This ^^ is all poorly informed bollocks.
When ‘investments’ like BTL become fashionable amongst the general public and gain an aura of ‘you can’t lose’, it’s usually the time the wise get out…
The general public became fully aware of BTL in about 2004 (or earlier). So it’s been too late by that mantra for a long time. In actual fact there are lots of niches where BTL still works well. As has always been the case.
It pays to study and understand your local market.
All those people who have used a BTL as a pension will be selling at some point in order to realise the cash they’re going to live off:
a) they’re assuming house prices will continue to rise until that point
b) they’re assuming they won’t be selling in the middle of a bust
c) they’re assuming government can continue to boost the market – if governments were that in control of the market, why did they let the 2008 bust happen?
Or not, as in reality keeping the BTL to live off the income is the reason you have it as a pension, only a few idiots buy BTLs expecting a value increase over a rental income. If you sell the BTL you need a good stable returning investment vehicle to create an income, errr that would be the BTL you just sold. I know lots of V old pensioner landlords whose kids are helping mum and dad manage their props to provide them with a decent retirement income.
So not many btl’s will get put on the market, not many btl owners will be affected by any nebulous price drop, and the last statement about the govt controlling the market, but not controlling the market is as ludicrous as it is self contradictory.
BTL will be interesting when the eventual house price crash comes which it will at some point (if it’s not already started in London – yields are on the floor and even vested interest estate agents are forecasting a stagnant market/price drops).
If prices drop and yields are so low that there’s no ‘business’ model then it’s highly likely you’ll see a load of BTLs being sold in a panic – which will change the balance of supply and demand and you’ll see more drops and away we go…
Aside from not knowing what makes you think you can predict the market, the effect of any price drop in purchase values may not have the effect you think.
For starters if BTLers get out then its likely lots of residential buyers will step in, which could drive a price boom. Secondly most BTLers are in it for the long term and actual house value is irrelevant if they bought before any price fluctuation they will not sell just because of declining asset value.
Rents tend to be much more stable than house prices, they lag behind house price increases, and generally hold when there are falls.
