Over 750,000 BTL properties empty, set to increase to 1 million

[Indy500]

http://www.telegraph.co.uk/finance/...buy-to-let-properties-are-standing-empty.html

The EHA claims that there are more than 762,000 empty residential properties in England as of mid 2007. Based on earlier figures, about 650,000 of these are believed to be owned by private landlords, and almost half of these are thought to have been empty for more than six months. The charity estimates that there are at least another 77,000 empty residential properties in Scotland, plus 50,000 each in Wales and Northern Ireland.

Mr Ireland predicts that the total number will pass 1m in the next year. "The situation is getting worse," he says. "Even these figures were compiled in October 2007, before the property downturn led to a rise in repossessions. We're at the beginning of a trend of rising empty homes, which is what we have seen at the beginning of other recessions."

The National Landlords Association (NLA) questions how many owners of empty homes are "true" landlords. "There is a difference between empty properties owned by landlords and those owned by speculators," says Elizabeth Brogan of the NLA. "Genuine landlords want a property occupied. It costs money to keep it empty. Most homes are only empty for a short while, and there is usually a valid reason. It could be between tenants, for example."

One wonders how many actual landlords would leave properties empty like this. I suspect the property boom was aided by speculators buying a large number of these...

 

[Greebo]

I saw a documentary a about 6 months back (pre credit crunch) on tv which claimed that 1m properties were empty.

There were things like expensive million pound apartments owned by the government but empty cause nobody that high up needed to live in one to council owned estates mark for demolition and hence empty but have now been empty for over 5 years and since the council has no money to build new ones (they admitted it is unlikely that they will be demolished within the next 10 years) they remain empty but 1000 of families are homeless and living in B&B.

The argument goes if the council puts them in the houses, when they finally get round to demolition, they won;t be able to evict them and the council would have to wait until alternative accomodation comes along.

There where also derilect houses in need of renovation where the "landlord" had bought for a song but has no intent to do that for some years.

So as the article said, its not really a true figure of "buy to let" properties, just a count of empty houses.

Of course some properties really are going to be genuine rental properties where the landlord wants somebody to live in it.

 

[Wicksta]

What a misleading thread title.

 

[aardvark]

there have always been about 750,000 properties empty at any one time - its a well known fact, and has been true for years.

 

[Kitchster_uk]

It is easy enough to let out a property regardless of the economic situation as you can reduce the rent and still make more money than it sitting empty, BTL landlords who rely on income wouldn't allow stuff to sit empty like that tbh.

You also have to factor in the dead people who leave a property - our house was empty for 2 years as the owner moved into her late mother's bungalow and was in no hurry to sell.

 

[JAzz]

The rental market is actually quite good right now for Landlords, huge demand as nobody is interested in buying and rents have gone up a fair bit in the last year or so.

 

[Haircut]

The rental market is actually quite good right now for Landlords, huge demand as nobody is interested in buying and rents have gone up a fair bit in the last year or so.

From what I've seen rents are at best static at moment, around here anyway.
There has actually been a larger increase in people putting their places up for rent (as they have been unable to sell) than there has been in the number of tenants.

Just had a look and there is a flat up for rent at £25pcm more than one I looked at in the same block over 6 years ago.

 

[aardvark]

The rental market is actually quite good right now for Landlords, huge demand as nobody is interested in buying and rents have gone up a fair bit in the last year or so.

not true - rents are static, some are even falling.

 

[kibblerok]

The rental market is actually quite good right now for Landlords, huge demand as nobody is interested in buying and rents have gone up a fair bit in the last year or so.

must be area dependant.... my landlord doesn't expect to rent out our house for a good year or so and has another few sat empty (with attractive rent)

 

[wassap]

My area (Dudley) is pretty good for rentals, my flats generally get taken up pretty quickly when they become empty.

My friend how ever, has struggled to let hers in Sandhurst, she tried to sell initially and now has gone the rental route, It seems as if the rent levels are starting to equalise in the higher end areas.

 

[JAzz]

not true - rents are static, some are even falling.

In the area I am based in they have shot up, for example a decent town centre 2 bed flat were going at around 800-850 whereas now they are going for around £900-£950. This hasn't been a gradual rise either just recently gone up within the year and the estate agents I have talked to recently are saying the same.

I'm talking about the Hounslow/Ealing area.

 

[memyselfandi]

I don't think in my road the people who are renting are sure what to charge ... there are currently three identical three-bed semi's, all with roughly the same size garden and a garage on the market and they vary in rental from £525 to £650/month

At least two of them I know have been empty for two months (as one is next door to me) ...

