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SarahBell

Blt Sums And Lha

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BTL morgages are about up to 60% LTV

fees of about 2-5k on various ones

LHA = max 400 a week. so property income is max £20800

If they want rent to cover 125% of the mortgage then what is the biggest mortgage you can get on a BTL

So mortgage can only be

20800/125x100

=16640 a year or 1386.67 a month

So how much property can you buy this that?

using bbc calculator 25years at 5% apr

a mortgage of £ 230000 costs 1359.92 a month

but you can only borrow 60% so you have to find (40% of 230) 92k

So BTL won't be buying anything over 230k anymore and will have to have big pockets.

Does that make sense?

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BTL will ALWAYS be with you....forever......get over it ....please analyse pensions and get back to us what provides a good income stream :)

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BTL will ALWAYS be with you....forever......get over it ....please analyse pensions and get back to us what provides a good income stream :)

So it's a pension you want don't want to be running around working on it. So you have to use a letting management company. Take that off your revenue stream. What about when tenant stops paying? No more pension for a while.

BTL will always be here. But it will be very different to the last 10 years.

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BTL morgages are about up to 60% LTV

fees of about 2-5k on various ones

LHA = max 400 a week. so property income is max £20800

If they want rent to cover 125% of the mortgage then what is the biggest mortgage you can get on a BTL

So mortgage can only be

20800/125x100

=16640 a year or 1386.67 a month

So how much property can you buy this that?

using bbc calculator 25years at 5% apr

a mortgage of £ 230000 costs 1359.92 a month

but you can only borrow 60% so you have to find (40% of 230) 92k

So BTL won't be buying anything over 230k anymore and will have to have big pockets.

Does that make sense?

I appreciate your sentiments, but i think you've made an error with your working.

£230k = 60% of ceiling price for a btl.

On the flip side, the btl'er has to find £153k deposit.

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mmm BLT....

With the prospect of house prices sliding as well, I would definitely say BTL is dead to new entrants that require the max. available mortgage (or anywhere near it).

Edit to add: Just seen CM's post and I missed that too (D'oh), however it still shows that BTL does not add up as an investment if you require a reasonably large mortgage. New London BTLers will be struggling...

BTL morgages are about up to 60% LTV

fees of about 2-5k on various ones

LHA = max 400 a week. so property income is max £20800

If they want rent to cover 125% of the mortgage then what is the biggest mortgage you can get on a BTL

So mortgage can only be

20800/125x100

=16640 a year or 1386.67 a month

So how much property can you buy this that?

using bbc calculator 25years at 5% apr

a mortgage of £ 230000 costs 1359.92 a month

but you can only borrow 60% so you have to find (40% of 230) 92k

So BTL won't be buying anything over 230k anymore and will have to have big pockets.

Does that make sense?

Edited by Bubble&Squeak

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So it's a pension you want don't want to be running around working on it. So you have to use a letting management company. Take that off your revenue stream. What about when tenant stops paying? No more pension for a while.

BTL will always be here. But it will be very different to the last 10 years.

Wait until they start taxing it.

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If you have a huge wad of cash just burning a hole in your pocket ? Then yes I can see BTL as a decent idea to just buy - pay an agent to deal with, and just accept the income. Some years up, some years down. Whatever. And having no mortgage on the back of it you can afford to undercut others if times get a bit tougher.

BTL with a large mortgage ? Mental. IMO.

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BTL morgages are about up to 60% LTV

fees of about 2-5k on various ones

=16640 a year or 1386.67 a month

So how much property can you buy this that?

using bbc calculator 25years at 5% apr

a mortgage of £ 230000 costs 1359.92 a month

but you can only borrow 60% so you have to find (40% of 230) 92k

So BTL won't be buying anything over 230k anymore and will have to have big pockets.

Does that make sense?

There is an O Level Maths problem with your workings. But still, it's along the right thinking, so I'll give you an A grade GCSE just in case you feel upset.

I think that the likelihood is interest only mortgages even for BTL will be outlawed as indicated by the FSA. If so, it makes the current model of BTL extinct. A huge fall in prices will be needed before it will once again stack up. Anyone who got into BTL after 2002 will be likely to have problems soon. As property prices fall rents will follow.

I suggest that a reasonable way forward would be to have max 70% LTV BTL repayment only mortgages, with a rent requirement of 1.3 x mortgage payments. That will stop all amateur BTL who just wanted an ATM remortgage machine, because you will need to take a 20 year view of it.

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If you have a huge wad of cash just burning a hole in your pocket ? Then yes I can see BTL as a decent idea to just buy - pay an agent to deal with, and just accept the income. Some years up, some years down. Whatever. And having no mortgage on the back of it you can afford to undercut others if times get a bit tougher.

BTL with a large mortgage ? Mental. IMO.

I am seeing a variation of this effect in CRE in the US.

Empty stores in malls create a very negative impression for prospective tenants. The operaters with very low leverage are able to offer space at very low prices to keep occupancy up to attract more tenants. Leveraged operators cannot afford to match them on price as they still have to service debt so tenants are naturally migrating to malls owned by less leveraged operators making things even worse for more leveraged operators.

Permanent wealth is slowly being transferred to the cautious for the first time in over a decade.

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If you have a huge wad of cash just burning a hole in your pocket ? Then yes I can see BTL as a decent idea to just buy - pay an agent to deal with, and just accept the income. Some years up, some years down. Whatever. And having no mortgage on the back of it you can afford to undercut others if times get a bit tougher.

BTL with a large mortgage ? Mental. IMO.

Yup. Big difference between 'borrow to let' and 'buy to let'.

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I am seeing a variation of this effect in CRE in the US.

Empty stores in malls create a very negative impression for prospective tenants. The operaters with very low leverage are able to offer space at very low prices to keep occupancy up to attract more tenants. Leveraged operators cannot afford to match them on price as they still have to service debt so tenants are naturally migrating to malls owned by less leveraged operators making things even worse for more leveraged operators.

Permanent wealth is slowly being transferred to the cautious for the first time in over a decade.

Well I am going to jump right in as quickly as I can and get some of that wealth transfer.

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Well I am going to jump right in as quickly as I can and get some of that wealth transfer.

Having cash and financing capacity is the transfer mechanism.

It is way too early to use up the resource.

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I appreciate your sentiments, but i think you've made an error with your working.

£230k = 60% of ceiling price for a btl.

On the flip side, the btl'er has to find £153k deposit.

Ah ok...

gosh I really did write blt didn't I. Whooops. :)

so what's the yield either way?

I was just trying (and perhaps failing) to gauge what price bracket BTL would have to stay within..

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There is an O Level Maths problem with your workings. But still, it's along the right thinking, so I'll give you an A grade GCSE just in case you feel upset.

Oo ta :)

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If you have a huge wad of cash just burning a hole in your pocket ? Then yes I can see BTL as a decent idea to just buy - pay an agent to deal with, and just accept the income. Some years up, some years down. Whatever. And having no mortgage on the back of it you can afford to undercut others if times get a bit tougher.

BTL with a large mortgage ? Mental. IMO.

Yes 'Buy to Let' is one idea. 'Borrow to Let' is quite another and it has done unmeasurable damage to society. The game will be up for overleveraged morons whe IR's go up the repayments will wipe them out whilst those who actually did 'Buy to Let' will be sitting pretty.

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  • 142 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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