Saturday, Jul 26, 2008
European banks lend to UK landlords - why?!
FT: Rich look abroad for buy-to-let loans
Wealthy buy-to-let property investors are bypassing mainstream UK lenders to take advantage of the more favourable terms provided by some foreign banks. European banks, including Germany’s Kleinwort Benson, Sweden’s Handelsbanken and Switzerland’s EFG Bank, are willing to make multi-million-pound loans, and often at better rates with flexible terms. Some European lenders are offering lower arrangement fees, higher loan-to-values and less stringent rental requirements. “It’s great news for UK borrowers that some foreign banks with strong balance sheets are aggressively competing for high-quality assets,” said a mortgage broker. “They are taking advantage of the highest pricing levels and most conservative lending terms in the UK market for many years.”
5 Comments
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1. drewster said...
Link for those not registered on the FT: FT: Rich look abroad for buy-to-let loans
2. Stevie Dee said...
I tried to use the governments e-petition yesterday to launch a petition to "License Landlords", like the government it didn't work. So can someone put a petition for the licensing of landlords, whether it be multi-dwelling, single flats/apartments/houses, agents, Living-In Landlords. In a country where you have a license for fishing, driving, alcohol, and many more. Nothing can stop a person (a criminal - rapist, etc) rent without being vetted. Great for tax purposes, but also good for the vulnerable (the tenant).
3. Stevie Dee said...
The e-petition proposed will hopefully lead to helping genuine families, single homeowners.
4. Davip said...
Disconcerting -- another route for the cash-rich BTL parasite to bypass the strictures that control the normal borrower and (historically) kept prices stable...
5. quiet guy said...
"Opportunities to pick up cheap property are limited to those with substantial cash reserves, however. Investors are commonly having to stump up deposits of 35 or 40 per cent to ensure their rental income is high enough to meet new restrictions from lenders."
If you've made a pile of cash in the boom years then you may have enough capital to survive a bad slump hence the banks will lend. If you pick a really good area to invest, you might even make money - remember the property price drops are averages. Without more details about the loans it's hard to say whether this is a clever or stupid approach to investing.
"Mortgage brokers said property buyers were preparing to re-enter the housing market as they felt prices did not have too much further to fall."
So could property prices recover next year? I doubt it but at some point we will be tested again when the first dead cat bounce happens. I'm almost looking forward to price rises to see how many trolls turn up on the blog!