Buy to let replacing first time buyers

HAMISH_MCTAVISH

LydiaJ wrote: »

Some of us feel that "rationing" is an inaccurate and unhelpful term to describe this restriction.

Rationing is defined as:

"The controlled distribution of scarce resources, goods, or services."

Mortgage Rationing is therefore a completely accurate term.

In this case, banks are controlling distribution of mortgages through increasing deposit requirements, margins and credit scores until the pool of borrowers has shrunk to match the pool of available credit.

Pimperne1

HAMISH_MCTAVISH wrote: »

Far more often than Capital Economics or Moneyweek.

Or Geneer.

B_Blank

julieq wrote: »

Geneer, you utter plank, this is what I said would happen and the article suggests it's happening (but I'll wait for metrics before declaring myself vindicated).

Investors are sustaining the market as a function of yield. As rents rise and yield rises, prices will rise, with a floor set by acceptable ROI levels. As savings rates are low, and rental income is relatively low risk, BTL is a very attractive investment (as it was in Jan 2009 when I pointed this out to widespread derision). There is also a very real prospect of capital growth in the shortish medium term.

When mortgage availability increases and prospective buyers have saved up deposits there will be more upwards pressure still. I think I used the term "coiled spring" previously.

Now it may be difficult for you to get this into your 3" thick skull, but if you create more households than you create homes then you are going to see the cost of accomodation increasing. If you prevent a section of the population buying, then someone will provide rental accomodation. That is a simple statement of fact.

You wrote "investors" are buying up the property, I think you meant "idiot investors".

Big time investors (not tony from the pub with a "house price always goes up" mentality) are not plunging money into housing because they can see the yield isnt great now, and when rates rise the yield is going to be truely awful (if present at all). This is all while nobody in their right mind thinks house prices will rise in the next 5 years and most people think inflation will be high.

Buy to let investors are really shooting themselves in the foot this time. Most of them are making purcahses on projections based on rising house prices, lowish inflation and 0.5% interest rates. Laughable. Its going to be funny to see another load of these idiots go broke again (just like in 2008). The idiots never learn.

But please Julie, can we stop calling these BUy-to-Let idiots "Investors", it is an insult to true investors.

Turnbull2000

B_Blank wrote: »

Buy to let investors are really shooting themselves in the foot this time. Most of them are making purcahses on projections based on rising house prices, lowish inflation and 0.5% interest rates. Laughable. Its going to be funny to see another load of these idiots go broke again (just like in 2008). The idiots never learn.

But please Julie, can we stop calling these BUy-to-Let idiots "Investors", it is an insult to true investors.

Really?

Put down a 30% deposit, and you can get BTL mortgage rates below RPI inflation. Furthermore, ultra low rates will stick around for a long time yet in an effort to protect the property market and over-borrowed households, and rents will likely rise as house building has collapsed, immigration continues unabated and many youngsters are edged out of ownership. And that's just the short-to-mid-term. Longer term, the money taps will open once again with 100% mortgages storming back, stretching values right up to the limit.

HAMISH_MCTAVISH

B_Blank wrote: »

Big time investors (not tony from the pub with a "house price always goes up" mentality) are not plunging money into housing because they can see the yield isnt great now, .

Doesn't get much more "big time" than Aviva.,

Lacey is advising Aviva Plc, Britain’s largest insurer, on a 1 billion-pound ($1.63 billion) fund focused on the private rental market.

Aviva’s investment arm in talks with “a number of parties” about developing the residential investment vehicle and has been “very encouraged” at the level of investor interest, spokeswoman Laura Cocker said by e-mail.

http://www.businessweek.com/news/2011-04-20/tax-cut-on-multiple-home-purchases-may-spark-investment-in-u-k-.html

DervProf

HAMISH_MCTAVISH wrote: »

Doesn't get much more "big time" than Aviva.,

http://www.businessweek.com/news/2011-04-20/tax-cut-on-multiple-home-purchases-may-spark-investment-in-u-k-.html

That sounds very interesting, Hamish.

"Tax changes planned by the U.K. government may encourage investment funds to become residential landlords, promoting development and alleviating a housing shortage, CB Richard Ellis Group Inc. said"

Can't be a bad thing, if true.

B_Blank

HAMISH_MCTAVISH wrote: »

Doesn't get much more "big time" than Aviva.,

http://www.businessweek.com/news/2011-04-20/tax-cut-on-multiple-home-purchases-may-spark-investment-in-u-k-.html

In talks? They have been advised?? Surely you can do better than that Hamish.

I am in talks to become president of the world next year. Still doesnt mean its going to happen.

BAM....This is getting too easy!! The bulls are on the run, making lame arguements and I keep owning them all!!!

Graham_Devon

IveSeenTheLight wrote: »

No wonder FTBers are being pushed further back the ratioining queue

Well, at least your persistently wrong, I guess

Graham_Devon

HAMISH_MCTAVISH wrote: »

Rationing is defined as:

"The controlled distribution of scarce resources, goods, or services."

Mortgage Rationing is therefore a completely accurate term.

In this case, banks are controlling distribution of mortgages through increasing deposit requirements, margins and credit scores until the pool of borrowers has shrunk to match the pool of available credit.

Yer, and mobile phone contracts are rationed.

Car loans are rationed.

Credit cards are rationed.

Next credit accounts are rationed. Along with Littlewoods etc.

Infact, going by your theory, mortgages have ALWAYS been rationed, and ALWAYS will be. As has all credit. Unless of course, people can just take whatever money they like, how they like, when they like, regardless of any circumstances.

If you are going to describe mortgage rationing in the way you are, unless you get the above, mortgages will always be "rationed".

I do have to say, it's a pathetic term to describe eligibility requirements.

chewmylegoff

jesus semantics christ, calm down.