BTL versus home buyers

ruggedtoast

julieq wrote: »

Stopping mortgage lending to BTL investors won't stop the growth in residential letting as an investment, it'll just move into professionally managed unit trusts.

The bears will eventually figure this out.

Renting from a professionally managed unit trust sounds far preferable to me, than renting from a btl landlord.

ash28

Pobby wrote: »

Hamish. Do you think it is a good thing for people to be renters? Being of an age when a single person could buy a home close to London, I now find the situation is becoming really difficult for my family youngsters.

Regardless of good incomes, they still cannot get a place of their own. Going back about 14 years ago, a decent 3 bed terrace in Reading was about 45ki or just a bit more. Now hitting the market at a staggering £175k. Kids are priced out and they are the ones to get the housing market moving.

According to the Land Regisry the average price of a terraced property in the Reading council area in 1998 was £75k - not £45k.

We lived in the Reading area from 1986 to the end of 2011 and bought and sold a number of houses during that time - there is no way (unless you were able to get the odd auction property) could you buy a 3 bed terrace for £45k. You would probably need to go back 25 years or more to be able to do that.

Even council properties in Whitley Wood bought on the Right to Buy were more expensive than that - my friend bought her council house there in the mid 1990s and paid over £50k after her discount.

I think you must be looking back through rose coloured glasses.

It's always been expensive (at least while we were there) even during the crash of the 90s they were still relatively expensive - just not as expensive.

BritRael

julieq wrote: »

If you don't lend, you can't generate returns for
savers. ..

True

julieq wrote: »

..Far from helping, the so-called "responsible lending" is hurting savers and prospective first time buyers.....

It is not designed to 'help' savers. It is designed to limit the amount of money that banks lend to people who cannot afford to repay the loan. To that end, it is successful. However, the result of this tactic is bad for savers...

julieq wrote: »

...There is simply no evidence that lending in the UK wasn't responsible in the first place..

Do you think that the huge amount of 100+% mortgages of a few years ago could be described as responsible lending??
In my humble opinion, if somebody has no money for a deposit, and has no history of saving then they should not be able to get a mortgage.
I, and almost everybody that I know, was brought up in rented accommodation. This was because my parents (and their parents before them) could not afford to buy a home. There is no shame in renting...

BritRael

ruggedtoast wrote: »

Renting from a professionally managed unit trust sounds far preferable to me, than renting from a btl landlord.

So if you found a property for rent which you loved, you would not take it if it was owned by a BTL!r???

the_flying_pig

julieq wrote: »

If you don't lend, you can't generate returns for savers. Far from helping, the so-called "responsible lending" is hurting savers and prospective first time buyers. There is simply no evidence that lending in the UK wasn't responsible in the first place.

Ultimately building more houses and allowing the finance to allow owner occupiers in is the only way of relieving the pressure. Stopping mortgage lending to BTL investors won't stop the growth in residential letting as an investment, it'll just move into professionally managed unit trusts.

The bears will eventually figure this out.

I didn't understand any of that.

macaque_2

julieq wrote: »

If you don't lend, you can't generate returns for savers. Far from helping, the so-called "responsible lending" is hurting savers and prospective first time buyers. There is simply no evidence that lending in the UK wasn't responsible in the first place.

Ultimately building more houses and allowing the finance to allow owner occupiers in is the only way of relieving the pressure. Stopping mortgage lending to BTL investors won't stop the growth in residential letting as an investment, it'll just move into professionally managed unit trusts.

The bears will eventually figure this out.

For goodness sake Julie!

Responsible lending criteria are essential if we going to repair the damage caused by the property bubble.

A growing number of people are now trapped in negative equity. Creating more victims helps no one.

Savers are getting rogered irrespective of interest rates. Lenders are currently charging between 5% and 20% on loans and paying 0 - 0.5% interest to savers (which they more than claw back through account charges).

More houses are clearly needed but the problem is not finance but planning restrictions.

Whilst new houses contribute to the greater good, loans on existing property is dead money. The common good would be served by greater investment in industry and 'useful' services.

shortchanged_2

[QUOTE=HAMISH_MCTAVISH;52324373
If you want sustainably lower house prices and rents over the long term, then build a few million more houses.

[/QUOTE]

Well if builders priced their new properties at sensible market prices then you might find they'd shift them, instead of using all this shared equity cr&p to keep prices up.

What is the problem with that Hamish? You might find they will sell more and in turn in they can build more which is what you want isn't it?

tartanterra

ruggedtoast wrote: »

Renting from a professionally managed unit trust sounds far preferable to me, than renting from a btl landlord.

Clearly.

Because, of course, on one hand you have an investor attempting to get maximum profit from their investment, and on the other hand, you have an investor....er.....attempting to get maximum profit from their investment......:think:

Emy1501

julieq wrote: »

If you don't lend, you can't generate returns for savers. Far from helping, the so-called "responsible lending" is hurting savers and prospective first time buyers. There is simply no evidence that lending in the UK wasn't responsible in the first place.

Ultimately building more houses and allowing the finance to allow owner occupiers in is the only way of relieving the pressure. Stopping mortgage lending to BTL investors won't stop the growth in residential letting as an investment, it'll just move into professionally managed unit trusts.

The bears will eventually figure this out.

So the MMR which is broadly supported by the CML, Shelter etc is wrong with regards to sensible lending being needed? Where your evidence to support lending was sensible pre crash?

House prices are 20-30% cheaper now in real terms and even the normally bullish CEBR are only talking about prices going back to 2007 levels in 2016.

Yours and other view of a return to the type of lending we saw in 2007 is an isolated one now.

92203

HAMISH_MCTAVISH wrote: »

You on the other hand seem to think that HPI is a moral issue rather than an economic one, and somehow avoidable if only we could all agree it's bad and sit round the campfire singing songs together or such like.

This is a very interesting point. I don't think that HPI could be considered a moral issue, it is what's driven HPI that should be of concern.

The supply side of the housing market definitely hasn't kept up with demand. Why has uncontrolled immigration been allowed, without relaxing the planning system to keep the cost of land, and ultimately the cost of housing more affordable?