I don't think BTL landlords have overall effect on property prices. They reduce the supply of property for sale but increase the supply of property for rent. The result is declining rental yields, which is quite right and proper, because rental yields have been artificial high for decades.
In fact, many landlords aren't "making a profit", because the rent is only sufficient to service their mortgage debts. They are relying on capital growth to get a return on their investment. If house prices continue to rise at 10% a year, then they'll be rolling in it (particularly bearing in mind the degree of leverage commonly involved). However, although I lack any sort of expertise in the housing market, I think it fairly obvious that prices can't continue to grow at that rate for ever.
I do think that the significant capital inflows are an important reason why house prices are rising so dramatically (particulary in London). Everybody buys the best house they can afford, so if the top tranche are taken out by Russians, the price goes up all the way down the ladder. I think that the fashion for BTL is an effect, rather than the principal cause, of the housing boom, although it undoubtedly helps to sustain it.
no subject
In fact, many landlords aren't "making a profit", because the rent is only sufficient to service their mortgage debts. They are relying on capital growth to get a return on their investment. If house prices continue to rise at 10% a year, then they'll be rolling in it (particularly bearing in mind the degree of leverage commonly involved). However, although I lack any sort of expertise in the housing market, I think it fairly obvious that prices can't continue to grow at that rate for ever.
I do think that the significant capital inflows are an important reason why house prices are rising so dramatically (particulary in London). Everybody buys the best house they can afford, so if the top tranche are taken out by Russians, the price goes up all the way down the ladder. I think that the fashion for BTL is an effect, rather than the principal cause, of the housing boom, although it undoubtedly helps to sustain it.