Will the BTL market crash?
Discussion
Residential rents will be unaffordable for months to come so LLs with mortgages might be twitching as they’ll be offered half rent at best, but things will carry on as ‘normal’ long term, they have to, people still need somewhere to live.
If I was a commercial LL relying on renting out office space I’d be s
tting myself.
If I was a commercial LL relying on renting out office space I’d be s
tting myself.There might become a time to buy ( similar to shares ) but if you are actively looking now and paying the current prices then i think it would be brave. If you are waiting for stock to fall then i can understand but im talking about people who are living of BTL on interest only mortgages. If there is huge unemployment i think rents will be hard to find or at least reduce . I have several commercial properties that i utilise for myself and i am aware in the local towns that commercial tenants are already approaching landlords for reductions
Edited by Chipper on Saturday 4th April 09:32
My view:
Residential - tenants on benefits unaffected. Working tenants will in the main get 80% of salary and where they have to revert to benefits then LHA has recently been put up hugely across England. Of course some tenants will still get 100% pay and others nothing. All in all residential landlords will take a haircut but not necessarily a disaster across the board. Demand for residential will remain constant.
Commercial - we've seen high street chains going bust for years and other chains seeking rent reductions. If you're in to high street commercial then the outlook is dismal. Similarly for office based commercial after CV many companies that survive will be the ones that made working from home work for them and they will move to that model full time. Industrial units residential, again after CV I see many companies going bust. Demand for commercial will fall.
All in all I'd not want to be in commercial property right now.
All is just imho. Time only will tell.
Residential - tenants on benefits unaffected. Working tenants will in the main get 80% of salary and where they have to revert to benefits then LHA has recently been put up hugely across England. Of course some tenants will still get 100% pay and others nothing. All in all residential landlords will take a haircut but not necessarily a disaster across the board. Demand for residential will remain constant.
Commercial - we've seen high street chains going bust for years and other chains seeking rent reductions. If you're in to high street commercial then the outlook is dismal. Similarly for office based commercial after CV many companies that survive will be the ones that made working from home work for them and they will move to that model full time. Industrial units residential, again after CV I see many companies going bust. Demand for commercial will fall.
All in all I'd not want to be in commercial property right now.
All is just imho. Time only will tell.
Chipper said:
Just given a 50% discount to a commercial tenant for the next three months. We look like we are heading for a proper economic @@@@ storm . Surely the inexperienced BTL landlord’s must be looking at their portfolios and panicking?
BTLers who may become forced sellers will take a kicking.- Landlord laid off from work
- All savings have been pumped into BTL
- Tenant stops paying rent
- Landlord desperate for cash
- Landlord becomes forced seller of a tenanted property with the tenant in default and the government promising tenant protection.
rockin said:
BTLers who may become forced sellers will take a kicking.
If there is a 20 %+ drop in property these will be loads of landlords trapped. It will be a snowball- Landlord laid off from work
- All savings have been pumped into BTL
- Tenant stops paying rent
- Landlord desperate for cash
- Landlord becomes forced seller of a tenanted property with the tenant in default and the government promising tenant protection.
rockin said:
BTLers who may become forced sellers will take a kicking.
Agree, that’s a truly ugly situation that may become common. Space for someone quite unscrupulous with a bit of capital to make I killing I would have thought. - Landlord laid off from work
- All savings have been pumped into BTL
- Tenant stops paying rent
- Landlord desperate for cash
- Landlord becomes forced seller of a tenanted property with the tenant in default and the government promising tenant protection.
NickCQ said:
rockin said:
BTLers who may become forced sellers will take a kicking.
Agree, that’s a truly ugly situation that may become common. Space for someone quite unscrupulous with a bit of capital to make I killing I would have thought. - Landlord laid off from work
- All savings have been pumped into BTL
- Tenant stops paying rent
- Landlord desperate for cash
- Landlord becomes forced seller of a tenanted property with the tenant in default and the government promising tenant protection.
If someone wishes to build a heavily leveraged portfolio to ride an upside, they can't wine and moan if they don't like the downside risk, however exceptional the circumstances.
For a buyer to step forward with capital and to pay market price to prevent a distressed seller going bankrupt/defaulting to bank, is a good thing for a seller. It's a tough situation, but it's not a poor reflection on the buyer. The market is going to need & want buyers or the downtick will be even worse.
Let's not jump to villify those who step forward. We should champion those who transact, as that's what we need to happen to turn a corner.
Stu
Ps. It's the tenants i feel sorry for in this story.
stuthe said:
said: I think "unscrupulous" is a shade unfair.
...
For a buyer to step forward with capital and to pay market price to prevent a distressed seller going bankrupt/defaulting to bank, is a good thing for a seller. It's a tough situation, but it's not a poor reflection on the buyer. The market is going to need & want buyers or the downtick will be even worse.
