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Fairies Wear Boots

I Just Found My Own Btl Numpty

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Somehow, most people I know have been rent forever losers, or own their own house and that's it. Stupid people on interest only mortgages I haven't come across. Maybe I don't get out enough.

Anyway this guy at the new place I work told me a couple of weeks ago he owned a flat and when his mortgage deal comes to an end he is going to sell it. Because interest rates will rise and he's bricking himself.

Today, it transpired he lives at home with his parents. 'But I thought you owned your own place?' I said. Turns out he lives at home, bought a rental flat in 2007, mortgage with Northern Crock, 95 percent IO mortgage. Rent doesn't cover mortgage. Has to top it up! Was expecting capital gains.

It's coming onto the market it FEB. A bit more supply, all hail the crash!

Edited for clarity and to say, I don't know if it's a new build or not.

Edited by Fairies Wear Boots

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A flat bought in 07 on 95% LTV brilliant that moron is sitting on nice big loss! Was it a new build too? :lol:

Why doesn't he put it on the Market now? It's never going to sell before feb anyway.

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A flat bought in 07 on 95% LTV brilliant that moron is sitting on nice big loss! Was it a new build too? :lol:

Why doesn't he put it on the Market now? It's never going to sell before feb anyway.

A muppet indeed.

If it was a new build he will have lost 15% minimum on receipt of the keys, factor in say a 10% fall from peak for a realistic selling price though again could be more depending on location, and the guy has lost a minimum of 25% of the flat value and probably a lot more.

People need to learn to negotiate and walk away if they don't get what they want - I happily bought in 2009 knowing I was paying the 2004 price, I wouldn't have tried to match the outlying expectations of some developer or BTL flipper.

Edited by Mikhail Liebenstein

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Somehow, most people I know have been rent forever losers, or own their own house and that's it. Stupid people on interest only mortgages I haven't come across. Maybe I don't get out enough.

Anyway this guy at the new place I work told me a couple of weeks ago he owned a flat and when his mortgage deal comes to an end he is going to sell it. Because interest rates will rise and he's bricking himself.

Today, it transpired he lives at home with his parents. 'But I thought you owned your own place?' I said. Turns out he lives at home, bought a rental flat in 2007, mortgage with Northern Crock, 95 percent IO mortgage. Rent doesn't cover mortgage. Has to top it up! Was expecting capital gains.

It's coming onto the market it FEB. A bit more supply, all hail the crash!

Edited for clarity and to say, I don't know if it's a new build or not.

Ah. Just in time for the Spring Bounce then.

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bought a rental flat in 2007

95 percent IO mortgage.

Rent doesn't cover mortgage.

FFS

I'm so glad I'm getting negative real interest rates on my savings so that idiots like this don't yet have to come to terms with the fact that they are idiots.

It's the equivalent of reducing all speed limits to 5mph or reducing mains voltage to 5V. You might prevent a few accidents, but you lose the whole point of the system.

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We had a discussion about it yesterday. Old guy who sits beside both of us told him he'd be a fool to sell now. How would he feel if in a couple of years time it has gone up twenty five percent? To this he just shook his head. I think he realises we're in for drops and rate hikes.

Old guy believes in a "return to normal". This is just a blip. A return to multiple figures HPI and a possible 25 percent profit in two years. And the place we work in gave no pay rises, is funded by the government and we're expecting more cuts.

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Old guy believes in a "return to normal". This is just a blip. A return to multiple figures HPI and a possible 25 percent profit in two years. And the place we work in gave no pay rises, is funded by the government and we're expecting more cuts.

hmm...some sharp cookies where you work isn't there? I was going to make a funny about which government area so many blunt tools could be working but the choices are endless.

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What if he just hands the keys back to Northern Crock and walks away, sorry to say it but the tax payer has underwritten alot of this stupidity.

You can't just hand the keys back, if you do then you are passing the responsibility of the sale to Northern Rock but you would still be liable for any short fall.

My understanding is that in the US you can do this, but here you are liable for the mortgage.

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My understanding is that in the US you can do this, but here you are liable for the mortgage.

100% you are responsible for the entire amount you borrowed and nobody should listen to being told otherwise or they may get a nasty shock

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My heart really bleeds for this guy. laugh.gif

Mortgages like this should never have been approved in the first place.

Thats what you get if you believed the endless BTL drivel that used to be all over the TV.

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You can't just hand the keys back, if you do then you are passing the responsibility of the sale to Northern Rock but you would still be liable for any short fall.

My understanding is that in the US you can do this, but here you are liable for the mortgage.

