Registered: Aug 2008
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Lenders approved fewer buy to let mortgages during the first half of this year, as property investors struggled to find financing amid strained conditions in the money markets.

Looks like BTL may have had its day.

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Registered: May 2003
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That's a bit like saying something like going out for a meal has "had its day".

When things are tight, investment priorities - and spending priorities - change. It doesn't mean they're finished. I seem to remember reading recently that even the now much-hated endowment policy may be resurrected and become popular (and profitable) once more.

I'd say that buy-to-let will pause somewhat, not disappear completely.

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Registered: Aug 2008
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Thanks Rudolph yes BTL will slow and not completly stop. We will have to wait at least 3-4 years before BTL becomes popular again.

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Do you really think it will be that long?

I would have put it at 18 months maximum. And IF interest rates move down, as I think they will over the next few months, BTL becomes a more attractive proposition.

It would be interesting to know whether the fewer BTL mortgages approved is because of lender's reluctance to part with cash because the money supply is tight, or whether there are actually fewer applications. With the likelihood that property prices will drop at least a little further (I would guess to around 15% off their recent peak), it's not surprising that buyers - BTL or otherwise - are reluctant to enter into purchases when there's every chance they could see their capital investment drop somewhat. Although, I hear from estate agents in the last two or three weeks that there are the stirrings of buying interest in residential property generally - particularly from cash buyers looking for bargains.

The increase or decrease in the number REJECTED would be a far more revealing statistic, I think.

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quote:

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Originally posted by Rudolph
Do you really think it will be that long?

I would have put it at 18 months maximum. And IF interest rates move down, as I think they will over the next few months, BTL becomes a more attractive proposition.

It would be interesting to know whether the fewer BTL mortgages approved is because of lender's reluctance to part with cash because the money supply is tight, or whether there are actually fewer applications. With the likelihood that property prices will drop at least a little further (I would guess to around 15% off their recent peak), it's not surprising that buyers - BTL or otherwise - are reluctant to enter into purchases when there's every chance they could see their capital investment drop somewhat. Although, I hear from estate agents in the last two or three weeks that there are the stirrings of buying interest in residential property generally - particularly from cash buyers looking for bargains.

The increase or decrease in the number REJECTED would be a far more revealing statistic, I think.

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BTL is toast the numbers dont stack up and you would have to be a brave man to call the bottom, I believe it is called catching a falling knife.

BoE rates may well come down 2 problems with this 1 rates are artificial low and need to be higher to combat inflation, 2nd BTL is mainly financed off LIbor which is not going to come down anytime soon.
and a 3rd lenders will not be lending to any newbie landlords so only people with a portfolio will be able to buy and having lost the best part of 50% equity on flats they may not want to get into more debt in a market that still has not touched bottom.

here is a graph of investor phscology



The bull trap was 2005 when the BoE dropped rates and have now confirmed it was a mistake.

This chart is to show how bad it is already compared to the 1990's



I cant find a chart for the 1970's house price crash, but I am led to believe because of rampant inflation a lot of people did not notice

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