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Btl's Back........


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#1 Joboxer

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Posted 03 April 2012 - 11:23 PM

Just been told by a mortgage advisor that BTL mortgages can be had at 25% deposit, interest only, no salary check. Apparently they are being offered by an offshoot of the Nationwide. They are still not regulated by the FSA. Crazy.

Edited by Joboxer, 03 April 2012 - 11:24 PM.


#2 bland unsight

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Posted 04 April 2012 - 01:16 AM

What are the Nationwide playing at? This does chime with the idea that they've lost the plot, put forward by a whistleblower, here.

The Nationwide's BTL vehicle, The Mortgage Works (UK) Plc, appears to have put an extra 3bn of mortgages on their books between March 2010 and March 2011, taking them from 9bn to 12bn. (Some kind soul has left a free access link to a scanned copy of their March 2011 financial statements lying around on the web.) Presumably the vast majority is BTL as The Mortgage Works are a specialist BTL lender.

UK gross lending was about 150bn for the year to March 2011, if 20% of this was BTL, then gross BTL was about 30bn - so Nationwide are 10% of the BTL market.

The other big player is BM Mortgage Solutions, aka Birmingham Midshires, swallowed by Halifax, then swallowed by Lloyds TSB in that notable shotgun wedding.They are half the BTL lending market these days,according to Mortgage Strategy.

It seems that the biggest players in BTL are a clueless mutual and a zombie. Not sure they are the best people to judge whether it's time to get the checkbook out or not. Good luck to them. I'm not sure either has got the balance sheet to keep this bubble inflated. Presumably Nationwide are going to get their fingers burned and the good people at Lloyds Group are going to find yet another way to pour taxpayers money down the drain.

Given that through UKRAR's NRAM and B&B loan books we already have a sweet 25bn of BTL loans already, it seems that the biggest BTL player is the government, by a country mile.

So it goes.

Edited by ChairmanOfTheBored, 04 April 2012 - 02:59 AM.

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#3 fluffy666

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Posted 04 April 2012 - 07:59 AM

What are the Nationwide playing at? This does chime with the idea that they've lost the plot, put forward by a whistleblower, here.

The Nationwide's BTL vehicle, The Mortgage Works (UK) Plc, appears to have put an extra 3bn of mortgages on their books between March 2010 and March 2011, taking them from 9bn to 12bn. (Some kind soul has left a free access link to a scanned copy of their March 2011 financial statements lying around on the web.) Presumably the vast majority is BTL as The Mortgage Works are a specialist BTL lender.

UK gross lending was about 150bn for the year to March 2011, if 20% of this was BTL, then gross BTL was about 30bn - so Nationwide are 10% of the BTL market.

The other big player is BM Mortgage Solutions, aka Birmingham Midshires, swallowed by Halifax, then swallowed by Lloyds TSB in that notable shotgun wedding.They are half the BTL lending market these days,according to Mortgage Strategy.

It seems that the biggest players in BTL are a clueless mutual and a zombie. Not sure they are the best people to judge whether it's time to get the checkbook out or not. Good luck to them. I'm not sure either has got the balance sheet to keep this bubble inflated. Presumably Nationwide are going to get their fingers burned and the good people at Lloyds Group are going to find yet another way to pour taxpayers money down the drain.

Given that through UKRAR's NRAM and B&B loan books we already have a sweet 25bn of BTL loans already, it seems that the biggest BTL player is the government, by a country mile.

So it goes.


Could be a long term trend..

Ultimately, lending to someone who it into BTL as a business venture - and so may have a few dozen properties with rental coverage at least 130% of mortgage interest - is probably far safer than lending to a few dozen owner-occupiers. After all, evicting an owner occupier is the bank's problem (probably quite costly and drawn out) whereas having a landlord as middleman means that the non-paying tenant gets evicted and replaced with a payer.

Basically, high rents and low IRs make BTL lending seem reasonable. The fact that the whole raison d'etre of building societies is opposed to BTL dosen't seem to ocur to the managers of Nationwide, though..

#4 LiveAndLetBuy

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Posted 04 April 2012 - 10:48 AM

Could be a long term trend..

Ultimately, lending to someone who it into BTL as a business venture - and so may have a few dozen properties with rental coverage at least 130% of mortgage interest - is probably far safer than lending to a few dozen owner-occupiers. After all, evicting an owner occupier is the bank's problem (probably quite costly and drawn out) whereas having a landlord as middleman means that the non-paying tenant gets evicted and replaced with a payer.

Basically, high rents and low IRs make BTL lending seem reasonable. The fact that the whole raison d'etre of building societies is opposed to BTL dosen't seem to ocur to the managers of Nationwide, though..


Yup. I've mentioned this on the site before. When given a choice between lending to a BTL landlord or an FTB, the risk is with the FTB.

#5 Bloo Loo

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Posted 04 April 2012 - 10:53 AM

Yup. I've mentioned this on the site before. When given a choice between lending to a BTL landlord or an FTB, the risk is with the FTB.


