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Lloyds Slams Brakes On Btl Mortgage Lending

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http://blogs.telegraph.co.uk/finance/ianmcowie/100007662/lloyds-slams-brakes-on-buy-to-let-mortgages/

Good news - restricting lending, only 2 mill max per landlord instead of 10mill previously. No more MEW allowed for BTL'ers.

Bad News - Lloyds BTL mortgages revert to 2.5% rate so BTL;ers will still be minting the money on a monthly basis on renters expense.

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http://blogs.telegraph.co.uk/finance/ianmcowie/100007662/lloyds-slams-brakes-on-buy-to-let-mortgages/

Good news - restricting lending, only 2 mill max per landlord instead of 10mill previously. No more MEW allowed for BTL'ers.

Bad News - Lloyds BTL mortgages revert to 2.5% rate so BTL;ers will still be minting the money on a monthly basis on renters expense.

"Lloyds Banking Group, which provided 60 per cent of all buy-to-let mortgages last year"

:blink:

Edit: Looks like after the fixed rate period, most BTL loans "revert to Bank of England base rate plus two percentage points". That is cheap. Many won't sell, for quite a few years. Gradual "boiling frogs"?

Edited by Tired of Waiting

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BM Solutions, the biggest buy-to-let lender, reverts to base rate plus 1.99 percentage points; currently 2.49 per cent.

The dead duck paddles on...................

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why are they dropping the limit from 10 to 2 million? is a 10 million pound business more risky than the 2 million one?

and what equity are they looking for?

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why are they dropping the limit from 10 to 2 million? is a 10 million pound business more risky than the 2 million one?...

Yeah, probably, cos with a cap once a landlord gets to £2m, HPI [if and when it happens] will inevitably mean more equity for a given amount of debt.

With no cap HPI in the noughties HPI just led to more debt.

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Yeah, probably, cos with a cap once a landlord gets to £2m, HPI [if and when it happens] will inevitably mean more equity for a given amount of debt.

With no cap HPI in the noughties HPI just led to more debt.

not following you.

the % risk must be the same for either lend volume.....If £10m is bad news, what is it they are afraid of? surely if 10 is bad, 2 is bad. or maybe they think they can spread amongst more landlords...and no MEW....thats bad for the BMVs that loan money to themselves and call it income.

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"Lloyds Banking Group, which provided 60 per cent of all buy-to-let mortgages last year"

:blink:

Edit: Looks like after the fixed rate period, most BTL loans "revert to Bank of England base rate plus two percentage points". That is cheap. Many won't sell, for quite a few years. Gradual "boiling frogs"?

That 2.5% rate is better than the SVR at Nationwide, Halifax and probably most if not all Banks/Building Societies.

I have about 65% equity (35% LTV) in my place and the cheapest I could get when I remortgaged from BOE+3.29% was BOE+2.09%.

It's a little sickening really.

I'd almost be better off BTLing my own place and renting it to myself and claiming the tax on the interest back.

Maybe not legal - but they let anyone borrow any amount not so long back - I doubt HMRC will really check who's renting from whom.

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That 2.5% rate is better than the SVR at Nationwide, Halifax and probably most if not all Banks/Building Societies.

I have about 65% equity (35% LTV) in my place and the cheapest I could get when I remortgaged from BOE+3.29% was BOE+2.09%.

It's a little sickening really.

I'd almost be better off BTLing my own place and renting it to myself and claiming the tax on the interest back.

Maybe not legal - but they let anyone borrow any amount not so long back - I doubt HMRC will really check who's renting from whom.

:lol: That had crossed my mind as well.

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Yeah, probably, cos with a cap once a landlord gets to £2m, HPI [if and when it happens] will inevitably mean more equity for a given amount of debt.

With no cap HPI in the noughties HPI just led to more debt.

Its means they will for BTL owners reduce their debt through sales or finding alternative sources of funding.

I think the reason Llyods has 60% of the BTL market is becuase they were, persuaded to save Halifax/RBS and hence took over their bad debts and had to be nationalised.

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I'd almost be better off BTLing my own place and renting it to myself and claiming the tax on the interest back.

Maybe not legal - but they let anyone borrow any amount not so long back - I doubt HMRC will really check who's renting from whom.

I'm happy to rent from you if you're happy to rent from me and in 25 years time we can do a house swap.

I'm sure no one has considered this before now and I'm sure it's not currently going on completely unchecked anywhere else in the country.

It's a little sickening really.

Just a little but think of all the jobs and wealth being created by these entrepreneurs and their investments. Banks need to help these philanthropists provide a much needed service to priced-out FTBers.

And with the shortage of housing we have in this country I'm surprised I'm not stepping over sleeping bodies every time I walk down the street. Bridges and park benches must be literally overflowing with human limbs.

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why are they dropping the limit from 10 to 2 million? is a 10 million pound business more risky than the 2 million one?

and what equity are they looking for?

Think this is called diversification ?

Risks really depends on asset quality, LTV and whether there are more liquid asset behind the borrower. I interpret this as

LBG doesn't really want to lend to BTL but still want to keep one foot in the market.

LBG does this 2.5% SVR thing because they expect the base rate to rise beyond 0.5% after the 2 years high rate period is up

(thought LBG is probably wrong from what we know about BoE though they don't get hurt either way as spread is their life blood, not the rate itself)

Edited by easybetman

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  • 145 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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