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Is Britain sitting on a £200bn buy-to-let time-bomb? Landlords borrow vast sums to fund property empires.

By SIMON WATKINS FOR THE MAIL ON SUNDAY
PUBLISHED: 01:50, 5 July 2015 | UPDATED: 12:34, 6 July 2015.

Joe Kennedy, millionaire investor, businessman and father of the powerful American political family, knew precisely when to run like hell from an ‘investment opportunity’. He famously said: ‘When the shoeshine boys are giving you stock tips, it’s time to sell.’

Right now, there is no hotter topic at Middle England dinner parties or saloon bars than the dreaded buy-to-let conversation. It seems we are suddenly a Monopoly-playing nation divided into two tribes: those who have a gleaming, shimmering BTL property, and those who do not.

HELP TO BUY
Help to Buy boom could leave a generation in negative equity.

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Taxpayer cash pouring into the housing market under the government’s Help to Buy scheme is creating a bubble that risks leaving a generation of homeowners stuck in negative equity, an investigation by The Times has found.

It’s not hard to tell them apart. One group look appallingly smug.

In a world where pensions are being capped or slashed to ribbons and savings return virtually nothing,

They boast happily about their little £200,000 three-bed nest-egg: it’s rocketing in value, they hoot.

It will be collecting rent into their old age to fund their holidays in the Algarve.

And monthly payments on the mortgage they had to raise to buy it are pennies! (As indeed they would be, with interest rates virtually horizontal.)

And facing them, there is the rest of us (yes, me, your City Editor included).

We sink into the soup of our FOMO – Fear Of Missing Out – horribly anxious that we have failed to buy into.

A Sure Thing; and that surely now, as property prices go up faster than our salaries, we are now too late…and forever doomed to be the have-nots living off thin gruel in our 70s and 80s as our wise friends live a glorious retirement high on the hog.

But wait. I’m far from the only one profoundly fearful about the buy-to-let boom.

To the question of what could go wrong with buy-to-let, there is a very simple answer: an awful lot.

And I despair of how much damage may be wreaked both on hundreds of thousands of amateur investors –and our economy as a whole.

 

 

 

 

 

 

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