Why don’t more buy to let investors sell their properties?

We did some research with Marie Hunt of CBRE and Brian Lucey of Trinity College on ‘buy to let’ investors looking at their behaviour (in the main it’s a behavioural economics piece).

The findings are really interesting and show a few aspects of our market that may not have been widely known such as:

1. The ‘average’ property investor is no tycoon, rather they own 3 properties or less, taken in practice this could be a person who bought a house then moved into a second one when they got married or such.

2. The ‘fallout’ has been extreme, a huge majority have faced losses of greater than 50%.

3. The younger and older are feeling the pain, most of the investors were between age 35 & 65 when they bought, this is slightly older than the commonly perceived ‘negative equity generation’. And the ones who lost jobs (often younger) have shot up, while there was a five fold increase in the number described as ‘retired’ now. This could mean those ‘property as a pension’ plans are not only not working, but they may result in old age bankruptcy.

4. Half of the sample are not able to service even the interest portion on their loan from the rent received, this demonstrates a latent time bomb in Irish loan books which is going to be difficult to disarm.

There is much more, we hope the research helps to offer more relevant information to the market, the paper is the first of its kind (that we know of!) looking at specifically Irish BTL investors behaviour in the property crash.

One Comment

Leave a Comment to brian lucey (@brianmlucey)

Awesome! You've decided to leave a comment. Please keep in mind that comments are moderated.

*