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v23nb

Do These Numbers Add Up?

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I paid a small (£100) deposit plus £100 reference fee for me and my wife on saturday to secure a rental property costing £1050 per month unfurnished. I then thought to check the Land Registry site yesterday and discovered that the LL bought the property (a BTL from the start) for £382k exactly a year ago. The property was initially advertised for £1250 per month before then being reduced to £1075. I wanted to offer £1000 per month but the wife nagged that she didn't want to miss it so I offered £1050 and it was accepted immediately (place is vacant as previous tenant has gone). I am now wondering if the monthly rental is really viable for the LL and am I setting myself up for a fall as there is too much chance that they are desperate for anything and likely to be imminent repossession candidates. Don't know what terms would have been available for BTL LL's a year ago but do the sums spell doom?

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I paid a small (£100) deposit plus £100 reference fee for me and my wife on saturday to secure a rental property costing £1050 per month unfurnished. I then thought to check the Land Registry site yesterday and discovered that the LL bought the property (a BTL from the start) for £382k exactly a year ago. The property was initially advertised for £1250 per month before then being reduced to £1075. I wanted to offer £1000 per month but the wife nagged that she didn't want to miss it so I offered £1050 and it was accepted immediately (place is vacant as previous tenant has gone). I am now wondering if the monthly rental is really viable for the LL and am I setting myself up for a fall as there is too much chance that they are desperate for anything and likely to be imminent repossession candidates. Don't know what terms would have been available for BTL LL's a year ago but do the sums spell doom?

I don't see how you can ever know?

It was just over a year ago that the maximum loan for a BTL mortgage was reduced to 75% LTV.

Assuming the worst case scenario of 75% mortgage £286500 at a fixed rate of say 5.25% then an interest only payment would be £1253.43. Then again he might have a tracker rate at 1.5 over base so monthly payment on same basis would be £477.50............who knows? He might even have put down a bigger deposit.

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Depends as well on what other income the LL has and how many other properties. My LL has 2 others that I know of plus a home and a holiday home (weekends).

He bought a new BTL at the height of the folly 18 months ago and previously admited to me that one of his other properties had produced no profit in rent.

Do you know where he lives and can check on Landregistry what charges are on his own home?

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Interesting replies, thanks. I had a rough idea that the worst case scenario for a purchase at this price at that time was a loan costing the LL just over £1200 and that was why the original asking price was set where it was. The LL also owns a flat in a popular seaside resort where she currently lives but that has been on the market for a year. She says she may want to move into our rental house in the spring but no sure at the moment so we have agreed on an AST that gives us up until April then periodic after that if she doesn't want it back. I'm fairly sure the LL thinks it's just round the corner that property will be on the way up again.

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