'BTL Landlords go long'

IveSeenTheLight

kristianwilliams wrote: »

More and more houses/flats are coming on the market to rent...but are staying empty. Cost of renting is dropping, our LL, is great and is trying his best to keep us on his books, by looking out for houses for us that he owns that he can offer the same rent for.

Maybe the minority here, but rent is NOT rising around here. A few houses that were "to rent" are now "for sale".

I can agree, each area will likely be different.
You say your area is dropping.
I have two properties, raised on by 14% two months ago when a tenant moved out and it was filled immediately.
Same happened last year when I raised another by 22%.

Maybe I was severly undercharging my tenants, but I market at a rate that is just below the average rate to ensure tenants want to view my properties and then I keep the rent static as long as they are in to ensure a longer rental period.

Works for me, but prices in my area have definately increased in the last year

IveSeenTheLight

MissMoneypenny wrote: »

A lot of less desirable areas go up at the few years of a property boom, as people are scared they are going to miss out getting onto the property rope. During a bust, these areas tend to have the biggest falls,as people can chose to buy in better areas or better house.

Although it is anticipated there will be a 20%, 30%, 40% average drop, depending who you read, some ares will be less than the average drop and some will have greater than the average drop.

I'm not sure what your post is saying other than an average means there will be some higher and some lower than that average. (Basic maths)

In relation to your reply to my post I don't see the relation.

Unless of course you are implying that I bought the properties in les desirable areas of which I can assure you I did not. Both properties are in high sought areas.

dopester

dopester wrote: »

I hope you are not underestimating the severity of what is to come !!!!!!.

Earlier in the year the newspapers reported 1 million retail jobs were forecast to be lost... ...combine that with the culling in the City and almost daily stories of some big redundancies here and there....

...together with anecdotal evidence of other businesses feeling the squeeze - and house developers deciding it's not worth building any more... (maybe the builders struggling can happily continue to pay thousands to rent despite being unemployed - and how long will the stupid-high valuations on developers' land-banks last before cashflow forces sales at deep discounts).

Good luck filling your future BTL with securely employed tenants.

And so what it seems so many BTL gurus have glossed over is now becoming more of a fear in the press.

How many in the BTL "long-game" have factored in high unemployment for their yield calculations? I don't even think the articles below are as bearish as they should be. There is a reason the UK Gov isn't caving in to teacher demands for more pay and even risking the wrath of the police by not back-dating pay-increases.

imo we're only at the start of UK house prices falling due to the crazy credit bubble that's been inflating these past 3 to 8 years (funded by stupidly toxic credit/investment instruments).. citizens feeling the pinch of food and energy inflation, and how will BTL's cope with the pincer of increasing unemployment where tenants can't afford the £800pm rent for your apartments (don't make me laugh if you think Housing Benefit will pick up the tab).

Today's Telegraph

Article 1:

Britain could be heading for an "avalanche of redundancies" in the coming months as economic reality finally catches up with the jobs market, a leading expert has warned.

John Philpott, of the Chartered Institute of Personnel and Development, said that the labour market was now close to its peak, and that the rise in unemployment could be more sudden and sharp than in previous economic downturns.

At 5.2pc, the unemployment rate is currently the lowest in many years. The warning comes amid growing fears that, having enjoyed some of its best months on record, the jobs market is set for an imminent deterioration.

Article 2:

"There could well be a stampede, a sudden avalanche of redundancies, if there is more bad news in store. I think this is a new phenomenon. People have become used to mild slowdowns. If it transpires that this [slump] could extend into 2009 or beyond, [companies] won't have any alternative other than to cut jobs."

A deep slowdown, and possibly recession, is now the central prediction for many forecasters. If the housing market continues to deteriorate as fast as it has in recent months, driving consumers away from the high street and depressing profits, it could be the trigger which sets off this avalanche of lay-offs. This could lay the ground for a vicious circle whereby soaring unemployment causes even sharper falls in house prices and economic growth, which in turn spark further job cuts.

PROFESSIONAL_LANDLORD

EDINVESTOR

But the main reason BTL was not a popular activity was because of the restrictive tenancy laws which were only changed in (IIRC) around 1998, with the introduction of the AST lease.This is what kicked off the BTL boom, nothing to do with lax credit.

That post really says it all!


Why would any government change ' A Housing Act ' and open the flood gates to BTLers? probably because they needed to, after maggie's 'Sale Of The Century'

brit1234

Inside Track the big Buy to Let Company has gone bust today:D.

This is great news and shows how unsustainable how buy to let is with the biggest promoter (Inside track) goes down in flames together with the buy to let lenders (Northern Rock, Paragon and soon to be Bradford & Bingley and Alliance & Leicester)

IveSeenTheLight

brit1234 wrote: »

Inside Track the big Buy to Let Company has gone bust today:D.

This is great news and shows how unsustainable how buy to let is with the biggest promoter (Inside track) goes down in flames together with the buy to let lenders (Northern Rock, Paragon and soon to be Bradford & Bingley and Alliance & Leicester)

I'm sorry, your post is confusing.
Is Inside Track a BTL LL (Company) or is it a BTL promoter?

It does not surprise me if they are a promter that there are limited properties to promote.

The amount of properties where the figures add up to buy as a BTL are dramatically reduced, however this does not mean that existing BTL properties will be sold.

stonethrower

Quote:
EDINVESTOR

But the main reason BTL was not a popular activity was because of the restrictive tenancy laws which were only changed in (IIRC) around 1998, with the introduction of the AST lease.This is what kicked off the BTL boom, nothing to do with lax credit.

That post really says it all!


Why would any government change ' A Housing Act ' and open the flood gates to BTLers? probably because they needed to, after maggie's 'Sale Of The Century'

And also the fact that the greatest chancellor in our history decided to tax our pensions to the tune of 5 billion per year. I know 3 people who got involved in the BTL market for this very reason. They collectively have 17 houses between them. Can never understand how he got away with this.

m00m00

IveSeenTheLight wrote: »

I'm sorry, your post is confusing.
Is Inside Track a BTL LL (Company) or is it a BTL promoter?

It does not surprise me if they are a promter that there are limited properties to promote.

The amount of properties where the figures add up to buy as a BTL are dramatically reduced, however this does not mean that existing BTL properties will be sold.

inside track were snake oil salesmen

WTF?_2

IveSeenTheLight wrote: »

I guess this would benefit everyone who is renting and waiting for prices to drop.
If there are more rental properties then this would help to keep the rental rate the same or maybe even lower.
I guess this might explain one reason why it is cheaper to rent than to buy in your area.

Not just a bit cheaper either. Buying to live in or as a BTL investment makes no sense.

Using my current rented house as an example, a typical repayment mortgage with 10% deposit would cost me around 1300-1400 quid had I bought it at the peak, last summer. Rent is just above 400 quid.

In fact, despite having quite a well paid job (compared to local pay levels) I wouldn'teven be able to afford to buy it based on 3.5x salary multiples and 90% LTV. (As it happens I would be able to put a very large deposit down but why would I burn my savings away to cushion equity loss?).

Typical 'luxury apartments' would be costing 1100 quid on an interest only mortgage to buy (ie. rent from the bank). Attainable rent from a tenant is maybe 650 quid. Yet they were being snapped up off plan until about 9 months back.

There are a lot of idiots out there.

LillyJ

That is so area dependant as we are moving to a house from rented where our REPAYMENT mortgage is almost the same cost as our rent (comparable properties, apart from the house we are moving to is in MILES better condition and we might be able to have friends over without being embarrassed at the state of our rented.!)

We are moving just round the corner so it isn't like there is an area variation between the two houses.