Revealed: the full shocking extent of the buy-to-let market collapse

[Calcaria]

THE TELEGRAPH

Revealed: the full shocking extent of the buy-to-let market collapse
By Isabelle Fraser
http://www.telegraph.co.uk/property/hou ... -collapse/

...
The number of properties sold to buy-to-let investors has fallen 63.7pc in the year to November in England and Wales, according to the estate agency Haart, dropping 8.2pc last month alone. In London, the number of such properties sold fell by 40pc.
It also reported that the number of landlords registering to buy properties is down 59.2pc annually. ...

Buy-to-let investor, 28: The Government is ruining my life's work
Ryan Windsor
Windsor Properties
http://www.telegraph.co.uk/investing/bu ... ifes-work/

[TopOnePercent]

While I have a certain sympathy with his plight, I cannot take seriously the concept that anyone aged just 28 has established a "lifes work". A decades work, sure, but a lifes work implies the back quarter of a working life at least. What say you exFools? (as an aside, what are we now? Lemons?)

[Arborbridge]

What say you exFools? (as an aside, what are we now? Lemons?)

I'm quite partial to slurping lemon fool

[brightncheerful]

I should think a contributory factor to the drop in sales for btl is that investors are turning their attention to commercial property.

c/p offers higher yield, generally less hassle, and freedom mostly from interfering politics. Play your cards right, get experienced advisers on your side, and there are rich pickings. Of course, you have to know what you are doing otherwise like many in btl you'll come unstuck.

[dspp]

Just an anecdotal but a neighbour knocked on my door asking for advice with improving the Energy Performance Certificate for some of her flats as it is starting to hurt their lettability. She commented it is all becoming too difficult / not worth it.
regards, dspp

[IsleofWightPete]

She commented it is all becoming too difficult / not worth it.

Yes, I have heard several examples of landlords deciding to sell up recently. I had a property advertised , and three of the people who viewed said they were looking for new accommodation because their landlord was selling up. The reasons are varied, I think.

The recent benefit cap changes are impacting tenants. Where the previous levels only affected a relatively few families outside London, the latest round is biting deep, and affecting much larger numbers, and I know some landlords are looking to evict tenants before the arrears start to mount.

The new rules requiring service of EPC, Gas safety cert, How to Rent leaflet to new tenants (on pain of not being able to serve a s21 if you forget) on top of the requirements to conduct Right to Rent checks, the ever increasing legislation eg requiring smoke alarms, and the prospect of mandatory electrical installation inspections, possibly at each change of tenancy, are all adding to the disillusionment. None of it is impossible on its own, but put together it is becoming more and more difficult and complicated.

Plus the changes that prevent agents making any up front charges to tenants.

Add that to the changes no longer allowing interest payments to be fully offset against rental income, which is making the whole business very marginal, or even outright loss making for some landlords (especially where highly leveraged) and I can see a significant move towards the exit.

However, I don't see this magically causing house prices to drop meaningfully, and neither do I see a whole bunch of tenants suddenly being able to afford to buy, but I do see it causing a shortage of stock in the private rental sector, resulting in a significant upward pressure on rents which is going to cause MAJOR problems especially where housing benefit is effectively frozen, and no longer allows recipients to rent even in the bottom 25% of the market in many cases.

The law of unintended consequences is about to kick in.

[StepOne]

Is it possible these properties being put on the market by disillusioned landlords will just be bought up by other landlords - possibly by slightly more 'professional' landlords who are on top of all the new legislation, who might see the opportunity to pick up some of these properties at decent prices?

[DiamondEcho]

Is it possible these properties being put on the market by disillusioned landlords will just be bought up by other landlords - possibly by slightly more 'professional' landlords who are on top of all the new legislation, who might see the opportunity to pick up some of these properties at decent prices?

I doubt it, 'professional' landlords, investors etc tend to have a materially higher hurdle rate on what they consider an investment worth making, vs a typical B2Ler. I recall when I started out [early/mid 90s] they wouldn't touch anything yielding under 20%, whereas lil' old me was happy with c12%.
There is a limit to both sale value, and the rental value of a property, and both tend to move very slowly. So it will be years until a pro can simply find good and easy value within the B2Ls being shed by small-timers.