright, I wasn't singling you out. Just a blanket statement where everything BTL on here is questioned yet other stuff is taken as gospel

There is a special amount of bile for BTL on this forum

BTL "should" be a carefully managed business with contigencies and reserves in action or part of a diversified investment portfolio but the last few years have hyped it into a get rich quick scheme driven by the rising house prices. A lot of the posters on this board are quick to point the blame at the get-rich-quick schemesters and forget that some of the BTL brigade actually run a business and provide housing for those who can't/shouldn't/won't buy and/or don't qualify for social housing.

It's a really touchy subject and one that doesn't help when all BTL investors are lumped into the same category.

misskool

mbga9pgf wrote: »

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Why does the house price/earnings ratio HAVE to be about 3.5? Why does every graph/bears have that number to drop to?

surely the wages/spending capacity and the fact that most households are now dual income show house price/earnings ratio should/could be higher?

I'm not baiting anyone, I just don't see how a ratio that is used in 1940s/1950s should still be valid today.

edit to add: I find your schtick graph remarkable offensive. If you want to have a proper reasoned discussion, please don't descend to a sexist pig, it makes you look weak.

damanpunk

I'd leave him alone, he was the exact same on the first website I came across him on, www.uk-mkivs.net infact heres one of his posts where he wanted to be a landlord himself http://uk-mkivs.net/forums/p/137320/916622.aspx#916622 the rest were like on here, always after some drama.

The only reason he keeps coming back here is because for some strange reason a small group of people take him seriously!

julieq wrote: »

Graham, you're clueless, sorry.

You invest forward from today's position, and the past is irrelevant. That is a simple basic tenet of investing.

I have no idea why the bulls are talking about capital growth, because I WASN'T. I was talking about capital STAGNATION over a period of years but pointing out that FROM TODAY'S POSITION, BTL is a good investment when compared with pretty much anything else. In my opinion.

Anyone buying at the peak has lost money, obviously. Maybe 30%, let's say that for the sake of argument. They can crystallise that loss and put the money on the remaining 70% in mgba's bank at 3.5% a year, or they can take rental income at a higher rate, probably getting the whole capital back eventually (15 years or so maybe).

It's better to take a better investment, regardless of the history of your investment.

You're really stuck in a comic book view of BTL. From the CURRENT SITUATION it looks like a reasonably smart thing to do, not least because people like you - the herd - are running scared from it, there is not much competition for property now after all. If there is growth, and there may well be over 7-10 years, then that would be a bonus, but you don't need that to make money.

Cleaver

mbga9pgf wrote: »

Hands down, my clear favourite incomprehensible and pointless graph of the recession so far. Going to take some beating methinks.

Harry_Powell

julieq wrote: »

No, that's complete and utter rubbish. It seems to be my role in life to explain this every two weeks, but here goes again.

It's hugely unlikely that capital values will depreciate for ever, in fact as things are they appear to be stagnating but even that doesn't need to be true to make a profit.

So the only question is at what point capital values get back to the same as they are NOW. If you're getting 7% of the paper value of the asset back in rental, and you think that prices will get back to where they are today in 7 years, then you have something that looks a lot like a 7 year 7% bond. I'd take one of those if it was offered by a bank, I'd certainly rather have one of those than dabble in the stock markets.

The one way that you make capital values actually matter is to take the loss. Any BTL investor who doesn't actually have to sell would need his or her bumps felt if they sold now, they might as well bank the profit from rental, have their mortgage paid for them, and wait for the inevitable upturn.

BTL is a decent long term play today (which is the only time you can make a forward investment decision on it, even if you bought at the top of the market). It's arguably the best investment around just at the moment if you discount a catastrophic slide in the market (which in itself is made more unlikely by the fact that BTL is a decent investment, values will tend to level off at a particular yield point).

I like reading julieq's posts, she takes the trouble to explain things clearly and she also talks a lot of sense. While I'm not a fan of BTLers I certainly don't subscribe to the idea that just because house prices are falling/stagnating, that it has a big impact on rental income. I'd personally love to pick up a distressed sale from a former BTL landlord, but I'm not going to waste time trying to convince myself that they're all in financial trouble and about to go under, because they're not.

Harry_Powell

Graham_Devon wrote: »

Load of bull, sorry

Especially the arguably the best investment claptrap! Keep convincing yourself, though you won't us!

Can you clue us up on what you consider is a better investment at the moment?