Impact of House price crash..?

Guy_Montag

aderbyshirelad wrote:

Can anyone here confirm what percentage of the UK housing stock is actually BTL and not owner occupied? I could swear I read somewhere that it was 8%, but I can't recall if that was the proportion of mortgage lending that was for BTL or whether it was the proportion of housing stock held by BTLers.

If it is such a "small" percentage then would it be far-fetched to conclude that the overall effect of BTL "pricing" FTBs out of the market is rather over-egged?

Not sure about how to define BTL, but as of 2000, 71% of UK housing stock was owner occupied. I don't suppose it has changed much in the last 6 years, but I may be wrong. Unfortunately the ONS doesn't seem to feel the need to keep it's stats up to date.

I guess the remaining 29% includes 2nd homes, btl, housing association & council houses.

Currently half of all repos are btl :beer:

Another point that people here seem to have difficulty grasping, is that there is a relatively fixed housing stock. If some housing is repo'd from a btl, it doesn't disappear, it gets bought up by another btl'er, an owner occupier or (& this is the only way it is taken out of the loop) as a second home. If a bank repo's a rented flat, they will want to keep the tenant in as long as possible, though they may kick them out shortly before auction.

ollyshaw

Well done for asking the question smallstu! Whatever anyone thinks about house prices it is important to understand what the possibilities would be if prices fell. It may not be an issue, for example the poster above who said that she will stay in her property for the long term. However you should be aware of what will happen if prices do fall. Then make your judgement.

Olly

BobProperty

I agree with aderbyshirelad, the figures I've seen say 8% BTL so the argument that "all" these BTL landlords are taking property away from FTBs is pretty thin.
Guy - you missed tied and Crown accommodation from your 29% list, which again indicates that BTL is hardly the immense force some people make out.

Sisyphus

8% of the housing stock being BTL is not necessarily 'small'. It would be interesting to see historical figures. Any assets price can crash with only a small % of the available volume being transacted. (English?).
it is also probable that BTL is a much more dominant part of urban markets such as in London and has been the main driver of the growth.

scorpio_princess

BobProperty wrote:

I agree with aderbyshirelad, the figures I've seen say 8% BTL so the argument that "all" these BTL landlords are taking property away from FTBs is pretty thin.
Guy - you missed tied and Crown accommodation from your 29% list, which again indicates that BTL is hardly the immense force some people make out.

But you surely can't deny that it IS a factor. Although BTL can't be blamed for absolutely everything, I know in my case that if the flat I currently rent was up for sale for a reasonable (and affordable) price, I could afford to buy it. Instead, the guy who owns it also owns a number of other flats in the area, and so is presumably making a profit, whereas I am resigned to be stuck in this rental trap, unless things change. Can you see the inbalance? Maybe I'm looking at things too simplistically here, but what we be so wrong with there being a 'one property per household/family unit? There surely wouldn't be much of a housing shortage if that were the case! At the moment, its just a bit of a free-for-all (not literally - there ain't nothing free any more!) and the government won't want to do anything to rock the nice little earner boat they're currently on because it's not in their interests.

High house prices = more stamp duty (just think how much they're raking every day from this alone - has anyone ever questioned where this money goes?) not forgetting CGT on second homeowners and LLs selling up (kerching £££) plus the absolute killer that is Inheritance Tax (How very dare your parents die and leave you their 286,000 home to you?!)

So why would anything change if the government can possibly help it?? They're making a mint, simple as that.

Rant over!!

Hereward

scorpio_princess wrote:

But you surely can't deny that it IS a factor. Although BTL can't be blamed for absolutely everything, I know in my case that if the flat I currently rent was up for sale for a reasonable (and affordable) price, I could afford to buy it. Instead, the guy who owns it also owns a number of other flats in the area, and so is presumably making a profit, whereas I am resigned to be stuck in this rental trap, unless things change. Can you see the inbalance?

If large country houses went up for sale at a reasonable (affordable) price I buy one like a shot: the market, however, does not work that way. It is up to the seller to decide how much they want for the property and the the buyer then decideds if this price is reasonable for what is on offer. Just becasue you cannot afford a property at the current prices doesn't make them unreasonable (affordability is another question).

You have no right to own your own home, its just nice to do so. Many people would be much better of if they didn't own their home as ownership has a lot of hidden costs (buildings insurance, maintenance, etc).

BobProperty

Sisyphus wrote:

8% of the housing stock being BTL is not necessarily 'small'. It would be interesting to see historical figures. Any assets price can crash with only a small % of the available volume being transacted. (English?).
it is also probable that BTL is a much more dominant part of urban markets such as in London and has been the main driver of the growth.

I would agree but 8% is the whole BTL market, 100% of that is not going to crash. I doubt if the "Vested Interests" (VI) would even admit that say 4% would affect the market but that's saying that every other BTL will crash out at loss. I also don't think locals in places like Cornwall will put their house price inflation down to urban BTL growth.
I also think growth/stagnation is very regionalised. Parts of London, NI , Scotland may be going crazy but other parts of the UK are flat.

cupid_s

Surely it's not just a case that you're ok if you want to stay in your house a long time. That's only the case if the crash isn't coupled with interest rate increases. If interest rates were to increase then that would be a factor that would contribute to a crash in the first place and then staying in your house for a long time may not be an option for many owners as they couldn't afford the mortgage.

Though admittedly it would only be those who had stretched themselves a bit too far who would suffer in this instance.

BobProperty

scorpio_princess wrote:

But you surely can't deny that it IS a factor.

I'm not saying it isn't. I'm saying it isn't as significant as a lot of people make out.

scorpio_princess wrote:

.....Instead, the guy who owns it also owns a number of other flats in the area, and so is presumably making a profit, whereas I am resigned to be stuck in this rental trap, unless things change.

Your presumption. I think if he has bought them all in the last 2-3 years he will get burnt. It is also your presumption that you are "stuck in this rental trap". I expect to be renting soon because for various reasons I won't be able to get a mortgage to buy the sort of thing I want. One of the main reasons is the high price of property, but even if it halved in value overnight I still couldn't afford what I want round here and I still could rent for less than it would cost for a mortgage. (Don't ask me to explain but rent v mortgage repayment isn't the whole calculation)

scorpio_princess wrote:

Can you see the inbalance? Maybe I'm looking at things too simplistically here, but what we be so wrong with there being a 'one property per household/family unit? .....

I see no imbalance, I see an unusual and unsustainable situation in a market.
When was this "one property per household/family unit"? I can't remember it and I bet I'm older than you

Alan_M_2

BobProperty wrote:

I see no imbalance, I see an unusual and unsustainable situation in a market.
When was this "one property per household/family unit"? I can't remember it and I bet I'm older than you

Damn, smacks of communism a bit does that, next we'll be capped on the number of kids we'll be allowed:)