New Buy to Let Boom Fuelled By Higher Rents

geneer

chucknorris wrote: »

I was very specific in post 3 (which you answered but ignored my point, so don't pretend you haven't read it)

You seemed to be implying that everyone who bought near peak are on ultra low life time trackers.
To support this assertion you have provided on anecdotal, yourself, which lets face it may or may not be true.

I have to level with you Chuck, can't say this makes my original observation incorrect.

chucknorris

geneer wrote: »

You seemed to be implying that everyone who bought near peak are on ultra low life time trackers.
To support this assertion you have provided on anecdotal, yourself, which lets face it may or may not be true.

I have to level with you Chuck, can't say this makes my original observation incorrect.

NO! you were implying 'everyone' (note the word 'certainly' in post 2) I was identifying a secenario that demonstrated that it may not necessarily apply.

geneer

chucknorris wrote: »

NO! you were implying 'everyone' (note the word 'certainly' in post 2) I was identifying a secenario that demonstrated that it may not necessarily apply.

Sorry, what? You claiming I was implying that "everyone" bought 2 flats in 2007?

You're not making any sense Chuck.

Cleaver

Percy1983 wrote: »

In short the incentives should be removed form BTL

What incentives? Or at least what incentives are you refering to that are different from any other business?

Percy1983

Cleaver wrote: »

What incentives? Or at least what incentives are you refering to that are different from any other business?

The next to zero risk incentive.

Do nothing and 25 years later have a £100k+ asset.

Thrugelmir

julieq wrote: »

Squeeze landlords on rent and you get cost cutting in other directions anyway.

Most of which would do little to protect the LL's investment. So counter productive.

serious_saver

I'm a bit concerned about so many BTL properties being out there. Yes I can see the benefits for landlords but if inexperienced landlords buy based on the high cost of rent now what happens if rents start to fall and interest rates go up? They will either have to sell up or allow their properties to fall into disrepair. Rents may have gone up by they can't continue to do so. People can buy properties that are above their income because of mortgages but you can't get a mortgage to cover you rent. So unless salaries go up there must be a ceiling for rent.

marblesfound

The whole thing is a real mess!

I think BTL is a horrible way to make money - I don't blame those who take part but I do think the government has let the housing market get so out of control that the tail is now commandingly wagging the dog.

A one bed flat near me was recently sold and is now available to let at £1200pcm - one less property available for FTBs. If someone has access to a large deposit they can get a mortgage which would see them paying under £350 a month interest only - a nice little earner. This can't be right - it is exploitation and it is state funded. But as I said I don't blame the landlords as why should anyone want to keep cash in a bank when the BoE is doing it's utmost to destroy the value of that money through QE.

Base interest rates of 0.5% do not reflect the true cost of borrowing money - if it did then businesses would be able to get secured loans at close to those rates - it is specifically to help the housing market. The fact is that housing is unsustainable at current prices but due the knowledge that a house price crash would see the economy dive the government is doing everything it can to support it. We have huge immigration yet house building is still running at very low levels. The government having sold off social housing are now dependent on the amateur landlord to house council tennants. A crash would also very quickly lead to many banks becoming insolvent. Not to mention all of the MPs with second, third, fourth homes etc. You couldn't make it up.

The soverign debt crisis is only just getting started - eventually market forces will take over and it will be ugly. Does anyone really believe that base rates can stay at 0.5% with the country heading for a recession whilst still running a huge deficit on top of an already large debt figure? Deficit reduction plans have been blown out of the water by recent events and it is only a matter of time before the markets begin to target the UK. We are clearly heading the way of Greece.

We have 0.5% base interest rates and massive QE Yet inflation is only 5%! This suggests that there are very strong deflationary forces at work. Under a deflationary scenario you do not want to hold assets. Inflation or deflation? We are caught between a rock and a hard place.

chucknorris

geneer wrote: »

Sorry, what? You claiming I was implying that "everyone" bought 2 flats in 2007?

You're not making any sense Chuck.

Ahh I was wondering when you would revert to your usual trick when you realise when you are losing the argument, you play the fool and deliberately misinterpret the point (although I must admit you should win an oscar for your pretence of stupidity).


Or perhaps I am being too generous and you really are a fool. However it does signify that I have won the arguement (you however I suspect will go on for quite a few posts yet, pretending not to understand, just don't expect me to waste my time too like you). I haven’t got the patience of ISTL who you do this to quite often.

Cleaver

Percy1983 wrote: »

The next to zero risk incentive.

Do nothing and 25 years later have a £100k+ asset.

You want to remove the incentive of a stable or increasing capital / asset price? Firstly, why? And secondly, how would you do this?

Also, if you all of your money in to a BTL isn't next to 'zero risk', it's quite a high risk investment. Let's say you have £50k to invest and rather than investing via a portfolio route in a variety of assets you opt to throw it all at a £150k or £200k property as a deposit then it's quite high risk. Firstly, you're putting all your eggs in one basket - property needs to rise, or you need a very good yield in order to make money. All of your money is in one investment, which is one house in one area. What if something happens to that one area? Secondly, you're risking all your money on one venture, so there's a risk that what you could have invested in (shares, a business, metals, commodities etc.) might have performed better over the same timeframe.

But anyway, I'm more interesting about why and how you'd take the incentive of asset growth away from property investment.