Tuesday, February 17, 2009
Buy to Let is not Dead says David Lawrenson of LettingFocus.com
Come to Our Next Evening Property Event in London Evening
I’m afraid the public have a very warped perception of buy to let which is to some extent a direct result of the way the media has reported it.
Clearly there has been a true story about how various property clubs and developers persuaded hapless new would-be landlords to invest in flats in massive developments consisting of hundreds of other me-too flats.
At the turn of the millennium tapping this new investor class was an easy way to raise money to finance the development of many an identikit block. The promoters churned out smart marketing brochures which neatly tapped into the UK public’s hunger to “be in” on the buy to let boom and to make money as easily as other landlords already had in the mid to late 90s.
Of course, far too many of these flats were built and sold to too many would-be landlords and with not enough tenants around wanting to rent them the prices of the flats and the rents have since been flat at best or falling at worst.
Naturally, the media have (eventually!) rightly picked up on this as a story - in some cases a bit of fraud was involved on the new builds too to spiece it up - and it has coloured the public’s perceptions of the returns that can be made from residential letting.
The reality is, however, that the typical landlord of whatever size has none or very few new build flats in their portfolio. They also often have a low loan to value on their mortgage borrowings and are therefore often able to access extra funding relatively easily if they need to in order to snap up the bargain properties that are increasingly now appearing.
FALLING INTEREST RATES
Right now they are also enjoying the fruits of falling interest rates and relatively strong demand from tenants (although this has been tempered somewhat recently by a rise in the amount of stock due to many accidental landlords who are letting their property as they cant sell it.)
And demand from tenants will stay strong as long as mortgage lenders demand high deposits and high product fees from first time buyer mortgages.
Longer term, a demand for a more flexible lifestyle will also increase the demand for renting.
Certainly, house prices are falling but many landlords, both large and small, are in property letting for the long term. And as long as they are generating cash on their existing property portfolios they will be happy. Many are now using that better cash flow to dip their toes in the water to buy cheaply – if you don’t think so, just go to any auction room.
True, things look very dark today but the credit shortage will eventually end and when it does there will be lots of money chasing very little available property - a direct consequence of the lack of new house building today.
And with the ability to set off interest against rental income and reasonably generous CGT breaks residential property looks a good bet from the tax perspective too.
Come to Our Next Evening Property Event in London Evening of 18th March
BECOME AN AFFILIATE OR ADVERTISE ON OUR SITE
We will soon be taking advertising at our site.
If you would like to advertise here or have a product to offer our readers on an affiliate basis, please Contact Us button at our main site http://www.lettingfocus.com/
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord and property letting advice experts. Read More Articles on Property by David Lawrenson.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - Buy Successful Property Letting - How to Make Money in Buy to Let.
The new edition is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on sale and rent back.
I’m an expert freelance property writer and property speaker - and I run the well known property investment blog that you are reading now.
Come to Our Next Evening Property Event in London Evening of 18th March
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general property letting advice for a fee to anyone looking to buy property for themselves or to let out. I can help private individuals with any aspect of buying property or buy to let.
What’s unique about lettingfocus.com is that we are independent property investment advisors because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from these sources.
We simply give one to one unbiased advice and are often asked to evaluate other property investments.
In my corporate consulting role I also advise banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my blog & find details of my networking, advice and property training programme at my website.Copyright: David Lawrenson 2009. This blog is updated once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
It’s easy.
If you are on the home page of our blog, go to the bottom of any post, and click on “LINK TO THIS POST” to bring up the page for a specific post, then hit END …and on the right you’ll see “Site feed.”
If you are already on a specific post page, just hit END and you will see the site feed.
You then just copy the link that comes up into your News Reader or News Aggregator. Even a non techie like me managed to do all this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require the full links shown in each blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted to members.
I’m afraid the public have a very warped perception of buy to let which is to some extent a direct result of the way the media has reported it.
Clearly there has been a true story about how various property clubs and developers persuaded hapless new would-be landlords to invest in flats in massive developments consisting of hundreds of other me-too flats.
At the turn of the millennium tapping this new investor class was an easy way to raise money to finance the development of many an identikit block. The promoters churned out smart marketing brochures which neatly tapped into the UK public’s hunger to “be in” on the buy to let boom and to make money as easily as other landlords already had in the mid to late 90s.
Of course, far too many of these flats were built and sold to too many would-be landlords and with not enough tenants around wanting to rent them the prices of the flats and the rents have since been flat at best or falling at worst.
Naturally, the media have (eventually!) rightly picked up on this as a story - in some cases a bit of fraud was involved on the new builds too to spiece it up - and it has coloured the public’s perceptions of the returns that can be made from residential letting.
The reality is, however, that the typical landlord of whatever size has none or very few new build flats in their portfolio. They also often have a low loan to value on their mortgage borrowings and are therefore often able to access extra funding relatively easily if they need to in order to snap up the bargain properties that are increasingly now appearing.
FALLING INTEREST RATES
Right now they are also enjoying the fruits of falling interest rates and relatively strong demand from tenants (although this has been tempered somewhat recently by a rise in the amount of stock due to many accidental landlords who are letting their property as they cant sell it.)
And demand from tenants will stay strong as long as mortgage lenders demand high deposits and high product fees from first time buyer mortgages.
Longer term, a demand for a more flexible lifestyle will also increase the demand for renting.
Certainly, house prices are falling but many landlords, both large and small, are in property letting for the long term. And as long as they are generating cash on their existing property portfolios they will be happy. Many are now using that better cash flow to dip their toes in the water to buy cheaply – if you don’t think so, just go to any auction room.
True, things look very dark today but the credit shortage will eventually end and when it does there will be lots of money chasing very little available property - a direct consequence of the lack of new house building today.
And with the ability to set off interest against rental income and reasonably generous CGT breaks residential property looks a good bet from the tax perspective too.
Come to Our Next Evening Property Event in London Evening of 18th March
BECOME AN AFFILIATE OR ADVERTISE ON OUR SITE
We will soon be taking advertising at our site.
If you would like to advertise here or have a product to offer our readers on an affiliate basis, please Contact Us button at our main site http://www.lettingfocus.com/
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord and property letting advice experts. Read More Articles on Property by David Lawrenson.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - Buy Successful Property Letting - How to Make Money in Buy to Let.
The new edition is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on sale and rent back.
I’m an expert freelance property writer and property speaker - and I run the well known property investment blog that you are reading now.
Come to Our Next Evening Property Event in London Evening of 18th March
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general property letting advice for a fee to anyone looking to buy property for themselves or to let out. I can help private individuals with any aspect of buying property or buy to let.
What’s unique about lettingfocus.com is that we are independent property investment advisors because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from these sources.
We simply give one to one unbiased advice and are often asked to evaluate other property investments.
In my corporate consulting role I also advise banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my blog & find details of my networking, advice and property training programme at my website.Copyright: David Lawrenson 2009. This blog is updated once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
It’s easy.
If you are on the home page of our blog, go to the bottom of any post, and click on “LINK TO THIS POST” to bring up the page for a specific post, then hit END …and on the right you’ll see “Site feed.”
If you are already on a specific post page, just hit END and you will see the site feed.
You then just copy the link that comes up into your News Reader or News Aggregator. Even a non techie like me managed to do all this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require the full links shown in each blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted to members.
Labels: buy to let ghettos, CGT, identikit flats, landlord advice, landlords tax, property letting tax
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