Comments on: Bye-bye buy-to-let

By: Simon

Simon — Tue, 18 Nov 2008 15:46:08 +0000

re. David Morgan.

I suspect your answer is more prescient than you (may) realise. I reckon that there is (or is soon to be) mass emigration and the streets will soon be filling!

Oh, and crash.

By: Lance Nelson

Lance Nelson — Tue, 18 Nov 2008 13:31:55 +0000

Yes, and when does a crash become a crash though?

Looks like we’ll all be filling up our spare rooms with people, immigration will slow or reverse and as you say the myth of UK housing shortage disappears. Or is it the houses we all aspire to live in that are in short supply?

Its happening so fast. If oil, food and house prices wind back 5,6 7 years or so, we should be set for an economic boom like we’ve never seen before.

optimistically, Lance

By: robert Lundon

robert Lundon — Tue, 18 Nov 2008 12:15:04 +0000

there is a shortage of property but only affordable and rents of Â£500-Â£1000 p/m are just a joke Rental properties are now looking for 30-40% of ave income and that just wont work. In the inercities everyother property has a for let sign replacing the for sale sign. Any rent above Â£500 p/m in Scotland is just not affordable as the council tax will cost another 200 p/m. If a landlord looks at a property at antthing over Â£75,000 and based on 80% occupancy level ( if you are lucky) and interest at 6.5% you will just break even and thats alot of ifs and buts and does not take into account any capital repayment good luck time to jump

By: The Accountant

The Accountant — Tue, 18 Nov 2008 12:00:14 +0000

Your analysis is correct as far as it goes. But there is a step further to consider. There are at least two distinct groups of landlords. First comes the “established” property investor who has been in the sector for say 10 years or more. He (or she) bought wisely putting a reasonable deposit into the investment and has NOT remortgaged as the value of the property rose. Then comes the “get rich quick” “can’t go wrong with property” landlord. They bought without putting any deposit into the venture (quite often the builder paid back to the investor the deposit apparently paid for the purpose of the mortgage application). Then this type compounded the error by remortgaging as the property increased in value. Some of these bright sparks even used the proceeds of the remortgage to finance a certian lifestyle (well property never goes down in value, does it).
If we could divide the property landlords who are in arrears along the lines above, I too would offer a small prize for the successful conclusion

By: David Morgan

David Morgan — Tue, 18 Nov 2008 11:58:45 +0000

So people don’t want to buy, and now they don’t want to rent either. Three possible explanations that I can see:
- mass emigration
- many more sleeping on the streets
- lots moving into spare bedrooms (cf. earlier articles on this site).

Not having seen any recent news about the first two options, I guess it’s primarily the third that people are taking.

By: jean marais

jean marais — Tue, 18 Nov 2008 11:44:58 +0000

Haven’t we been down this road before? I believe that the demand for housing will always be more than the supply. It may well be that the price of property will not be as high as we have known it in the last decade, but it will go up in the next five years.