So Northern Rock sells the property at auction, leaving say a £50k shortfall. Northern Rock then approach the BTL loser living at home with his parents, he is unable to pay it back on his salary and has no real assets other than a PS3, TV, moped and bicycle :D so he stubbornly refuses a penny. Northern Rock go to court and get a CCJ against the individual and with this approach a debt collection agency (say Moorcroft) who apply for a warrant from the High Court.

Moorcroft turn up at his parents address... what do they do ? threaten to take goods that may or may not belong to the BTL loser ? They can't have his moped as the law prohibits this, the bicycle belongs to his dad and the PS3/TV belong to his sister whos at university mabe - when asset prices were going up it was worth it for the banks to either reposses the property or in the case of an unsecured loan raise a charge against the property in question.

So it's bankruptcy or an IVA then:

and this only allows the creditor an agreed number of years for the debtor to try and pay back 'what he can' less what the judge deems to be reasonable living expenses so at best the banks will see 1/10th of the outstanding debt paid before the remainder is written off.

I knew a girl once who lived like a queen maxing out on credit cards working dead end jobs eventually owing 35k! bankruptcy inevitably came and went (as did the debt, most of it was written off) and she lived happily ever after. Expect more of the same.

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Here's another one from the Independent on Sunday

http://www.independent.co.uk/money/mortgages/house-price-dip-good-news-for-buytolet-2102466.html

Case Study

Dean Warner, 43, Business development manager

This time last year, Dean Warner knew nothing about buy-to-let. Today he owns seven properties all in Hull city centre.

"Hull is an area with high rental demand and where property is still relatively cheap so I chose there to buy seven, two- and three-bed flats priced between £47,000 and £60,000 – and they are all generating rent."

He also needed relatively small mortgages to make his sums stack up. He bought one home outright and on the rest put down deposits of 30 per cent. All of his mortgages are interest-only on two-year fixed rates of 5.2 per cent. "I wanted to ensure against interest rate rises for the first couple of years until I found my feet," he says. "My cash is working a lot harder already and I also believe that, eventually, capital growth will pick up too."

Lordy!!

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So it's bankruptcy or an IVA then:

and this only allows the creditor an agreed number of years for the debtor to try and pay back 'what he can' less what the judge deems to be reasonable living expenses so at best the banks will see 1/10th of the outstanding debt paid before the remainder is written off.

You finished the story too early...

He then goes on to a life where he can never get credit again, will never own his own home and ends up paying hand to mouth with a life full of stress.

Things were different in the past, in an age of easy credit, you could get into and out of debt with little to no problems as the banks were just happy to throw money around, that's not the case now. While you are free from the bankruptcy order in 1 or 3 years IMO the consequence will now last a life time. I'm seeing it with my own eyes a friend at work is having serious difficulty raising money even though he earns a decent salary and has no debt. He has applied for loans and credit cards and every time has been turned down, the banks won't tell him why and the comment is often that the person doing the application can't see a reason. Another friend who went bankrupt 20 years ago says that he is finding it more and more difficult to keep the cash flowing for his business and through the entire course of his life has had to pay over the odds for credit, he is the sort of person with the strength of character to deal with the problem, I have no doubt the "easy money" BTL lot will be less resourceful and less committed to working hard to get back on track the way he has.

Once the tap is turned off those high risk people are the first to suffer. While I have no doubt people "get away with it" I personally would rather do without the stress, hassle and sleepless nights it would no doubt bring. And for every air headed credit card junkie you can name I'm sure there is a middle aged sales rep hanging from the rafters dead due to the stress his financial problems have caused.

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You finished the story too early...

He then goes on to a life where he can never get credit again, will never own his own home and ends up paying hand to mouth with a life full of stress.

I'll finish the story now...

In time she rebuilt her credit file and undertook a college course in bookkeeping and later found a job working for a recruitment agency earning a better salary. She found love in Gavin a self-employed builder, got married, jointly saved up a reasonable deposit and went on to buy a family home in the small town they call home, jointly taking out a mortgage with Lloyds.

Some people/business banks will never lend to again, possibly because they have not rebuilt their credit file and are still considered dubious.

and where is this rule about not being able to own your own home ever again ? where's the small print. I have never borrowed more than I can afford to pay back (Car Hire Purchase) never fallen behind on any repayments on anything and in March next year I intend to hand the car back so will be totally debt free. I'm starting to feel that home ownership is overrated anyway but 'at current prices' will be able to buy a modest 3 bed home outright in 10-15 years why would a previous bankrupt be unable to do the same?

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I'll finish the story now...

In time she rebuilt her credit file and undertook a college course in bookkeeping and later found a job working for a recruitment agency earning a better salary. She found love in Gavin a self-employed builder, got married, jointly saved up a reasonable deposit and went on to buy a family home in the small town they call home, jointly taking out a mortgage with Lloyds.

