Wednesday, 19 December 2007

Buy-to-let investors in trouble

These days, there is a blog for any ailment, even for buy-to-let investments gone bad. Take a look at this sorry tale from America. Here we have a couple who have lost $700,000 from the property market. Now I am waiting for the UK version of this story, written up in a blog.

Talking of the US housing market, recent data is just unbelievably bad. According to the US Commerce Department, housing starts dropped by about 4 percent in November compared to October while permits for future construction slid to a 14-year low.

1 comment:

Budvar said...

I remember watching something on TV about 2 years ago called something like "How I became a property millionaire".

This particular episode featured an oldish couple (she was a retired teacher) from somewhere like Wiltshire.
The thing that stuck in my mind was they got started by using the equity in their paid off house to buy rental houses, then they used the equity in these to buy further houses etc and doing this they'd amassed a multi-million pound property portfolio. All well and good you'd think, but later in the programme, it turned out they didn't own a dime as all these properties were bought with interest only mortgages, and their whole portfolio was based on the paper gain of price appreciation.

They were asked "What happens if prices stop rising or even god forbid they start falling?" His reply was "There's only one that property prices are going, and thats up" waving his index finger in a skyward direction.

I'd love to be a fly on the wall in that household round about now!!