Can you believe it?  I can! 

All that has happened to buy to let with the negative press, mortgage products being withdrawn and property prices fallen, buy to let mortgages are being taken out like no other.

                      

Now lets be clear.  The absolute number of buy to let mortgages taken out is low but as a ratio of buy to let mortgage against residential mortgage the ratio is higher.

This is because the first time buyer is out of the market.  They would not know a bargain if it hit them in the face!  The reasons why is because they will think the property price will be lower the next day.  So offer a first time buyer a property in their chosen area, chosen size, chosen decoration AND at their chosen price and they will still back out as the price (as they envisage) will be cheaper tomorrow.

I do not blame the first time buyer to think this way.  They are not in the property game.  They do not know what yield is, return on capital, LHA rates, future growth, demand for housing or anything else to do with property investment. All they want is a house to live in!

So all we have is the investor and the forced buyer i.e. a relocation employee who is forced to move due to their job constraints, divorce, health etc.

So investors buying comes as no surprise to me.  It is bargain city out there.  It may not last long but there are more properties than buyers ? PERFECT!

Let me quote you what the richest man in the world, Warren Buffet, said:

"We simply attempt to be fearful when others are greedy and to be
greedy only when others are fearful."

I think landlords are getting greedy. 

Ajay

Posted on: 20th Oct 2008