RE Syndicates Face "Dangerous Wobble" In UK
The English syndicates, which are clubs or groups of RE investors, are mainly into rental units. These organizations may be about to give us a taste of panic selling. "Fears of a collapse in the price of new flats have created the risk of a 'dangerous wobble' in the buy-to-let market. The average price of a new flat has fallen 17.2% across the country in the past 12 months."
"Syndicates have been buying huge numbers of new flats in the past two years. It is claimed that as many as one in four of those built in 2004 were sold to such property clubs."
"A recent survey claimed as many as 250,000 homeowners have remortgaged in the past two years to buy rental property or join a syndicate. A study by the Council of Mortgage Lenders said 20% of buy-to-let landlords derived a significant amount of their income from their portfolio. For 11% it was their main income."
"One operation, Practical Property Portfolio, was wound up last year, leaving thousands of members an estimated £100m out of pocket in total."