how many REALLY think there'll be a crash rather than a stabilisation ?

CYBERCIDERSAVER

You are absolutely correct. BTL is probably the biggest reason house prices have been so relentless in their rise and why there will be no crash. there will always be people ready to buy the houses that are sold, even if the reposessions increase, it will make far less difference than it has in the past.

Let's look on the bright side... Those poor people who do lose their homes will probably be able to rent it back cos let's face it, they're not going to get a mortgage!!!!!

Which of course all means the rich getting richer and the rest of us look on with envy.:mad:

UK007BullDog

Turnbull2000 wrote: »

You make it sound so simple - fix your rate and there's nothing to worry about. Yet those who bought during the boom on two-year fixed rates are in for quite a shock when it comes to finding another deal. New deals on offer could potentially be two percentage points higher for a huge number of people. Repossession numbers are already climbing fast, so the first to dump their properties will not just be the newbie landlords.

Like I said its all a gamble but if people tighten their belts and fix longer or go for a capped rate without tie-ins then they can weather it out. A lot of people did in the last crash when interest rates went as high as 17%. They survived then and they will this time. Like I said dont gamble on the fact that rates might drop. Yes they might but concentrate on affordability and stability for a longer time.

I am personally on a super rate and when my deal finishes next year I am going to be stung as well. So I will deduct the money from somewhere else to pay for it (in theory if I were mortgaged up to the hilt, but I am not).

Gorgeous_George

CYBERCIDERSAVER wrote: »

You are absolutely correct. BTL is probably the biggest reason house prices have been so relentless in their rise and why there will be no crash.

I absolutely disagree. BTL will have had a marginal effect on house prices.

If the BTL LL had not bought the house, then his potential tenants would have had to.

Not having BTL would have removed the option of renting for all those people who choose to rent. This would have forced them into home-ownership with all the fees/taxes that incurs.

Not everybody who rents is a wannable home-owner.



GG

UK007BullDog

Romani_Ite_Domum wrote: »

An interesting comment. I take it as you are a mortgage advisor then this is anecdotal? I have heard from LLs on this site that they would buy up properties during a downturn and this in itself would help prop the market up. I have often wondered where the money would come from.

The bottom line is that you have LLs out there that are expecting a crash and getting the war chest together now as they will not be able to during the crash. This would be a lot of trouble to go to unless they were expecting a downturn soon.

Bulldog, is this what you are saying. If so is it many doing this or just a few. How do you know that they are no just remortgaging because they are paying off credit cards etc.

I can tell you that my LLs that have 20+ and more properties are doing exactly that. They are interest only mortgages, the rentals cover the mortgage if interest only or repayment. The equity some of the LL's are pulling out are tremendous as they bought those properties a quite a while ago. Some get up to £100K per property. That is a considerable war chest to play with. Some are buying now already others are starting to check out the areas they are looking to buy. It is not many doing that. These landlords do not worry too much about the house price values either. They are all very long term orientated. This was when I was broker, now I work at a lenders but clients still come to me as they have to spread their portfolio of properties.

mystic_trev

CYBERCIDERSAVER wrote: »

You are absolutely correct. BTL is probably the biggest reason house prices have been so relentless in their rise and why there will be no crash.

Many of the Newbie BTL'ers, who've paid large amounts of money to attend seminars and think they've got the Inside track to Property Investment, are going to find out they've been very stupid. Buying an newbuild apartment in Leeds at 10% 'discount' is not going to lead to riches. Too many apartments for too few tenants, the professsionals won't touch these at any price!

There are many areas the same will occur. There are just far too amny [strike]apartments[/strike] Flats being built!

m00m00

the 'professional' landlords with large portfolios of property are dwarfed in number by the cumulative number of amateur 'BTL' landlords who are the ones who have jumped onto the bandwagon in the past 2-3 years and these are the ones likely to be hit hardest in any 'crash'

Romani_Ite_Domum

UK007BullDog wrote: »

I can tell you that my LLs that have 20+ and more properties are doing exactly that. They are interest only mortgages, the rentals cover the mortgage if interest only or repayment. The equity some of the LL's are pulling out are tremendous as they bought those properties a quite a while ago. Some get up to £100K per property. That is a considerable war chest to play with. Some are buying now already others are starting to check out the areas they are looking to buy. It is not many doing that. These landlords do not worry too much about the house price values either. They are all very long term orientated. This was when I was broker, now I work at a lenders but clients still come to me as they have to spread their portfolio of properties.

I can understnd this rationale if they are in it for the long term as they could find that all their properties fall into NE in the short term ( 5-10 years?) The people who have actually made ( on paper at least) money from the house market, are looking to buy more when it tanks. It will be pretty hard to cover mortage payments though if interest rates go higher and the country falls into a recession.

However, I don't think that enough will be doing this to prop the market back up though. Most BTLers are more the amateur investors who have been sucked in recently. I don't see them being able to buy more property even if they wanted to.

wecanhelpu

UK007BullDog wrote: »

I can tell you that my LLs that have 20+ and more properties are doing exactly that. They are interest only mortgages, the rentals cover the mortgage if interest only or repayment. The equity some of the LL's are pulling out are tremendous as they bought those properties a quite a while ago. Some get up to £100K per property. That is a considerable war chest to play with. Some are buying now already others are starting to check out the areas they are looking to buy. It is not many doing that. These landlords do not worry too much about the house price values either. They are all very long term orientated. This was when I was broker, now I work at a lenders but clients still come to me as they have to spread their portfolio of properties.

What I have highlighted are the key facts. People who have been in this game for a long time will be in a position to capitalise on any downturn in the market. This has always been the case; I did the same myself during the last crash.

what will not happen is newbie landlords who think they are are wealthy but are really up to their eyes in debt, doing the same thing. Because they are often too highly geared to be able to get any further funds in a climate of tightening lending criteria.

If you are already subsidising your tenants rent to pay your mortgage, banks will not lend you any more money, regardless of how cheap the house is.

wecanhelpu

UK007BullDog wrote: »

I can tell you that my LLs that have 20+ and more properties are doing exactly that. They are interest only mortgages, the rentals cover the mortgage if interest only or repayment. The equity some of the LL's are pulling out are tremendous as they bought those properties a quite a while ago. Some get up to £100K per property. That is a considerable war chest to play with. Some are buying now already others are starting to check out the areas they are looking to buy. It is not many doing that. These landlords do not worry too much about the house price values either. They are all very long term orientated. This was when I was broker, now I work at a lenders but clients still come to me as they have to spread their portfolio of properties.

What I have highlighted are the key facts. People who have been in this game for a long time will be in a position to capitalise on any downturn in the market. This has always been the case; I did the same myself during the last crash.

what will not happen is newbie landlords who think they are are wealthy but are really up to their eyes in debt, doing the same thing. Because they are often too highly geared to be able to get any further funds in a climate of tightening lending criteria.

If you are already subsidising your tenants rent to pay your mortgage, banks will not lend you any more money, regardless of how cheap the house you want to buy is.

Romani_Ite_Domum

Gorgeous_George wrote: »

I absolutely disagree. BTL will have had a marginal effect on house prices.

If the BTL LL had not bought the house, then his potential tenants would have had to.

Not having BTL would have removed the option of renting for all those people who choose to rent. This would have forced them into home-ownership with all the fees/taxes that incurs.

Not everybody who rents is a wannable home-owner.



GG

GG, I am sure you feel in your heart that you are doing your tenant a favour buy owning a BTL and I am sure she is happy with you as a LL.... It's time to face facts:

Investent in property by BTL has had a massive effect on house prices