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Credit crunch 'best thing that could have happened to lettings'

The financial downturn was “probably the best thing that could have happened” to this country’s private rental sector according to lettings industry guru David Lawrenson.

Writing in his latest newsletter he says the collapse of Lehman Brothers, and the subsequent banking crisis and credit crunch that started in 2008, is often seen as a disaster for the world.

But for investors in buy to let, it was exceedingly helpful he says, thanks to interest rates hitting their lowest levels while capital values eventually recovered. 

Lawrenson even describes the restrictions on lending that came in as a result of the crisis as “a fillip” because it temporarily deterred new landlords and therefore limited supply with higher rents as the consequence.

“So if, in 2008, you already had mortgages that backed previous property purchases and especially if those mortgages were on base rate trackers, (as many buy to let loans were), it was very happy days indeed” he claims.

He admits that those not on the property ladder in 2008 and those who wanted to save suffered for much the same reasons as landlord investors prospered but says that every event produces winners and losers and “the credit crunch which started eight years ago was a great thing for landlords with established portfolios.”

Lawrenson insists that landlords in south east England and London in particular have dramatically regained any capital values lost during the downturn. “and the same is true of many other parts of the UK, though to a lesser degree.”

He suggests buy to let industry players should “give a big hug to the clowns on Wall Street and in the City of London who were responsible.”

  • Jon  Tarrey

    Well, if the buy-to-let landlords and investors did alright (better than alright), what else matters? Screw everyone else.

    Can this guy hear himself? What a cretin.

    Self-interest is not an attractive trait. He might have some egg on his face when the changes to mortgage interest tax relief hit. Although, sadly, probably not. Until enough new homes are built, the PRS will continue to swell and lettings gurus like David Lawrenson will continue to rake it in.

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    ................supply with higher rents as the consequenc. Come on Graham Norwood put the spell check on will you.

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    This all may be true and explains why buy to let landlords are being squeezed, and up for a bashing, AKA stamp duty and loss of mortgage interest relief. Too much good no good! I expect they will become less popular than estate agents, unless they have already reached that accolade.

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    As of today the spell check has been used so ignore my message above.

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