 

[Mad old tory]

soon to be a million....GOOD and I hope they stay empty for years to come.

A large proportion of the current credit crisis is down to the rise in BTL mortgage craze both here the US which many people saw a quick way to make a huge profit as the property price bubble meant that even if they didn't fully cover the cost of the mortgage as property prices where rising at silly rates, they still stood to make a profit if/when they choose to sell to the detriment to those trying to get on the property ladder as this pertetuated the price boom in a vicious circle....now thankfully broken.

They've had their cake, now they can suffer for all I care

ps I do own my own home already so I'm not one of those to suffer directly as their speculation.

Errm it might have contributed slightly, but subprime was the overriding cause of the current crisis not the BTL craze.

 

[K.C. Leblanc]

Lets hope this brings rents down.

Any forums members with properties in Gloucestershire care to comment on the state of the market?

 

[The Mad Rapper]

The rental market is actually quite good right now for Landlords, huge demand as nobody is interested in buying and rents have gone up a fair bit in the last year or so.

Wrong!

The rental market is woeful at the moment. It is flooded with properties that people have been unable to sell. Prospective tenants are able to negotiate as much as one third off the rent - hardly the sign of a healthy rental market!

 

[The Mad Rapper]

Errm it might have contributed slightly, but subprime was the overriding cause of the current crisis not the BTL craze.

I'm not sure that's entirely correct. Many BTL investors are highly leveraged and took 95% or 100% loans, which are, really, sub-prime. I don't believe you can say that sub-prime is the 'over-riding cause' of this crisis. I believe it to be the pure greed of the banks. Creating exotic financial instruments to allow them to take lending off their books in order to comply with the Basel II guidelines. The distribution of risk by these companies to other companies who couldn't possibly bail them out in a million years didn't help. Last November for example, I read about a US insurer who provided insurance for many of these complicated instruments. Their total liabilities ran to $Trillions, yet they had assets of only $150 million - absolutely bonkers! I believe they have since gone under as well, funnily enough.

So it's greed you see that's the real cause. Bankers looking for bonuses, businesses taking too much risk, analysts not carrying out due diligence etc. etc.

I'd take a look at the latest figures for repossessions, then watch that grow over the next 6 months. Some of that will be genuine homeowners who have either been made redundant or didn't do their sums correctly and have now suffered, the remainder will be cowboy BTL fools.

I personally hate BTL and hate the idea of BTL. If you take investment out of the equation then I do not believe prices would have risen to the extent they did in such a short time span. Legitimate FTBs would not have been priced out to the extent they have.

A whole generation of people have now grown up only ever having known prices to rise. The mental link between property and profit needs to be broken for good IMHO.

 

[cheets64]

I worked with a Indian lad he is 28 has 3 BTL properties and 2 are empty and he has to cover £900 mortgage payments, its crazy, he works full time and he said its really stressful now and worrying, he bought them about 3 years ago so they will be in negative equity.

Just crazy how so many people thought house prices where always going to boom and all it took was a rise in living costs to show how much people had become dependent on the price of there house and there mortgage.

 

[JAzz]

Wrong!

The rental market is woeful at the moment. It is flooded with properties that people have been unable to sell. Prospective tenants are able to negotiate as much as one third off the rent - hardly the sign of a healthy rental market!

No it isn't wrong, I've got a few BTL properties and the demand is huge around my area and like I've said rent amounts have gone up a fair bit in the last year. It might be poor in other areas but certainly not poor in mine.

I worked with a Indian lad he is 28 has 3 BTL properties and 2 are empty and he has to cover £900 mortgage payments, its crazy, he works full time and he said its really stressful now and worrying, he bought them about 3 years ago so they will be in negative equity.

Just crazy how so many people thought house prices where always going to boom and all it took was a rise in living costs to show how much people had become dependent on the price of there house and there mortgage.

What kind of rents was he expecting on those properties? A major problem in the BTL market is as you said so many people leveraging themselves so highly and just relying on the house/flat price going up and leaving no breathing space. Then you have those who did have breathing space and spent all that money they made out of it! Always save and have some spare money for a rainy day is what my parents taught me and right now it is pouring down!

 

[Slam62]

No it isn't wrong, I've got a few BTL properties and the demand is huge around my area and like I've said rent amounts have gone up a fair bit in the last year. It might be poor in other areas but certainly not poor in mine.

so you are making more money in profit from the rent than the houses are dropping in value then?
If not, you've had it and better sell up.