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House Price Crash Forum


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Everything posted by Neverwhere

  1. Nice to see some of the landlords making the same point!
  2. I can imagine, but it sounds like you did all of the right things and have every reason to be proud. It's astounding that it got as far as it did. The bureaucracy of it, with the not-quite-right name and the withholding of the original judgment, is especially bizarre.
  3. Congratulations, and sorry that you had to go through the stress of all that to get to this point.
  4. That's pretty dire but I guess it also explains a lot.
  5. This may well be true. It would be nice if we got a long-term real world experiment in the matter to check
  6. I would be surprised if it was, given the consolidation clause in MX BTL loans, although perhaps they are disposing of everything that isn't being held by UKAR.
  7. Is that something they've started putting about, or something that other people have noticed from watching local auctions?
  8. What I wonder is what happens when large portfolio landlords like Fergus pass on with their portfolios still intact? Presumably tax bills will necessitate the sale of at least a few of the properties, but then refinancing difficulties (especially now that there are regulatory rules around lending to portfolio landlords, and tax and interest rate requirements that were not in place when the properties were originally financed, but also considering that the inheritor may not meet relevant lending requirements as an individual) could also see for the rest. I think the tenanted sales platform flop over at PovertyLater demonstrates that there is not a significant amount of demand for already tenanted properties, so these kinds of cases could wind up with large numbers of properties being made vacant for sale at the same time. Where the portfolio is geographically concentrated they could end up flooding the local market.
  9. I'm in the SE so that's probably biasing my perceptions a bit. I'd hope that real terms falls would at least be perceived as failing to make a worthwhile amount of money (where the full size of the property isn't actually being put to any practical use)?
  10. I'm sorry for your loss. You make a reasonable point, although I think that once we broaden out the simplified scenario above to include probate we'd also have to take into consideration how long stock is taken out of use when private rental portfolios are inherited and disposed of (e.g. because of multiple inheritors or inability of inheritors to refinance on the same terms). The other thing which I'd add to the general discussion about occupation rates is that under-occupation in owner occupied housing seems likely to be linked to the perception of housing as an attractive asset or investment. With lower house prices, and especially without the expectation of continual house price growth, there would be fewer incentives to hold onto houses with unused and otherwise unwanted rooms (that may actually be proving an increasing burden to maintain and clean) so if a decrease in demand from landlords translated into lower prices, and lower expectations for the future path of prices, then that might also lead to a decrease in demand for under-occupation of housing by owner occupiers?
  11. I'm not sure on the relative occupancy rates but Bentley does address this to a degree under his tweet above (or rather refutes the opposite argument): Anyone who can afford to buy a house to themselves can afford to rent a house to themselves. In that case it makes absolutely no difference to occupation rates (though it may make a great deal of difference to their quality of life) whether the house is owned by them or by a landlord. It makes sense that increased household formation added on top of this could mean that housing consumption actually decreases. Given the relative difference in purchasing power, due to the looser lending available to BTL landlords, I'd also think it was more likely for renters to reduce their level of housing consumption (say from a house to a flat) when making the move into owner occupation, even when they are not also combining households with a partner. Voids are also interesting in another way, in that the rolling stock of currently void rental properties means that there are effectively less properties in use over all, so moving those properties into owner occupation actually increases the stock of housing in use. (Say - as an entirely made up example - if 1 in every 20 rental properties is void at any given point in time, that means that only 19 of those properties are ever in use as housing at any given point in time. Move them all over into owner occupation and you suddenly have 20 properties in use for housing where previously you only had 19.)
  12. Nice to see the Bank getting on-board with with some long-standing HPC thinking
  13. On the subject of the general cultural bias at the BBC on housing and BTL, the new Economics Editor, starting - I think - later this month, had a very good chapter on BTL in his book The Default Line, so we might see a bit of better coverage on this in the future.
  14. I reckon that as the policy changes around BTL prevent sentiment from driving speculation beyond a certain price point, (and that price point is likely below where we are now given the tax burden on BTL properties is still increasing), so any pro-HPI element of a story about a post-2001 BTL boom has been largely rendered toothless at this point. What then remains - and is actually helpful for a HPC - is the human interest element, which drives political sentiment about the negative impact of BTL on would be homeowners and especially younger voters. I think this is a genuinely "unintended consequence" of phasing in the BTL tax changes over several years: the government thought they were being very clever and slowly letting the steam out of the market without precipitating an out-and-out crash, but by tackling the problem so slowly they've created a situation where there is still an increasing amount of pressure for further policy measures against BTL before the last ones are anywhere close to working their way through the system.
  15. Bearing in mind that there is a significant lag in these figures, as of March 2018 the PRS regained a little (less than a quarter) of its 2016/17 losses, and expansion of owner occupation continued on apace: Dwelling stock estimates: 2018, England
  16. Looks like had to: It seems that whatever those loans are they now have the same risk-weight as commercial real estate (i.e. 100%) in which case it would make sense if they were Ltd BTL (as above) but there could be alternative explanations?
  17. Potentially quite a few who can afford to do neither, i.e. can't sell at a price that would cover their outstanding debts and tax obligations, and don't have the additional cash to lower their LTV or pay a higher rate of interest.
  18. It's the move in the risk weights (from 35%, which IIRC would be the correct RW for a residential BTL loan to a private individual, up to 100%) and the withdrawal of the limited company products that makes me think they priced up a load of limited company BTL loans as if they were standard BTL loans to individuals (probably marvelling at how much smarter they were than everybody else who wasn't expanding into this area of lending ) and have since found out that - shockingly - they weren't actually as profitable as they supposed. As you say, idiots all the way down.
  19. AIUI they mean BTL loans to limited companies. (Their error being that they risk weighted them as if they were BTL loans to private individuals.) Exactly this. They seem to have already withdrawn their limited company BTL products in the wake of the error because it turns out they just weren't profitable when risk weighted correctly: Doesn't exactly bode well for any BTLers trying, foolishly, to escape the tax changes via transfer into a limited company structure
  20. I'm not sure that a situation would arise where lenders have the same seniority on the same property, but otherwise I'd say broadly yes, in practice the ones who get in first have first dabs. The link on Bland's Portfolio Landlord Endgame thread has been archived but it states that in the event of bankruptcy the CGT bill becomes the first charge: To me that suggests that the order of seniority for each individual property of a bankrupt landlord would be: Capital Gains Tax to HMRC Repayment of debts to the primary lender (who without the bankruptcy would have a first charge on the property) Repayment of debts to any secondary lender (who without the bankruptcy would have a second charge on the property) All other outstanding tax due to HMRC in relation to that property (e.g. unpaid income tax) Payment towards any shortfall on other properties or debts accrued by that landlord So if the basic information in the archived HMRC webpage remains true then there is a significant benefit to the lender in getting in ahead of any bankruptcy and taking possession of any properties they can, because if they do they retain their first charge ahead of HMRC. They also then have the opportunity to take out second charges against any other properties that the landlord may have, and so increase their chances of making up any shortfall, (possibly via forcing more possessions), and place themselves ahead of the queue for repayment before other lenders which have taken longer to act.
  21. "Nobody is in charge. It's a headless blunder operating under the illusion of a master plan."
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