Britain's deflating buy-to-let bubble

PROFESSIONAL_LANDLORD

Doc_N wrote: »

The reason all the BTL investors have melted away is simple - BTL just doesn't make any economic sense any more. Rents aren't covering interest payments, and the asset is actually falling in value. Why would anybody want to BTL in that situation?

The other reason they've melted away is that a lot of them are actually selling to cover the losses they're making on the rents.

And although falling prices will indeed mean lower prices for landlords, tighter lending criteria mean that there are going to be very few who can raise the money to buy. Most of them are going to be selling to avoid bankruptcy.[/quote]


Looks like there will be a severe shortage of rented property in the country, and we all know what happens to the price of a loaf in a famine don't we.

Not everybody will be in a position to buy given the tighter lending criteria.

WTF?_2

PROFESSIONAL_LANDLORD wrote: »

Looks like there will be a severe shortage of rented property in the country, and we all know what happens to the price of a loaf in a famine don't we.

Not everybody will be in a position to buy given the tighter lending criteria.

I agree - the turmoil will shake out a lot of amateur BTLers who bought based on capital appreciation in their house value. That's got to impact on availability of rental accommodation.

Smarter landlords who have done their sums and don't find themselves having to sell their properties should be able to clean up.

House prices are headed down, rents are headed up. Sooner or later (probably later) it will make more financial sense to buy rather than rent, then the cycle can start all over again.....

Doc_N

PROFESSIONAL_LANDLORD wrote: »

Looks like there will be a severe shortage of rented property in the country, and we all know what happens to the price of a loaf in a famine don't we.

Not everybody will be in a position to buy given the tighter lending criteria.

Not necessarily at all. Dramatically lower prices (as happened in the last crash) will mean that those with lower incomes will be able to get back into house ownership again. They won't need to rent any longer, so there won't be any shortage of rented property at all.

Rents have only been held up by the number of people who have to rent because they can't afford to buy. So as house prices fall, so will rents.

The BTL landlords are going to be squealing like stuck pigs once this snowball gets really rolling - and it's started already.

nicola1982_2

I've had an amateur BTL landlord, a retired landlord letting out his old home now living abroad and currently a very wealthy investor who's portfolio includes a number of properties he lets out alongside various other investments. He is definitely the best landlord I've had and we never have any problem getting things done. The worst was the amateur BTL landlord who took 3 months to replace a washing machine (which she eventually bought 2nd hand for £50). We left her after 6 months. She should've had the easiest job as it was her only property and she lived close buy, but she clearly wasn't putting money aside for repairs etc and as a result lost her tennants very quickly. I think that this will happen to many of the amateur BTL landlords who are so overstretched with mortgage repayments, they have nothing to cover repairs etc.

tr3mor

PasturesNew wrote: »

But a house bought cash at £150k is £50k still in the bank compared with paying £200k cash.

How many people with £200k in the bank would think "I know, I'll go buy a BTL and get 3% return"?

Doc_N

tr3mor wrote: »

How many people with £200k in the bank would think "I know, I'll go buy a BTL and get 3% return"?

Particularly when the BTL is going down in value as well.

tr3mor

Doc_N wrote: »

Particularly when the BTL is going down in value as well.

I thought it only ever went up!

PM

is the program online?

I just caught the end of it and would love to watch it all.

guppy

PM wrote: »

is the program online?

I just caught the end of it and would love to watch it all.

You're in luck

Its at the top right of the page...

http://news.bbc.co.uk/1/hi/programmes/panorama/7034019.stm

And highly disturbing it was too. Anyone want to buy a flat in Thamesmead?

gizmo111

And of course the woman in there didn't know she wasn't the owner of a catering company, but only a cook.

This highlights that reposseions and personal bankruptcies are going to rise, so more people will be looking to rent, and sadly some of them will be at the mercy of rogue landlords, who will buy cheap and rent to the most vulnerable of society.