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  • Stickies & Evergreen

    Is BTL dead or am I just late to the party?



    Hi,

    I have been following PT for a while now and spent the day at the Property Investor Show in London this past Saturday.  Highlights were Richard Blanco, Kate Faulkner, Adam Blaxter and Venessa and her panel.

    However, I must say it didn’t turn out as I thought. I headed off expecting to gather some pearls of wisdom on how to launch my BTL property portfolio but after 6+ hours I left with more questions/concerns than answers and feeling a little gun shy.  Here is a summary – I’d really appreciate some peace/pushback on these concerns:

    1. The BTL market is facing some significant headwinds – at least for the next 2-3 years:
      1. Tax changes and other increased regulation
      2. Rising interest rates
      3. Lower yields
      4. Low capital growth
    2. The BLT market is set to fundamentally change in the next 12-15 years with the impact of blockchain.  The result will be “perfect competition” and instant comparison of value (for both purchaser and renter), putting significant pressure on “buy low – sell high” type strategies (and overall price?).
      1. the speed and form of property transfer and other services (including raising finance) will increase
      2. the form of property ownership looks to become more “fractional” than absolute title deed – large corporates selling shares which will give shareholders “right of occupancy” as opposed to outright Title
      3. the supply and demand gap will narrow as Artificial Intelligence seamlessly match tenant and property – adding further downward pressure on property and rental values

    I found myself asking if I would be better off loaning my money for a 15% pa return rather than investing into BTL?

    I really like the benefits of property: tangible assets, fair yield and capital growth….. but wonder if I am late to the party?

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    Hi Mike and welcome to the party!  Great title for a thread. Smile

    There is no doubt there is significant change coming to the sector, but wherever there is change, there will be opportunity for those who choose to see the angles.

    In fact, I would say that you have a distinct advantage as what you are coming to will be "normal" for you!

    It is good that you are receiving a "realistic" view of things.  Being real is not the same as being negative.  It is just understanding exactly what you are stepping into and making sure you understand any risks and threats and how to mitigate them.  Sugar coating things is a sure recipe for financial loss imho.

    The main thing to do is what you are doing - educating yourself and understanding the risks and asking questions to gain understanding of the best way to move forwards.

    Join a Landlord Association for support and advice and to make sure you add to the voice of landlords at a political level.

    You are actually the landlord of the future and you can play your part in effecting change.  I welcome you to being a landlord and living your best landlord life by being professional and adapting to changes, because more are coming!

    ​If you need a boost, have a read of this thread:

    9 irrefutable reasons why property is still a viable investment + Landlord Survival

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    Thanks Vanessa, it was "looking for opportunity in the change" that I was after.  The "Great Debate" and Richard Blanco's earlier presentation was very sobering - those opportunities don't yet seem to abound?. 

    I guess the "LTV 75% leverage" argument needs a revision. The standard "£100k in the stock market vs 4x£25k down on 4x £100k property properties and when the tide rises by 10% the Investor has gained £10k vs the BTL who has gained £40k" pitch is no longer relevant.  Many of the more established (no ulterior motive) advisors are talking about LTV of 65% even 50% (some even cash!) for the next season. 

    This makes BTL less compelling UNLESS there is a secret recipe to finding BMV and very high yield properties that are returning 8-10% net!  I am not hearing/reading LL talking about those kinds of yields.

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    Have a look at this interview as it covers this topic:



    See also - Growing a property portfolio - resources 

    Things have definitely become more challenging for landlords, but people will always need a roof over their head and social housing and build to rent are not meeting the demand.

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    With the greatest Respect your interviewing a Lender

    and how do Lenders make money

    BUY LENDING MONEY

    so they are making money ?????

    Just because a Lender is pushing its products doesn't mean its right to do Today or Tomorrow.

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    With the greatest respect:

    1.  It's just another opinion to add to the knowledge bank. If a viewer finds it helpful - great.  If not - no problem.

    2.  For lenders to lend, there has to be profit in the project otherwise they will fail. Therefore, they will only lend to projects that they believe will result in a successful outcome.  So in that respect, they are good people to ask about trends of lending and financing and what is working in the current market conditions.

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    Its a lender some one who makes money from Landlords borrowing Money

    Turkeys don't vote for Xmas

    Although  I think lenders are our only friends we have to realise they do it for profit

    all there fees are higher now Valuation fees are double what they were

    Arrangement fees are higher

    They don't offer there services for nothing so they will give an opinion that is skewed because they want our business

    They are just like any other one selling a service or a product its profit driven

    maybe you should have interviewed the Landlord who the lender was supporting for an over view of the development

    That would have been worth listening too.

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    That's far better Fairy Godmother  x

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    That's a really good Vid

    He hit the nail on the head Build to Rent

    is the way to go

    I would imagine this Landlords is in a company formation ?

    I have done a few things like this and I found it always went over Budget and was very time consuming

    Personally I see opportunity buying land and building 3 bed tce houses is much easier

    and families stay long term which is good for cash flow

    It would be great to see the final job and some idler of the yield that was archived on this project


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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    You are late to the party but dont worry its an all nighter

    BTL is not dead.. .It started at 6 pm and now its 11pm so the night is yet young

    The lightweights are getting a bit tired yes and some are drifting off to bed

    But more keen young clubbers will join when the pubs turn out

    They have staying power

    One of my more negative  mates said to me once........ .

    There is no point really in starting any business these days -  as every business has been started already

    Wow what a downbeat view on life i thought

    BTL got underway in earnest in 1996

    My first investment  property was however bought in 1982

    One of my client investors completes on his 7th property this  Thursday . Its  2018

     He plans to buy another next year and the year after to get to his target 20

    Join the party now

    Someone like you will ask the same question in 2028 2038 and 2048

    Copy this post and In 2028  say to them  . I`ve got 10 now -  best thing I did

    Yes it was tough you will say and the  class of  1998 and the class of 2008 had it easy but I`ve still done well

    Get stuck in

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    Jonathan Clarke. http://www.buytoletmk.com