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#6 bland unsight

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Posted 04 April 2012 - 11:19 AM

for now.


+1

Accepted that this move from owner-occupiers to renters might be what the board at Nationwide consider a trend, and will allow them to generate some profits for the next three years, provided nothing untoward happens, but doesn't it just make it the same thing again, i.e. banks/quasi-banks ignoring credit risk by assuming that house prices don't go down that much very often. A reasonable assumption under certain conditions, but not so reasonable sitting on top of the mother of all credit bubbles.

Nationwide's assumption must be that a 25% equity cushion is going to be enough to soak up any losses and perhaps more importantly from Nationwide's point of view, they have to do something with the money and all they can do is lend, so they have to lend to someone.

If they are a mutual and they have more reserves than they need to conduct their business, surely there is something better that they could do with the money?
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#7 Si1

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Posted 04 April 2012 - 11:33 AM

+1

Accepted that this move from owner-occupiers to renters might be what the board at Nationwide consider a trend, and will allow them to generate some profits for the next three years, provided nothing untoward happens, but doesn't it just make it the same thing again, i.e. banks/quasi-banks ignoring credit risk by assuming that house prices don't go down that much very often. A reasonable assumption under certain conditions, but not so reasonable sitting on top of the mother of all credit bubbles.

Nationwide's assumption must be that a 25% equity cushion is going to be enough to soak up any losses and perhaps more importantly from Nationwide's point of view, they have to do something with the money and all they can do is lend, so they have to lend to someone.

If they are a mutual and they have more reserves than they need to conduct their business, surely there is something better that they could do with the money?


it's the old hammer / nail thing - their business processes are geared towards mortgage lending, so internal company politics steers them towards mortgage lending

I wonder what happened to YBS / Accord BTL mortgages - are they scaling back? they were really going for it...

however, whereas YBS is in Bradford, Nationwide is in Swindon, I wonder how much their directors sense the housing market pain in the same way northern organisations would?

#8 winkie

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Posted 04 April 2012 - 11:51 AM

What are the Nationwide playing at? This does chime with the idea that they've lost the plot, put forward by a whistleblower, here.


So it goes.



Nationwide, is a shadow of its former self, none of its products are competitive, since they started charging to use cards abroad there is nothing they can offer the customer that would make them want to stay with them...every financial product can be got for better elsewhere....also their products are not simple and easy they have many 'must do that, or this, to get this, or that' attached to them, like a bonus for one year, in the hope you forget so they can then make more out of you.....a mutual where the directors working at the top make and take the money, whilst their customers are only there to help them, while they themselves are growing poorer by banking with nationwide, people can only take so much, then they walk. ;)
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#9 RufflesTheGuineaPig

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Posted 04 April 2012 - 11:52 AM

Just been told by a mortgage advisor that BTL mortgages can be had at 25% deposit, interest only, no salary check. Apparently they are being offered by an offshoot of the Nationwide. They are still not regulated by the FSA. Crazy.


I doubt it's as simple as it sounds. Probably put a charge against other assets held etc.
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#10 Guest_James Toney_*

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Posted 04 April 2012 - 12:00 PM

i want one, where can i get one please, i am starting to thinkBTL is a good idea again :P

#11 LiveAndLetBuy

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Posted 04 April 2012 - 01:59 PM

+1

Accepted that this move from owner-occupiers to renters might be what the board at Nationwide consider a trend, and will allow them to generate some profits for the next three years, provided nothing untoward happens, but doesn't it just make it the same thing again, i.e. banks/quasi-banks ignoring credit risk by assuming that house prices don't go down that much very often. A reasonable assumption under certain conditions, but not so reasonable sitting on top of the mother of all credit bubbles.

Nationwide's assumption must be that a 25% equity cushion is going to be enough to soak up any losses and perhaps more importantly from Nationwide's point of view, they have to do something with the money and all they can do is lend, so they have to lend to someone.

If they are a mutual and they have more reserves than they need to conduct their business, surely there is something better that they could do with the money?


BTL lending allows lenders to prop up house prices and therefore their asset values until monetary inflation eventually works its way into the economy. It's their way of staying solvent until the crisis ends and they can start building up to the next crisis all over again. Rentier capitalism gone mad.

#12 Diver Dan

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Posted 04 April 2012 - 03:34 PM

If they are a mutual and they have more reserves than they need to conduct their business, surely there is something better that they could do with the money?



The last time I checked, Nationwide don't do business banking. My current account is with them and I thought that it might be a good idea for them to have my business account too. But no.

with nationwide, people can only take so much, then they walk. ;)


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#13 Democorruptcy

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Posted 04 April 2012 - 03:42 PM

They could change their name.

Bradfordwide? Nation & Bingley?

Should I remove the 10 I have in my account?

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#14 bland unsight

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Posted 04 April 2012 - 04:03 PM

They could change their name.

Bradfordwide? Nation & Bingley?

Should I remove the 10 I have in my account?


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#15 MrPin

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Posted 04 April 2012 - 07:18 PM

It's back like flared trousers! :o
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