BTL Investors hit Bonanza

Rinoa

http://www.ft.com/cms/s/0/0ddacf3a-387a-11e1-9f07-00144feabdc0.html#axzz1iiW9plgD

The collapse of mortgage lending in the UK has created a bonanza for buy-to-let investors, the group widely blamed for bringing about the housing market crash by fuelling speculation.
Private sector landlords have increased their share of the country’s residential stock by 42 per cent since 2007 and now account for 19 per cent of the total value.
Cash-rich buy-to-let landlords are benefiting from the lack of bank lending to other potential homeowners and the lowest level of housing output since 1923, which has helped drive rental demand and increase yields.
This unintended consequence of tighter lending conditions – which has emboldened, rather than restrained, the speculative borrowers who helped trigger the market’s collapse – is likely to anger those unable to gain a foothold on the housing ladder, however.

“The expansion of the private rented sector is the single most important issue in the UK property market at the moment,” said Yolande Barnes, head of research at Savills, the property services group.

“But, if you look at the investment logic for people getting into it, it tells you a lot about how the market has changed in the past five years. Buy-to-let used to be a pure play on capital growth, but now you are basically buying rental income with a pretty good guarantee that it will grow,” Ms Barnes added.
The fundamental change in motivation of private landlords is reflected in the many different groups that contributed to the growth of the sector.
As well as existing buy-to-let investors using the relatively cheap cost of borrowing to expand their portfolios, there has been an influx of cash buyers. Equity rich buyers, often from overseas, are attracted to a market underpinned by limited mortgage availability and the undersupply of new stock.

However, one group, which has only really developed since the financial crisis, is becoming an increasingly important aspect of the overall private landlord sector.

“After the collapse of Lehman Brothers, you had people becoming accidental landlords as they were sitting on properties which they bought for capital growth and then couldn’t sell,” said Tim Hyatt, president of the Association of Residential Lettings Agents. He added such landlords had become more enthusiastic about holding property as the rental market strengthened.

Mr Hyatt forecasts there could be as many as 6.6m houses in the hands of private landlords by 2021, equivalent to 22 per cent of the all UK homes, up from just under 4m today.

Not sure this is what the bears had in mind.

HAMISH_MCTAVISH

Rinoa wrote: »

Not sure this is what the bears had in mind.

Absolutely NOT what the bears had in mind, although exactly what many of us have been warning about for several years now.

Ah well, law of unintended consequences and all that....:)

RUN_RABBIT_RUN

it will continue to be a problem until the number of houses being built increases to fulfil demand and the mortgage market loosens up significantly

otherwise btl investors here and overseas will continue to clean up

Graham_Devon

Rinoa wrote: »

http://www.ft.com/cms/s/0/0ddacf3a-387a-11e1-9f07-00144feabdc0.html#axzz1iiW9plgD

Not sure this is what the bears had in mind.

What? Unintended consequences?

VfM4meplse

Really? I've been looking to get rid of my BTL for years now, and estimate it will be at least 4 years until it reaches the price I bought it for plus expenses. I would rather not have it tbh.

IveSeenTheLight

VfM4meplse wrote: »

Really? I've been looking to get rid of my BTL for years now, and estimate it will be at least 4 years until it reaches the price I bought it for plus expenses. I would rather not have it tbh.

Hmmm, can't quite get my head round what your saying.

"You've been trying to sell for years"........... Doesn't seem like you have marketed it right

"it will be at least 4 years until it reaches the price I bought it for plus expenses"............. I'm presuming you mean that the price has crashed and it will take 4 years to recover your costs.

Which local market are you referring to? Is the property in Ireland?

mcc100

Rinoa wrote: »

http://www.ft.com/cms/s/0/0ddacf3a-387a-11e1-9f07-00144feabdc0.html#axzz1iiW9plgD

Not sure this is what the bears had in mind.

I assume you're a BTL'er with a vested interest ........

VfM4meplse

IveSeenTheLight wrote: »

"You've been trying to sell for years"........... Doesn't seem like you have marketed it right

It won't go on the market until the price recovers. But you've shown me the silver lining, if it was in the ROI I really would have a problem.

wotsthat

Graham_Devon wrote: »

What? Unintended consequences?

I can remember Chucky explaining this a couple of years ago.

Just because houses get cheaper doesn't mean more people will be able to afford them. It doesn't matter if the average house price drops to £80,000 if you can't get the finance.

So what we have is rich people snapping up cheaper properties and getting poorer people to pay for them.

I don't like it and I doubt anyone trying to buy a house to live in likes it either. Solution? Save like mad.

Only a few days ago the BoE predicted that mortgage if anything is going to contract and housing supply isn't increasing. More good news for BTL owners.

IveSeenTheLight

VfM4meplse wrote: »

It won't go on the market until the price recovers. But you've shown me the silver lining, if it was in the ROI I really would have a problem.

Mind explaining when you bought, where you bought and what deposit percentage you put down.

That way we can understand a little better.

Graham_Devon

IveSeenTheLight wrote: »

Mind explaining when you bought, where you bought and what deposit percentage you put down.

That way we can understand a little better.

A BTL'er going against the grain!?