Sunday, Sep 23, 2007
'Toxic' Buy-to-Lose
Mail: New-build buy-to-let warning
Potentially disastrous, and possibly fraudulent, buy-to-let borrowing exists on an unknown scale in the books of mortgage banks, according to surveyors and lenders. Most of this 'toxic' buy-to-let lending is on new-build flats in regional cities where values are tumbling and tenants scarce. Lenders' main fears concern cases where property prices, against which loans were advanced, were inflated by the developer.
Posted by confused76 @ 11:50 AM (705 views) Add Comment
5 Comments
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1. confused76 said...
Scroll through the articles on btl, in reverse chronological order
Up to a week ago it was "property millionaires" now all of a sudden "buy to lose"
things are precipitating after NR!
http://www.thisismoney.co.uk/buytolet
2. Cheekie Charlie said...
"regional cities where values are tumbling and tenants scarce."
but it's all about suply and demand.
3. enuii said...
This article just about sums up Warrington in a nut-shell, a grotty trumped up little town between Liverpool and Manchester where the scale of new-build appartment building is nothing short of scandalous, quote 'Most of this 'toxic' buy-to-let lending is on new-build flats in regional cities where values are tumbling and tenants scarce.'
4. Dude said...
So the police are investigating scams by syndicates. Does this mean we will see a rise in legal cases? 'Not my fault, guv. I've obviously been sold a pup -- and I want my money back.'
That's going to bugger up the TV adverts for the next couple of years. First we had, 'were you mis-sold an endowment,' then it was 'consolidate your loans with us;' soon it will be 'conned into buying a BTL? Let us help take some more money off you. Call 0870...'
As I've said before, the British people are intrinsically greedy, and want to make lots of money by doing no work -- they can't even be bothered to properly research the BTL market.
This is my equation of the week:
greed + stupidity = BTL
5. Monty032 said...
This applies to new-build BTL houses as well as flats. I found out from the Land Registry that my landlord (whom I have never met) paid £297,500 for my house, a three-storey terrace a long walk from the centre of Durham. I heard that BTL landlords on this development get 10% cash back at the end of the first and second years from Barratts. I wonder whether the mortgage company was aware that the true value of the house is £238,000, not £297,500. Even taking this 20% cashback into account, my £675 a month in rent and the letting agency's cut of say 13% mean that he is getting a rental yield of exactly 3%, before renovations and void periods. Houses that go up for sale here just stay for sale for months. They maybe get a couple of viewings if they reduce the asking price by £50,000, as they have just done with the house opposite (unsold for over a year now). This, to put it mildly, is not a stable situation.