The scenario you describe isn't unscrupulous by any means but you aren't being creative enough....
For a buyer to step forward with capital and to pay market price to prevent a distressed seller going bankrupt/defaulting to bank, is a good thing for a seller. It's a tough situation, but it's not a poor reflection on the buyer. The market is going to need & want buyers or the downtick will be even worse.
The way to make a lot of money out of this is to find a bank that's distressed enough to sell you (an unregulated SPV, potentially in Lux or Cayman) a portfolio of stressed / defaulted mortgages for pennies on the dollar. Then you aggressively pursue enforcement action against all the borrowers rather than granting forbearances (as a regulated bank is required to), and take possession of all the collateral having carried out a mass eviction.
rfisher said:
Yeah - where is our Glaswegian btl magnate these days?
Hope he's ok.
Quite enjoy his spats with various PH pensions bods.
That'll be me! Hope he's ok.
Quite enjoy his spats with various PH pensions bods.
I'm fine thanks - as you'd expect given the number of DSS tenancies I profiteer from. Very nice people they are too.
amongst the various portfolios we've so far only got one rat who's vanished from sight, and a handful of commercials who've been ordered to stop trading so have gone to 50% rent, but, to be honest, so far all is, well, pretty normal.
Costs have dropped as it's emergency works only, and I have one problem property under full renovation which Scottish Power are refusing to put a meter into (so you can guess how that one's going to progress), but the non-DSS tenants (apart from said rat) are all pretty well sorted with benefits/grants/assistance of one kind or another. I will, of course, respond appropriately to any of them who run into financial trouble and the most vulnerable all have a number to phone if they run into any other kind of bother.
Looking forward, no rent shortfalls will be pursued or sought when this crap ends from people who've done their best etc. But the rat, and any other rats, will be be relentlessly pursued via every available legal means including tracing agents and specialist debt recovery agents regardless of how long it takes or how cost ineffective the process is.
But, bottom line, Saul Goodman!
Oh yes, there IS one other thing. Last Thursday Santander decided to freeze my accounts without explanation. I take it that's Santander's way of helping a severely disabled self-isolated pensioner cope with the current crisis (and no, I'm certainly NOT entitled to any of Rishis's Ruses). Fortunately there are many mates and favours to call upon so Santander can go suck donkey dong. The 4 weekly HB drop is due in a few days anyway. If the courts were open the freeze would be getting unfrozen tomorrow. But they're not, so that one can go back burner.
Actually yes, there IS another and proper serious issue. The Wine Society has temporarily ceased operations!! But Majestic have been, well, majestic. So life goes on pretty well as it always does.
Muy bueno mi amigo!!!
ETA: sidicks' current multiple ID is 'Oldscottishgit'. How does he manage to create these id's without them appearing on the Member Directory?
Edited by Groat on Sunday 5th April 23:32
BTL is going to fall.
It’s then going to fall more when punitive tax rises come in.
I say that as someone who has retired and now generate some of my income from BTL
I think all assets will fall quite frankly.
In the north a lot of property is cheaper than it was in 2007 and I think it’s going to fall more from here.
Interesting times ahead
It’s then going to fall more when punitive tax rises come in.
I say that as someone who has retired and now generate some of my income from BTL
I think all assets will fall quite frankly.
In the north a lot of property is cheaper than it was in 2007 and I think it’s going to fall more from here.
Interesting times ahead
All of my properties are still occupied with tenants who are able to pay as per normal.
I have 2 more that have just become available to rent. However, so far have had chancers enquiring. Would rather have them empty for the next 24 months than rent it to a problem tenant/opportunistic PCPer. However, I fully expect to have both let out within 6 months.
The BTL market will stay strong. Low interest rates for the next 10 yrs and more demand for rental property will keep it this way. It is the owner occupied property that is more at risk.
I have 2 more that have just become available to rent. However, so far have had chancers enquiring. Would rather have them empty for the next 24 months than rent it to a problem tenant/opportunistic PCPer. However, I fully expect to have both let out within 6 months.
The BTL market will stay strong. Low interest rates for the next 10 yrs and more demand for rental property will keep it this way. It is the owner occupied property that is more at risk.
Edited by Audemars on Sunday 5th April 21:08
I had a good tenant give notice at the beginning of Feb and leave at the end of the month.
I was quite pleased as I was happy to sell up as it’s now 250 miles from where I live.
I had quite a few viewings but then obviously everything stopped.
So we put it up to let again and was inundated and it let within a week, so I’d say btl is still
Very bouyant.
I was quite pleased as I was happy to sell up as it’s now 250 miles from where I live.
I had quite a few viewings but then obviously everything stopped.
So we put it up to let again and was inundated and it let within a week, so I’d say btl is still
Very bouyant.
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