Buy to let investors

Off_it

Anyone see that documentary this evening on the state of the property market? They were saying that approx 40% of the new build flats in Manchester city centre are currently empty - the huge majority of which were apparently bought by buy to let investors.

Then there was the woman who had recently got divorced and decided that becoming a property landlord was her ticket to a decent future income - but is now about to lose the family home where her kids grew up. Apparently she went to a property seminar, not intending to buy anything, and ended up coming away with 7 properties for over £1million.

So, here's the question - should we be feeling sorry for these people?

Personally, I sympathise with people who fall on hard times, but these people have only got themselves to blame. I wont be losing any sleep for them - the same way they wouldn't have lost any sleep over the rest of us if they's ended up making squillions from their investments.

The value of property can go down as well as up folks - as we are now starting to see!

vancouveraddick

Agree with you Off it.

I just wish some of the fat cats at the big corporations who have gambled, admittedly within a terribly regulated marketplace would get their comeuppance. It must be hard walking away from the huge losses they should take some responsibility for with $xmillion dollars in the bank and a house in the hamptons, hawaii and Bognor...........

Brunello

I have very liitle sympathy. the majority of people who got involved in buy to lets had their judgement clouded by greed and could only see profit. One of the few things I have learnt in my life is that when something looks a one way bet ithe reverse always happens. Altjhough it will be painful, what is happening now is good in the long term as it will allow first time buyers back in the market IF they are diligent and save for it and it will stop house prices rampaging upwards in the future which in the past has been a false and fools economy.

Thommo

I too have little sympathy, the greed machine lives on. Im 27, married and still feel far away from the property ladder. Recently was helping a friend look for a room and so went to look at a few 2 up, 2 down terraces to rent in Birmingham and the idiots have put an extra bedroom in by partitioning so they can get more rent. There are so many properties that have been badly developed by people just after cash not thinking about design or having to live in the houses.

I think people just see cash and dont think logically, more and more numpties are buying up the housing stock, preventing first time buyers getting near to it, bodging jobs and designs by ignoring the trade and ultimately further screwing the housing market.

I feel sorry for anyone who have mortgage problems cos of this "credit crunch", I hope they manage to sort themselves out, however they are the ones that made the choice and fell for the banks promises of free money. Ill be buggered if I think the government should be bailing them out.

DA9

None, its like house prices, say you buy a 3 bedroom semi for £180k 5 years ago, people say it should be worth £230k now, but its remained rooted at £180k, people are going mad saying they have lost money etc etc, how have they? ...you have a roof over your and your familys heads, you haven't lost, only greed tells you that you should be £40-£50k up on it, if your not, as long as the value has not dropped under your original layout, stop panicking.

Brunello

[cite]Posted By: DA9[/cite]None, its like house prices, say you buy a 3 bedroom semi for £180k 5 years ago, people say it should be worth £230k now, but its remained rooted at £180k, people are going mad saying they have lost money etc etc, how have they? ...you have a roof over your and your familys heads, you haven't lost, only greed tells you that you should be £40-£50k up on it, if your not, as long as the value has not dropped under your original layout, stop panicking.

Therein lies the problem. People thought house equity was cash so they borrowed against that and spent it hence credit card borrowing rose above £1 trillion. Now house prices are back where they should be those people are left with the debt and no means to repay it. I agree with Thommo, no way should the government bail these people out.

Medders

[cite]Posted By: DA9[/cite]None, its like house prices, say you buy a 3 bedroom semi for £180k 5 years ago, people say it should be worth £230k now, but its remained rooted at £180k, people are going mad saying they have lost money etc etc, how have they? ...you have a roof over your and your familys heads, you haven't lost, only greed tells you that you should be £40-£50k up on it, if your not, as long as the value has not dropped under your original layout, stop panicking.

True. Besides, the value only matters if you're selling. So what if the value of my house had gone up £20k - I've no way of getting hold of that extra £20k have I! Equally, if the value goes down, only matters if I'm selling...

DA9

[cite]Posted By: Medders[/cite]

[cite]Posted By: DA9[/cite]None, its like house prices, say you buy a 3 bedroom semi for £180k 5 years ago, people say it should be worth £230k now, but its remained rooted at £180k, people are going mad saying they have lost money etc etc, how have they? ...you have a roof over your and your familys heads, you haven't lost, only greed tells you that you should be £40-£50k up on it, if your not, as long as the value has not dropped under your original layout, stop panicking.

