January Nationwide MoM -0.1% YoY -1.1%

IveSeenTheLight

Thrugelmir wrote: »

BTL is a product name created by the Association of Residential Letting Agents.

Commercial lending for residential purchase was available prior to then. Normally the rate of interest charged was around 1% to 2% above that of SVR.

Access to that credit wasn't so readily advertised / available prior to 1996 though was it.

It was an opportunity for lenders to capitlise on additional revenue oppertunities.

IveSeenTheLight

Mallotum_X wrote: »

That really isnt what has been happening though is it.

Local example but works for many parts of the UK.

1 bed flats were selling at about 120k during the latter stages of the boom, and still going to investors. Rental on such a flat was about 500-550. Lets say 550. (now more like 400-450)

Assuming no voids ever, then gross yield before all the various costs was 5.5%

What was the yield after voids, maintenance management charges, agency fees

Canny investors! Really wish i had some of that.

To say they were looking at yield it the most stupid thing I have heard in ages, the BTL boys of the last few years wanted capital appreciation, why else would so many buy in to property that couldnt even pay for itself if you had a void period?

I've shown on occasions many properties that still provide a decent rental return.

Not all markets are good rental markets and you need to assess that individually

IveSeenTheLight

Mallotum_X wrote: »

No i just think you dont really understand what you are quoting.

Its a quarterly quantity change not annual the article states at 2%.
the other stuff is just bigger numbers used in a press release to make it sound 'better' or 'bigger', its what press releases do, try to confuse people with big numbers. Read the article carefully.

cml wrote:

There were 26,900 buy-to-let loans advanced in the third quarter, worth £2.8 billion. This quarterly rise of 8% by volume and 12% by value is the second consecutive quarterly increase in lending

At the end of September, there were 1.29 million buy-to-let mortgages outstanding, an increase of 2% from the previous quarter

One is talking about the increase in advanced lending for the quarter, whilst the other is talking about total value outstanding.

they don't contradict each other as you infer, they're different statistics.

Mallotum_X wrote: »

What is your actual point then, some BTL landlords will buy some of the unsold properties (1 and 2 bed) and this may or may not have any impact on property prices.

Below iss the original point I made, taking the previous persons question on what will happen to 1 and 2 bed flats if FTBers are holding out for larger properties

IveSeenTheLight wrote: »

These properties will still be utilised.
If owner occupiers are not buying and FTBers are holding off / building up a bigger deposit to jump straight to the bigger property, then it will creat a gap in the market and an increased rental demand which would entice investors.

clearly, there will still be FTBer buying 1 & 2 bed properties, whilst if there is a reduction in those owner occupancy transactions levels due to FTBers holding off, they will still need resedential properties to live in in the meantine, expanding a market for residentual property investors.

You then asked what investors which is why I showed the CML stats showing the BTL is still expanding and the expetations are for that to continue.

simple as that

Mallotum_X

So to be clear in your simple world.

FTB will hold off buying 1 and 2 bed flats (due to high prices and lack of finance) and this will lead to BTL investors coming in and filling the gap.

There will be suffient BTL finance available at a low enough interest rate to make a good yield and thus plug the gap.

And the rest of the market will continue at the current low volume levels but current price levels (more or less).

---

Does that sum up what you are saying?

IveSeenTheLight

Mallotum_X wrote: »

So to be clear in your simple world.

FTB will hold off buying 1 and 2 bed flats (due to high prices and lack of finance) and this will lead to BTL investors coming in and filling the gap.

There will be suffient BTL finance available at a low enough interest rate to make a good yield and thus plug the gap.

And the rest of the market will continue at the current low volume levels but current price levels (more or less).

---

Does that sum up what you are saying?

We'll in your simple world, there are no investors, which we clearly can demonstrate there are.

You keep trying to turn this round into prices and it's something I've never commented on in this thread.

I merely tried to explain to you that a contraction in owner occupancy levels in the lower end property market creates a gap in that where are these people going to live.
Investors will see that gap and where applicable it may proove to be a worthwhile invetment opportunity.

Prices may go up or down. My personal consideration is for a relatively second consecutive year of stagnation.

I do think that unless there is a change in the fundamentals, we will see achange in percentage from owener occupiers to rental accomodations

Thrugelmir

IveSeenTheLight wrote: »

Access to that credit wasn't so readily advertised / available prior to 1996 though was it.

It was an opportunity for lenders to capitlise on additional revenue oppertunities.

Finance has always been available. Like any business venture (hence my earlier reference to a business plan) the numbers have to worked through. With various "what" if assumptions factored in to stress test the plan. Spreadsheets make this very easy to do. If you understand the modelling required.

Just like the Dot Com boom. People don't understand the whole picture. Lastminute.com at one point was valued at £523 million. Yet had an annual turnover of £3 million and had never made a trading profit. People are inherently greedy, looking for an easy profit. Those that get in early and know when the time is right to exit make the profit. The remainder suffer the losses.

IveSeenTheLight

Thrugelmir wrote: »

Finance has always been available. Like any business venture (hence my earlier reference to a business plan) the numbers have to worked through. With various "what" if assumptions factored in to stress test the plan. Spreadsheets make this very easy to do. If you understand the modelling required.

Just like the Dot Com boom. People don't understand the whole picture. Lastminute.com at one point was valued at £523 million. Yet had an annual turnover of £3 million and had never made a trading profit. People are inherently greedy, looking for an easy profit. Those that get in early and know when the time is right to exit make the profit. The remainder suffer the losses.

I'm extremely confortable with the risks and rewards for the business and that it caters for an entirely different market fundamentals than dot com or lastminute businesses.

Mallotum_X

IveSeenTheLight wrote: »

I do think that unless there is a change in the fundamentals, we will see achange in percentage from owener occupiers to rental accomodations

But that in itself would be a change in fundamentals, BTL finance would need to be relaxed without any changes to FTB finance. Yields would need to improve (higher rent or lower prices)

Something has to give if the BTL market were to be kickstarted.

Q3 was the best figure (in terms of new BTL mortgages) so far available in the last 12 months, and that represented at the absolute maximum 15% of the market. (assuming all BTL mortgages represent a new purchase, compared to total transactions for the same period). Realistically we must be able to discount that figure. But the data available is very limited, (CML pick and choose what to put in their press releases for some reason....)

Comparing like with like the in 2007 total BTL new mortgages were something like 345k with over 1.2m total transactions. So the level of BTL activity compared to market activity has fallen.

That does not suggest there is an increased demand for BTL, and lets face it 1 and 2 bed new build flats are at the riskier end of the industry.

Thrugelmir

IveSeenTheLight wrote: »

I'm extremely confortable with the risks and rewards for the business and that it caters for an entirely different market fundamentals than dot com or lastminute businesses.

In my experience people with money (capital) move their money where there is money to be made. Taking their profit or losses once the wave has run its course. I was merely illustrating the herd effect.

Doesn't what the business is , at the end of the day the result all boils down to the finance.

geneer

IveSeenTheLight wrote: »

That's your personal opinion without any merit to back it up

:rotfl::rotfl::rotfl::rotfl:Takes one to know one then, doesn't it lite.