Some people/business banks will never lend to again, possibly because they have not rebuilt their credit file and are still considered dubious.

and where is this rule about not being able to own your own home ever again ? where's the small print. I have never borrowed more than I can afford to pay back (Car Hire Purchase) never fallen behind on any repayments on anything and in March next year I intend to hand the car back so will be totally debt free. I'm starting to feel that home ownership is overrated anyway but 'at current prices' will be able to buy a modest 3 bed home outright in 10-15 years why would a previous bankrupt be unable to do the same?

I wasn't suggesting people in this situation shouldn't and couldn't get themselves back on track, that's the whole point of the bankruptcy process. I was simply challenging the notion that you just pop the keys back and it's all good.

In terms of finishing the story I was talking about the consequence of handing the keys back, not somebody with credit card debt. There is a fair difference between racking up even high card debt of 10-20k and walking away from £100+K worth of mortgage.

As for never owning a house, my point is we are currently in an environment where people are getting turned down for mortgages unless they have totally clean credit records, not sure why you felt compelled to give me your credit history? Can't see mortgage lenders in the future being too keen on lending to somebody with a track record of just tossing the towel in.

I'd totally agree owning a home is possibly over rated, not so sure people wrapped up in the BTL game are the sort who would agree however.

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I wasn't suggesting people in this situation shouldn't and couldn't get themselves back on track, that's the whole point of the bankruptcy process. I was simply challenging the notion that you just pop the keys back and it's all good.

In terms of finishing the story I was talking about the consequence of handing the keys back, not somebody with credit card debt. There is a fair difference between racking up even high card debt of 10-20k and walking away from £100+K worth of mortgage.

As for never owning a house, my point is we are currently in an environment where people are getting turned down for mortgages unless they have totally clean credit records, not sure why you felt compelled to give me your credit history? Can't see mortgage lenders in the future being too keen on lending to somebody with a track record of just tossing the towel in.

I'd totally agree owning a home is possibly over rated, not so sure people wrapped up in the BTL game are the sort who would agree however.

Fair comment, guess I'm trying to get across that I'm not one of these spend today no care for tomorrow kinda people :) if I could change anything then I'd make sure a number of them got slammed down for it but that will never happen.

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What annoys me about these is the poor sod who has taken on one of these properties as a tenant in good faith is going to be messed around come repossession time. And what if the boiler breaks down and this clown can't afford to get it repaired? It's the innocent tenant I feel for, this btl idiot is a casualty of his own stupidity.

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What annoys me about these is the poor sod who has taken on one of these properties as a tenant in good faith is going to be messed around come repossession time. And what if the boiler breaks down and this clown can't afford to get it repaired? It's the innocent tenant I feel for, this btl idiot is a casualty of his own stupidity.

Been in this situation myself (as a tenant), no big deal just pack up and move on.

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What annoys me about these is the poor sod who has taken on one of these properties as a tenant in good faith is going to be messed around come repossession time. And what if the boiler breaks down and this clown can't afford to get it repaired? It's the innocent tenant I feel for, this btl idiot is a casualty of his own stupidity.

His tennant rang up and told him that the light in the hall doesn't work. Afterwards he started ranting, and I said there must be something actually wrong with it. And he reckons from past experience it could possibly be a blown bulb. He suspects the tennants have no jobs ... does this mean a possible drop in rental income in the future? (presuming he decides to hold his nerve and not sell). As a nice landlord, he added that it will give him great pleasure to tell them he is selling it and they will have to move out.

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We had a discussion about it yesterday. Old guy who sits beside both of us told him he'd be a fool to sell now. How would he feel if in a couple of years time it has gone up twenty five percent? To this he just shook his head. I think he realises we're in for drops and rate hikes.

Old guy believes in a "return to normal". This is just a blip. A return to multiple figures HPI and a possible 25 percent profit in two years. And the place we work in gave no pay rises, is funded by the government and we're expecting more cuts.

Is it the BBC ? :P

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No it's higher education. But don't worry folks, the gubbermint are ring fencing education.

Ah yes, but Higher Education isn't education any more. It's Business, Innovation or Skills - none of which are ring-fenced. Worse, largely chunks of HE aren't even one of those, and those are the opposite of ring-fenced, they're now fenced off - the prerogative of the rich, or those who can borrow enough to pretend to be rich.

I think the Tories would like to see about half a dozen universities close, and a good many more merged. That should bring those hotbeds of discontent to heal. Friend remembered the days when Oxford FE college did some teaching for people from British Leyland, who loathed the (then) compulsory Liberal Studies. Not because it was a waste of time, but because it was bad for the workforce, "It gave them Ideas."

And we can't have people getting ideas.

db

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  • 261 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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