True. Besides, the value only matters if you're selling. So what if the value of my house had gone up £20k - I've no way of getting hold of that extra £20k have I! Equally, if the value goes down, only matters if I'm selling...

Agreed, I have a large collection of Elvis memorabillia, the other half says it must be worth this or that on ebay etc, I tell her, its worth jack if your not intending to sell it so its irrelevant.

SantaClaus

The government are already bailing these people and the whole market out with the sickening shared equity schemes (to help first time buyers lol) and by ordering housing associations to buy up stock. Both moves are nothing but props to an inflated market for political reasons. If people start getting further bail outs for their stupidity and greed i hope there are riots.

SoundAsa£

[cite]Posted By: Brunello[/cite]I have very liitle sympathy. the majority of people who got involved in buy to lets had their judgement clouded by greed and could only see profit. One of the few things I have learnt in my life is that when something looks a one way bet ithe reverse always happens. Altjhough it will be painful, what is happening now is good in the long term as it will allow first time buyers back in the market IF they are diligent and save for it and it will stop house prices rampaging upwards in the future which in the past has been a false and fools economy.

Interesting Brunello that someone who try's to make a few quid quite legitimately(not all buy to let folk are greedy rip off merchants with large or multi property portfolios) is thought of by you as being greedy, quite a sweeping statement by you there.
I know quite a few friends and relatives who have done this on a smallish scale, with just one or two places to let.These are honest genuine enough people (yes I do know some believe it or not).So to try and improve oneself and have something put by for later in life by buying/selling/letting a bit of property is having ones judgement clouded by greed is it......nonesense mate!
By FAR the biggest majority of folk who have done this are not 'career buy to let property agents' but just fairly average Joe's looking at a way of securing their futures, as much as trying to make huge profits.
I know you said the word 'majority' in your post but the overall inference was that anyone who has done this and got their arses singed has in someway been greedy and therfore deserves little or no sympathy. Simply NOT true!

DA9

At the end of the day investments can go down as well as up, its their risk, I care not either way if they succeed or not.

No one would give a hoot if I bought a top of the range Jaguar on the reccomendation of Top Gear, and then it started deppreciating a few hundred quid a month.

SoundAsa£

That's right DA9 and I'm not saying anything different as life in general is something of a gamble of course from start to finish but there are a lot of folk out there who haven't neccesarily been greedy and are just having a bit of bad luck right now...it will turn around though sooner or later, it always does, especialy where property is concerned.

cafcbrown

On another note, As an ex employee of Halifax, it really angers me to see the large "payoff" to the cheif executive, Andy Hornby, Rumoured to be around 2 million, when alot of my friends are wondering if they will even have a job by the end of the year. If any normal person failed in their job, they would be kicked out the back door.

mart77

[cite]Posted By: DA9[/cite]At the end of the day investments can go down as well as up, its their risk, I care not either way if they succeed or not.

I'm of this view but unfortunately things like this will have a knock on, on the whole country, and not just the buy to letters. Hopefully this will see an end to the constant stream of property programmes that have bedazzled so many people into thinking that making money in property is a breeze.

kigelia

i don't see the buy to let investors as anything different from small business owners. The vast majority of small business don't last a long time, and this is just the same.

that said all the time government is helping out big banks because of their greed then I have no problem with them helping out the 'man on the street' who has got him/her self in trouble.

DA9

So the government using taxpayers money to bail out people who have taken risks with their own money is OK then?

Can I get a government handout if I play the casino's on a regular basis and keep losing?

Not saying everyone who invests is being greedy, far from it, but they knew the risks when they invested, its just bad luck and taxpayers should not have to bail them out IMO

SantaClaus

Agree 100% DA9. Btw SoundAs£ did your friends/family borrow heavily for these btl's? If they put their own money up fair play but if they borrowed a huge percentage of house price on a btl then that is a greedy and stupid gamble and i've absolutely no sympathy if they lose every penny.

Off_it

Agree with you DA9.

Would we have shared in the profit if these people had made bundles? No, so we shouldn't share in their loss.

Salad

agreed DA9, it is fine if people want to gamble to try to "secure their future", but if they lose (as is happening now) they shouldn't be bailed out

DA9

[cite]Posted By: Off_it[/cite]Agree with you DA9.

