New Buy to Let Boom Fuelled By Higher Rents

Pimperne1

http://www.guardian.co.uk/money/2011/oct/22/new-buy-to-let-boom

Demand for buy-to-let mortgages has increased significantly in recent months as landlords rush to cash in on the continuing boom in rental prices, according to the Bank of England. The scramble to purchase rental properties is even leading would-be buyers to put in sealed bids in some areas of the south-east.

geneer

Certainly a better time to buy a couple of BTL flats than in 2007.
But then "profits" don't count as real money. Apparently.

chucknorris

geneer wrote: »

Certainly a better time to buy a couple of BTL flats than in 2007.
But then "profits" don't count as real money. Apparently.

Oops! Someone seems to have forgotten how low mortgage trackers were in 2007 unless of course increased rental profits doesn't count as real money of course.

Percy1983

I will say it again...

You can't stop greed.

ukcarper

Percy1983 wrote: »

I will say it again...

You can't stop greed.

Seeing as these properties aren’t selling to FTB isn’t its better they are sold and rented out to someone who wants them.

Percy1983

ukcarper wrote: »

Seeing as these properties aren’t selling to FTB isn’t its better they are sold and rented out to someone who wants them.

Nope, its better that they dropped a little further so said FTB's can buy them instead of buying them for a parasite.

Running_Horse

The sad thing is as prices drop the only people to benefit will be BTL landlords.

julieq

Oh for heaven's sake, it's nothing about greed. Its hardly free easy money as has been pointed out many times, it's a stable return on investment at a respectable rate with a built in hedge against inflation. In most cases it's part of a pensions strategy, and there is no real difference between running a small business to build a retirement fund or investing in stocks and shares for a return.

What Percy and his ilk don't like is just that someone is buying houses when they can't (or won't, in Geneer's case), so what they want to happen isn't happening. That is precisely NOTHING to to with BTL investment on a small scale, it is to do with having fewer houses than are needed. All these long hoped for cavalry horses on the horizon - sovereign debt crises, option arm timebombs, 10% interest rates, destruction of the BTL paradigm - are failing to be anything other than plodding old nags in the face of this problem. Honestly if prices haven't budged down much with massive uncertainty about the Eurozone and public sector job losses, then they're only going to go one way when the gloom clears, probably early next year. Particularly as deposits are going to have been saved up now.

I remember trying to explain the idea that rental yields were able to sustain prices to Geneer a while ago, and he got stuck in a loop around the idea that if more people were renting, prices must drop because they weren't buying. Surely at some point the penny is going to drop even with the densest of financial numpties?

I also pointed out at the depths of the correction in 2009 that it was a great time to do a BTL on the basis of continued falls then and a slow rise back to 2009 prices by 2016 with the backdrop of low interest rates. To general derision from the bears. Well more fool them.

JonnyBravo

julieq wrote: »

Oh for heaven's sake, it's nothing about greed. Its hardly free easy money as has been pointed out many times, it's a stable return on investment at a respectable rate with a built in hedge against inflation. In most cases it's part of a pensions strategy, and there is no real difference between running a small business to build a retirement fund or investing in stocks and shares for a return.

It might not be free easy money but nor is it an onerous and demanding business.

julieq wrote: »

What Percy and his ilk don't like is just that someone is buying houses when they can't (or won't, in Geneer's case), so what they want to happen isn't happening.

Spot on. Ah well. Nothing I can do about that..... much as I'd love to help them

ukcarper

Percy1983 wrote: »

Nope, its better that they dropped a little further so said FTB's can buy them instead of buying them for a parasite.

But it’s not price alone that stops FTB buying otherwise why were more house being sold in 2006/7. If someone can’t find a deposit of £16k for an average property they won’t find £14k that much easier.

HAMISH_MCTAVISH

geneer wrote: »

Certainly a better time to buy a couple of BTL flats than in 2007.

Well that entirely depends on the area and the mortgage obtained in 2007.