is it still worth buying a second home to let?

glasgowdan

Exactly...btl buyers won't pay more than ftb by and large.

wolfplayer

Ok Seven-Day. My view remains you have outbid a would-be owner. You can't claim for certain you did not.

I would be interested to get a general idea of situation of your current tenants, but would understand if you'd prefer not to share that. Younger workers?

If property-investors were not in the market, then that seller would have had to transact with whoever remains; likely FTBs/younger people, and at a lower price, in my opinion.

I'm in love with Section 24 and SDLT surcharge. Dream homes? Perhaps S24 and SDLT surcharge can bring bog-standard homes back to levels of affordability for younger people.

I also believe a lot of older owners and property investors lie to themselves about property being 'cheap' in their areas. Cheap perhaps in comparison to their overall property-wealth and pension and savings accumulated and inflated during boom growth decades.

They rarely place themselves in the situation of younger would-be buyers, and their incomes, nor the fact they can't MEW deposits as many investors do, but have to save out of their own incomes.

And they have lots of glib reasoning that most young people prefer to rent. Have to ask was that true of themselves when they were young? Did they buy when prices were more affordable, or 'prefer to rent' ?? Probably it comes back that they bought for them had 'more sense'. Young people would buy if prices were lower and fewer investors in market imo. S24 and SDLT hike on BTL and second home buyers part of that rebalancing.

booksurr

wolfplayer wrote: »

If property-investors were not in the market, then that seller would have had to transact with whoever remains; likely FTBs/younger people, and at a lower price, in my opinion.

ok so you have zero business acumen. Investors do not pay premiums. They buy on the basis of financial returns. Home owners, just like anyone buying something for themselves, not for resale, are not concerned with margins, so can pay more than someone who needs a profit measured in terms of rental yield for which the top limit is easily quantifiable. Granted however that investor access to funding is on a different plane. I assume you are aware that the minimum deposit for a BTL mortgage is 25%. What do you think is the average deposit offered by a FTB? Hint: it is not 25%

wolfplayer wrote: »

They rarely place themselves in the situation of younger would-be buyers, and their incomes, nor the fact they can't MEW deposits as many investors do, but have to save out of their own incomes.

really, so who is the "bank of mum and dad" and why do you think such "older people" are unaware of what their money is buying for their kids

seven-day-weekend

wolfplayer wrote: »

Ok Seven-Day. My view remains you have outbid a would-be owner. You can't claim for certain you did not.

I would be interested to get a general idea of situation of your current tenants, but would understand if you'd prefer not to share that. Younger workers?

If property-investors were not in the market, then that seller would have had to transact with whoever remains; likely FTBs/younger people, and at a lower price, in my opinion.

I'm in love with Section 24 and SDLT surcharge. Dream homes? Perhaps S24 and SDLT surcharge can bring bog-standard homes back to levels of affordability for younger people.

I also believe a lot of older owners and property investors lie to themselves about property being 'cheap' in their areas. Cheap perhaps in comparison to their overall property-wealth and pension and savings accumulated and inflated during boom growth decades.

They rarely place themselves in the situation of younger would-be buyers, and their incomes, nor the fact they can't MEW deposits as many investors do, but have to save out of their own incomes.

And they have lots of glib reasoning that most young people prefer to rent. Have to ask was that true of themselves when they were young? Did they buy when prices were more affordable, or 'prefer to rent' ?? Probably it comes back that they bought for them had 'more sense'. Young people would buy if prices were lower and fewer investors in market imo. S24 and SDLT hike on BTL and second home buyers part of that rebalancing.

My tenant is rather 'interesting' . I don't want to say more except that he would not be able to buy at the moment.

(However if you are that interested, you'll find out a bit more by trawling through my posts on another thread ).

_CC_

Hoploz wrote: »

Personally I prefer to put my money into properties - i have no 'pension.' I know if worst comes to worst, chances of coming out with minimum what I've put in are 100% with property - who knows where a pension fund may end up with all the misinformation and mismanagement over the past 20 years. And most likely with my properties I will have a big capital increase over the long period on top. And long term when the mortgages are paid off I can choose either to cash in and sell, or keep renting out for a monthly income.

This is more down to your misunderstanding of pensions rather than sound financial planning.

djdaface

Not sure why people are so in love with the SDLT from what I can see its just priced out "would be landlords" who do not monopolise rent and provide much needed rental homes for students and savers to be FTB. Then replaces them for major investors who hike rental prices, milk profits with bad living conditions and often leave properties empty.

Seems a far worse situation than before imo, needs to apply to all second homes or not at all

Bluebirdman_of_Alcathays

djdaface wrote: »

Not sure why people are so in love with the SDLT from what I can see its just priced out "would be landlords" who do not monopolise rent and provide much needed rental homes for students and savers to be FTB. Then replaces them for major investors who hike rental prices, milk profits with bad living conditions and often leave properties empty.

Seems a far worse situation than before imo, needs to apply to all second homes or not at all

It does apply to all second homes.

BarryBlue

booksurr wrote: »

ok so you have zero business acumen. Investors do not pay premiums. They buy on the basis of financial returns. Home owners, just like anyone buying something for themselves, not for resale, are not concerned with margins, so can pay more than someone who needs a profit measured in terms of rental yield for which the top limit is easily quantifiable. Granted however that investor access to funding is on a different plane. I assume you are aware that the minimum deposit for a BTL mortgage is 25%. What do you think is the average deposit offered by a FTB? Hint: it is not 25%

Of course investors don't pay premiums, you are correct. I have BTL properties and the difference between buying one and buying your own home is that there is no emotional attachment to a BTL property. It is purely an investment, so the purchase price, and everything else, has to make sound financial sense. The primary issue is getting it at the right price, and if it isn't happening you just move on and find another.

My last purchase was a ground floor apartment in a nice secluded location. The agent told me the circumstances of the seller and how she needed to sell quickly and use the equity to upsize for her forthcoming new baby. I went in with a very low offer, we did a little negotiating, and agreed a price, £97k. No mortgage involved so we were able to go aead reasonably quickly. Everyone happy. The going rate in the development is nearer £120k, which is the asking price for one that has just come up for sale. If and when they get desperate I will bid for it. I get it or I don't, life moves on.

Bear in mind, re your last point, that not all BTL investors require mortgages. For many of us it is simply getting a better return that our savings get in a bank, 7-8% as opposed to 1-2%.

mumps

Hoploz wrote: »

Landlords are in business for profit. They don't want to pay a premium. The numbers are what count. Conversely, people looking for their dream home (whatever form that dream may take) are likely to fall in love and be willing to pay more.

I was thinking that, BTL landlords aren't being very businesslike if they pay over the odds.

Pixie5740

mumps wrote: »

I was thinking that, BTL landlords aren't being very businesslike if they pay over the odds.

Not every BTL is businesslike some are just eejits jumping on a bandwagon.