Would we have shared in the profit if these people had made bundles? No, so we shouldn't share in their loss.

Good point

SoundAsa£

[cite]Posted By: SantaClaus[/cite]Agree 100% DA9. Btw SoundAs£ did your friends/family borrow heavily for these btl's? If they put their own money up fair play but if they borrowed a huge percentage of house price on a btl then that is a greedy and stupid gamble and i've absolutely no sympathy if they lose every penny.

I don't know is the answer to that.

Brunello

[cite]Posted By: SoundAsa£[/cite]

[cite]Posted By: Brunello[/cite]I have very liitle sympathy. the majority of people who got involved in buy to lets had their judgement clouded by greed and could only see profit. One of the few things I have learnt in my life is that when something looks a one way bet ithe reverse always happens. Altjhough it will be painful, what is happening now is good in the long term as it will allow first time buyers back in the market IF they are diligent and save for it and it will stop house prices rampaging upwards in the future which in the past has been a false and fools economy.

Interesting Brunello that someone who try's to make a few quid quite legitimately(not all buy to let folk are greedy rip off merchants with large or multi property portfolios) is thought of by you as being greedy, quite a sweeping statement by you there.
I know quite a few friends and relatives who have done this on a smallish scale, with just one or two places to let.These are honest genuine enough people (yes I do know some believe it or not).So to try and improve oneself and have something put by for later in life by buying/selling/letting a bit of property is having ones judgement clouded by greed is it......nonesense mate!
By FAR the biggest majority of folk who have done this are not 'career buy to let property agents' but just fairly average Joe's looking at a way of securing their futures, as much as trying to make huge profits.
I know you said the word 'majority' in your post but the overall inference was that anyone who has done this and got their arses singed has in someway been greedy and therfore deserves little or no sympathy. Simply NOT true!

I apologise if my views were generalistic for which i apologise but I have met many people from the small to the large and all, to a person, have thought that it was an easy way to make money and would definitely be safe. My point was and is that those people whether through greed or naivety entered into a risk investment do not deserve sympathy now it has gone wrong.

StanmoreAddick

Been away for a couple of weeks and am wondering if i have missed something here.

Has there been any specific announcement of intention to help borrowers who might get into trouble- all i have heard about is possible help for lenders....

BlackForestReds

[quote][cite]Posted By: DA9[/cite][quote][cite]Posted By: Off_it[/cite]Agree with you DA9.

Would we have shared in the profit if these people had made bundles? No, so we shouldn't share in their loss.[/quote]

Good point[/quote]

Technically we would have done if they paid tax.

InspectorSands

Buy-to-letters were distorting the market when I bought my place and that was 9 years ago. As Salad points out, some did it to secure their future, but those who did it as speculation can rot as far as I'm concerned. Bring on the crash.

DA9

[cite]Posted By: BlackForestReds[/cite]

[cite]Posted By: DA9[/cite]

[cite]Posted By: Off_it[/cite]Agree with you DA9.

Would we have shared in the profit if these people had made bundles? No, so we shouldn't share in their loss.

Good point

Technically we would have done if they paid tax.

But the tax payment on any potential profit made would have been a lot lot lower than any planned handout from the public purse to bail them out.

I go back to my original scenario, if I invest (and the key word with all this is investment, its the risk they or I would take by my own choice)in a race horse and it goes lame, should I claim help?, same situation IMO.

I'm all for people in genuine need who may being losing their family home to be helped in someway due to the economic turndown, but not for private investors who take a gamble.

SoundAsa£

[cite]Posted By: InspectorSands[/cite]Buy-to-letters were distorting the market when I bought my place and that was 9 years ago. As Salad points out, some did it to secure their future, but those who did it as speculation can rot as far as I'm concerned. Bring on the crash.

Ermmmm...ever thought that the buy to let guys were thinking the same about you buyers 'distorting' the market paying well over the odds(as indeed many did)...curious to know what you think the market is or indeed should be...one that suits you it would seem....in that your not alone so don't feel guilty about it.We're all in it together, some are better placed than others at different times....it's a buyers market right now and those folk are in a lot better position than buy to let guys(that market has all but collapsed), so it goes around...no one particular section 'distorts' the market on a permanent basis.Ten years down the line it will be a new set of circumstances and a completely different ball game...just you wait and see.