UK subprime

macaque_2

julieq wrote: »

Graham. 1,423 clients is a drop in the ocean.

Anyway here we have the usual Macaque nonsense. Firstly this isn't anything to do with "subprime" lending. It's about someone managing a portfolio of rental properties, and looks like they're managing it badly. So what? The fact that someone manages a business badly doesn't mean a business sector is problematic, it just means that someone is managing a business badly.

You really are all going to be sorely disappointed when interest rates rise and prices rise with them - historically this has been what happens. You will figure it out eventually, but please don't put your life on hold waiting for interest rate induced falls which aren't going to happen.

Julie



Grandiose, 'big picture' sound bites as a substitute for common sense seems be your hall mark.

• The reference to 1423 people looking for an exit over 4 years (in Grahams note) were clients of just one company.
• If a borrower with a £3m portofolio has negative equity and a yield of 3%, then what in heaven's name qualifies as sub prime lending in your world.
• One of the responders in the thread said that this is a "very common problem". If correct, that most definitely points to a 'sector problem'.
• Your reference to price rises in response to an increase in interest rates reflects a rooky error in your analysis. Previous rises in interest rates have been imposed to control wage inflation.

Thrugelmir

RenovationMan wrote: »

Not sure you can generalise over the entire country whether the yields are sufficient to make BTL pay. Certainly someone looking into BTL as a way of providing an income in retirement, they have to make sure of their sums, which is pretty much the same for any investment really.

BTL is not an investment. Its a business. Precisely why many will now fail. They've certainly no idea as to how the capital will repaid. Without which they'll be no income in retirement.

RenovationMan

Thrugelmir wrote: »

BTL is not an investment. Its a business. Precisely why many will now fail. They've certainly no idea as to how the capital will repaid. Without which they'll be no income in retirement.

Businesses are investments, what do you think shares are?

In the case of BTL, the shares are held by fewer individuals and the investment return is a mortgage free property and a retirement income.

As far as your other point is concerned, in this respect BTL is the simplest game in the world - the capital is repaid by the rental income. If the rental income is insufficient then the BTL landlord will have to invest more money into the business via mortgage overpayments. It's not rocket science.

Graham_Devon

RenovationMan wrote: »

Businesses are investments, what do you think shares are?

In the case of BTL, the shares are held by fewer individuals and the investment return is a mortgage free property and a retirement income.

As far as your other point is concerned, in this respect BTL is the simplest game in the world - the capital is repaid by the rental income. If the rental income is insufficient then the BTL landlord will have to invest more money into the business via mortgage overpayments. It's not rocket science.

How is it the simplist game? You can just buy shares and do nothing after until you cash them in. How can it get any easier than that?

A property needs continuous attention.

RenovationMan

Graham_Devon wrote: »

How is it the simplist game? You can just buy shares and do nothing after until you cash them in. How can it get any easier than that?

A property needs continuous attention.

How well have you done with your own share dealing GD?

Graham_Devon

RenovationMan wrote: »

How well have you done with your own share dealing GD?

What's that got to do with my question?

Are you suggesting property investment is always better than investing in shares?

You stated property was the easiest investing game. I'm asking how you came to that conclusion?

RenovationMan

Graham_Devon wrote: »

What's that got to do with my question?

Answer my question and it'll answer yours. How well have you done with your share dealing?

Graham_Devon wrote: »

You stated property was the easiest investing game. I'm asking how you came to that conclusion?

Did I? I think you need to re-read my post.

antrobus

RenovationMan wrote: »

Businesses are investments, what do you think shares are?

To put it simply, you can buy shares in Tesco without worrying about the logistics of ensuring that there are sufficient baked beans on the shelves of 2,000 plus stores. On the other hand if you decide to 'invest' in BTL you do have to worry about checking tenant's references, gas safety certificates, late payment of rent etc etc. Of course, you can always do what a lot of people do, and pay somebody else to do it.

Nevertheless businesses need to be managed, investments don't. Or as some people put it "Buy them, forget about them, and hold them forever".

Graham_Devon

Oh I'm bored of you already Reno. Can't be bothered with jumping through hoops just to discuss what you stated.

Loopgames

RenovationMan wrote: »

Businesses are investments, what do you think shares are?

In the case of BTL, the shares are held by fewer individuals and the investment return is a mortgage free property and a retirement income.

Owning shares is not the same as owning a business...theoretically it is a share of a company but public shares are more fluid than that whilst privately owned companies have their owners invest their time and money in the business.

I don't think it is correct to compare shares with a directly owned business which you have complete influence over (to one you haven't).

BTL are investments (I agree there) and can be considered as a 'business' but there is no guarantee of retirement income at the end..it all depends how it has been managed through that time (if the owner treats it like a business).