Buy-to-let poses potential threat to financial stability, says Bank of England Govern

purch

Chance and risk are two totally different things.

The Chances of a large number of BTL Loans becoming non-performing are extremely low.

The risks presented to Banks by having 15-20% of their entire mortgage book tied up in these loans (and maybe higher if there are a lot of non declared renters) are high and as prudent businesses they need to mitigate the risk.

mwpt

For the landlords around, is the easy money in BTL gone? Low interest rates are probably largely priced in now, not sure we're going to see such high capital growth again. SE yields look terrible, and sensitive to rates. Or is the party still going? Genuine question.

chucknorris

mwpt wrote: »

For the landlords around, is the easy money in BTL gone? Low interest rates are probably largely priced in now, not sure we're going to see such high capital growth again. SE yields look terrible, and sensitive to rates. Or is the party still going? Genuine question.

As a long term investment I still think property represents good value, but as I'm 57 now, and I don't particularly want to be a landlord in my late 60's, there is no longer any long term for me. But if I was younger I would invest, but only if we had less property than we already own, we have 8 investment properties, that is enough.

As for the capital growth, I too think that property might be near very near (or at) its real time high. But due to leveraging, the capital growth is still very good, even when if only matches inflation (i.e. with a 75% mortgage and 2% growth, that is almost 8% growth on the money actually invested, it will be less than 8% because of stamp duty, fees, etc.).