BTL - Oh Dear

[AtW]

not like the crud you get in London.

[beaker]

WOW if my worst investment was only as bad as this I'd be semi-retired already.... go on, somebody start a "Worst Investment Ever" thread...

TazMan, I started one a few weeks ago and you contibuted to it!

[max]

Stop changing the subject, the article is about the market now, not what happened 5 years ago. The BTL boom is over, and in a dramatic fashion. Now if it's so rosey in London please provide an example of a property that can be bought on 85% LTV and rented for more than the interest only payment on a 7% loan. From what you have said this should be very easy to do.....

There you go:

http://www.londonpropertywatch.co.uk/pcEC2.html

Average Rental yield for studios in EC2 is 8.3%

Very tasty. You know it makes sense.

Loads of Money...

[Sockpuppet]

So she bought a BTL, her boyfriend already has some BTL properties and yet she now doubts they can afford to buy a house of their own? This is what happens when people don’t get their priorities right, shirley getting a roof over your own head should be top of anyone’s list? Greedy flipers… burn them.

This is the whole point with BTL.

People who dont earn (read: live within their means) enough to buy a house got a credit rating where they could buy it and get some other fool to pay for it.

Now people wonder why it is crashing.

Start of the "correction" I say.

[Sockpuppet]

As I've been saying for a long time, the BTL market is underpinned by sub prime mortgages and by definition these people cannot afford to subsidise the deficit between payment and rent ad infinitum. It's easy for us contractors to 'not get it' but a lot of these 'investors' are on average UK wages, which in most cases is below 30k.
Subsidising 30% of the rent is not an option, hence the correction that is on the way. The level of immigration isn't causing a demand for rental that outstretches supply.

I agree Bagpuss. I work with a lot of migrants and they share up - stupid amounts 10 in a 4 bed house etc (mainly because it would be 5 couples etc.)

Ok so 1.1million are here. I bet more than 100,000 house holds have left UK since 1997

[Sockpuppet]

They're letting out fine in London - rents are on the rise.
I was asking for proof that the BTL market is underpinned by sub-prime mortgages - this implies the majority are sub-prime.

The shoe shine boy cant get anything but a sub prime. Nuff said.

London != the rest of the UK

Even if it is separate thousands of people defaulting up north mean banks lose in the south so they "cost cut" to keep profits high.

[bobhope]

Houses only ever go up though don't you know?

[Lockhouse]

I got into BTL in the UK 7 years ago and I'm getting out now. Although my property has doubled in capital value, the rent I can get for it, dictated by the market, is almost the same as it was then. With increased service charges and running costs, capital value apart, I'm making less than I did seven years ago. These days you have to bank just as much on making your money on rent rather than capital appreciation so unless your stuffing students or immigrants into HMOs (with all the attendant problems - and there are many), IMHO you're better off investing abroad or in something else. That's not to say that the situation won't change, just that there are probably better investments at the moment.

All the latecomers into BTL are the people with the most to lose - the clever money has been and in lots of cases gone (I'm only average so left it a bit late).

[tim123]

Look at Berlin. Low prices, but capital growth coming soon.

That's what they thought when the wall came down, lots of people bought in and got their fingers burned when it didn't happen.

That's what they thought when the Government was moved there, lots of people bought in and got their fingers burned when it didn't happen.

What is this magic happening that's going to make prices in Berlin shoot up? Prices in Berlin are cheap for a reason, there is a huge over supply.

tim

[sasguru]

That's what they thought when the wall came down, lots of people bought in and got their fingers burned when it didn't happen.

That's what they thought when the Government was moved there, lots of people bought in and got their fingers burned when it didn't happen.

What is this magic happening that's going to make prices in Berlin shoot up? Prices in Berlin are cheap for a reason, there is a huge over supply.

tim

You may be right, but I like the city, and £60K is chump change for a Euro pad. Worth a punt.