January Nationwide MoM -0.1% YoY -1.1%

IveSeenTheLight

bingobob777 wrote: »

If the average FTB is buying all the 3 bed semis, who is buying all the 1 and 2 bed flats?

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.

Mallotum_X

What investors?

Where is this sudden desire to get into BTL coming from, individual investors or institutional? If the desire and funds existed then do you not think the investors would be "snapping" these up now. (after all with the price falls so far these must be the best value they have been in years)

Or perhaps the investors/banks etc have been burnt enough on 1 and 2 bed flats and will watch prices fall further before doing anything....

But if flats fall why does that mean houses will stay stronger? Or maybe falling flat prices will have a drag effect on smaller houses, i.e. why pay so much more for a 1/2bed house when a flat is so much less, but then if 2 bed houses fall what happens to 3 beds, will they stay strong?

The investors coming in to prop the market up makes no sense at all. (other than in some small pockets like central london but thats really a very different world to the rest of the UK)

The finance simply does not exist for this.

IveSeenTheLight

http://www.cml.org.uk/cml/media/press/2770

Buy-to-let lending rose by 12% in the third quarter, according to data published today by the Council of Mortgage Lenders, supported by ongoing demand for rental property against the backdrop of a dysfunctional owner-occupier market.

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. Compared to the third quarter of 2009, the volume of lending was up 14% and the value up 33%, from 23,700 and £2.1 billion respectively. Buy-to-let lending is low by historical standards - running at levels last seen in 2002 - and the market will likely continue to show growth into 2011.

At the end of September, there were 1.29 million buy-to-let mortgages outstanding, an increase of 2% from the previous quarter. The proportion of loans in arrears of more than 1.5% of the balance remains broadly unchanged at 1.45%, while repossessions (at 0.12%) and the appointment of receivers of rent (at 0.10%) were also virtually unchanged from the previous quarter.

Buy-to-let demand appears likely to increase, which is unsurprising in an environment where the demand for rental property will be boosted by the access problems that first-time buyers face in the owner-occupier market.

Commenting on the figures, CML director general Michael Coogan said:

"We would expect buy-to-let demand to pick up further if current rising rental trends continue and house prices remain broadly stable. However, there is short term uncertainty as a result of the unresolved debate on housing benefit and landlords' response to new limits.

"The bigger question is whether there will be sufficient supply side capacity to meet that demand, as the number of buy-to-let lenders dwindled in the credit crunch after 2007 and is yet to be fully restored.

"However, it is clear that in a market where access to home-ownership has become more difficult, the private rental sector is experiencing, and will continue to benefit from, high levels of demand for good quality housing."

Mallotum_X

Shock an industry body talking the market up...

The headline is 12% increase, but then it contradicts itself by saying 2%, muddled figures proving very little.

Do you seriously think this is the saviour of house prices?

Generali

Mallotum_X wrote: »

The headline is 12% increase, but then it contradicts itself by saying 2%, muddled figures proving very little.

I think you misread it.

The 12% rise is the increase in the value of BTL loans in Q3 compared to Q2 2010.

The 2% rise is the increase in the number of BTL loans outstanding at the end of Q3 2009 vs Q2 2009.

The numbers are a bit old. The new ones are out on Thursday next week.

Mallotum_X

Generali wrote: »

The 2% rise is the increase in the number of BTL loans outstanding at the end of Q3 2009 vs Q2 2009.

I dont think thats what its saying, its Q3 2010 vs Q2 2010, surely?


So in the small bounce we had in house prices last year there was a small bounce in the level of BTL. Which co-incided with a modest increase in transaction levels (typical over the summer months).
The trouble with these reports if without a fuller picture you cant really take much from it other than their message that "BTL is booming again".

How many of the new BTL mortgages are with reluctant landlords who have moved but cant sell the old place for instance.

Thrugelmir

Mallotum_X wrote: »

Shock an industry body talking the market up...

The headline is 12% increase, but then it contradicts itself by saying 2%, muddled figures proving very little.

Do you seriously think this is the saviour of house prices?

I wouldn't read the statement as talking the market up. Statement is merely factual with plenty of caveats.

In 1995 there were only around 300,000 commercial loans for the purchase of residential property. So despite there now being some 1.2 million mortgages outstanding. If current lending is back to 2002 levels. The sector is in effect in decline.

IveSeenTheLight

Thrugelmir wrote: »

If current lending is back to 2002 levels. The sector is in effect in decline.

Can you expand on your view that the sector is declining.

Certainly not how the latest release read, it increased on the year before

This quarterly rise of 8% by volume and 12% by value is the second consecutive quarterly increase in lending.
Compared to the third quarter of 2009, the volume of lending was up 14% and the value up 33%

IveSeenTheLight

Mallotum_X wrote: »

Shock an industry body talking the market up...

The headline is 12% increase, but then it contradicts itself by saying 2%, muddled figures proving very little.

Do you seriously think this is the saviour of house prices?

I've not inferred BTL is the saviour of house prices.
I simply backed up my point which you queried on "What investors?"

As Generali showed, I too think you have missread the figures

Generali wrote: »

I think you misread it.

The 12% rise is the increase in the value of BTL loans in Q3 compared to Q2 2010.

The 2% rise is the increase in the number of BTL loans outstanding at the end of Q3 2009 vs Q2 2009.

Thrugelmir

IveSeenTheLight wrote: »

Can you expand on your view that the sector is declining.

Certainly not how the latest release read, it increased on the year before

The peak in BTL has been and gone on the back of interest only loans and easy equity release.

Residential property investment is the realm of those with capital not the leveraged amatuer investor.

Back to how it used to be in fact.