Jump to content
House Price Crash Forum
porca misèria

Btl Really Is A One-Way Bet

Recommended Posts

I don't recollect this story making it to HPC. BTL buys flat in 2002, makes a loss on the rent, sells at a loss in 2006( :blink: ). Takes his mortgage lender's surveyor to court and wins £72k compensation!

What's that going to do for surveyors' valuations? :lol::lol:

Bit like smokers winning compensation from tobacco companies. You despise the filthy junkies, but wish them huge damages against the pushers.

Share this post


Link to post
Share on other sites

I don't recollect this story making it to HPC. BTL buys flat in 2002, makes a loss on the rent, sells at a loss in 2006( :blink: ). Takes his mortgage lender's surveyor to court and wins £72k compensation!

What's that going to do for surveyors' valuations? :lol::lol:

Bit like smokers winning compensation from tobacco companies. You despise the filthy junkies, but wish them huge damages against the pushers.

StockMarketWire.com - Buy-to-let lending rose by 12% in the third quarter, according to data published today by the Council of Mortgage Lenders, supported by ongoing demand for rental property against the backdrop of a dysfunctional owner-occupier market.

There were 26,900 buy-to-let loans advanced in the third quarter, worth £2.8bn. This quarterly rise of 8% by volume and 12% by value is the second consecutive quarterly increase in lending. Compared to the third quarter of 2009, the volume of lending was up 14% and the value up 33%, from 23,700 and £2.1bn respectively. Buy-to-let lending is low by historical standards - running at levels last seen in 2002 - and the market will likely continue to show growth into 2011.

At the end of September, there were 1.29 million buy-to-let mortgages outstanding, an increase of 7% from the previous quarter. The proportion of loans in arrears of more than 1.5% of the balance remains broadly unchanged at 1.45%, while repossessions (at 0.12%) and the appointment of receivers of rent (at 0.10%) were also virtually unchanged from the previous quarter.

Buy-to-let demand appears likely to increase, which is unsurprising in an environment where the demand for rental property will be boosted by the access problems that first-time buyers face in the owner-occupier market.

CML director general Michael Coogan said:

"We would expect buy-to-let demand to pick up further if current rising rental trends continue and house prices remain broadly stable. However, there is short term uncertainty as a result of the unresolved debate on housing benefit and landlords' response to new limits.

"The bigger question is whether there will be sufficient supply side capacity to meet that demand, as the number of buy-to-let lenders dwindled in the credit crunch after 2007 and is yet to be fully restored.

"However, it is clear that in a market where access to home-ownership has become more difficult, the private rental sector is experiencing, and will continue to benefit from, high levels of demand for good quality housing."

Story provided by StockMarketWire.com

Share this post


Link to post
Share on other sites

That'l be this flat .

Linky

26/05/2006 £270,000 Flat L No Map Flat 17, Fieldgate Court, 42, Portsmouth Road, Cobham, Surrey, KT11 1HN

10/10/2002 £352,950 Flat L Yes Map Flat 17, Fieldgate Court, 42, Portsmouth Road, Cobham, Surrey, KT11 1HN

Share this post


Link to post
Share on other sites

This is insane.

Why did the judge not ask the person what independent advice/research they had done about letting costs and value? (ie: looking at rental values and recent sale prices...)

insane.

to let an "investor" win this case is just crazy.

But I agree in future valuers will have to go lower to cover their arses.

Share this post


Link to post
Share on other sites

This is insane.

Why did the judge not ask the person what independent advice/research they had done about letting costs and value? (ie: looking at rental values and recent sale prices...)

Because the judge already has that information in front of him.

If you PAY a PROFESSIONAL to do this for you there is no expectation that you have to do it all again for yourself in case the professional who you have paid, does it wrong.

tim

Share this post


Link to post
Share on other sites

Broadcast this story far and wide. Let every surveyor hear it and know the meaning of fear. Let every buy to let investor think their path is clear. Let's face it, with the banks nationalised we have lost our deposit. We might as well trash the place.

Share this post


Link to post
Share on other sites

Because the judge already has that information in front of him.

If you PAY a PROFESSIONAL to do this for you there is no expectation that you have to do it all again for yourself in case the professional who you have paid, does it wrong.

tim

If you're planning a BTL business you should have already done that business plan preparation yourself before getting to the point of borrowing money... you'd be wise to keep checking your figures if there are long time delays too.

As well as looking at rental yields existing you should take into account other new build estates being thrown up. How long before someone blames someone for building more properties and "destroying" rental yield?

Share this post


Link to post
Share on other sites

If you're planning a BTL business you should have already done that business plan preparation yourself before getting to the point of borrowing money... you'd be wise to keep checking your figures if there are long time delays too.

As well as looking at rental yields existing you should take into account other new build estates being thrown up. How long before someone blames someone for building more properties and "destroying" rental yield?

But validating the rent achievable is not part of doing the business plan.

You pay the professional to validte the achievable rent and then put that figure in the business plan that you draw up.

tim

Share this post


Link to post
Share on other sites

I personally know someone trying to pull the same trick right now. Bought two off plan flats without seeing them in Bolton, or somehwere up north. Making a loss on the rent and the valuation came in lower than the purchase. Her solution is to sue the bank saying that they were negligent in lending to her.

Share this post


Link to post
Share on other sites

I personally know someone trying to pull the same trick right now. Bought two off plan flats without seeing them in Bolton, or somehwere up north. Making a loss on the rent and the valuation came in lower than the purchase. Her solution is to sue the bank saying that they were negligent in lending to her.

The more of these cases the bank`s have filed against them whether they win or loose them can only be a good thing,as they will lend far less in the future to the BTL brigade and value properties lower or require larger deposits and possibly a combination of both

Share this post


Link to post
Share on other sites

I just noticed that one of our local estate agents is now flagging up less-than-desirable properties as 'suitable for BTL' and there's a blurb hardselling the concept of BTL.

Share this post


Link to post
Share on other sites

This is insane.

Why did the judge not ask the person what independent advice/research they had done about letting costs and value? (ie: looking at rental values and recent sale prices...)

insane.

to let an "investor" win this case is just crazy.

But I agree in future valuers will have to go lower to cover their arses.

I heard this on You & Yours yesterday. Apparently it wasn't the BTL-er who commissioned the survey but the lender. The judge decided however that the surveyor's duty of care extended to the BTL-er. It was something to do with the fact that the actual rent the BTL-er recived was half that of what the survey projected. To me, it highlighted the fact that rentals, house prices. are a matter of opinion but will this dawn on the dumb masses? I think not.

But it's stupid anyway.. I mean it just looks like you can now sue if your house price value goes down or you don;t sell for what price you sell your house for. It irritates me as well as yet again the idiot BTL-er are being paid off for the mess that they contributed to.

Share this post


Link to post
Share on other sites

Unachieveable and unrealistic rents.

Unachieveable and unrealistic pricing.

Effectively promises made by so-called professionals.

Why shouldn't they cough up?

Share this post


Link to post
Share on other sites

I don't recollect this story making it to HPC. BTL buys flat in 2002, makes a loss on the rent, sells at a loss in 2006( :blink: ). Takes his mortgage lender's surveyor to court and wins £72k compensation!

What's that going to do for surveyors' valuations? :lol::lol:

Bit like smokers winning compensation from tobacco companies. You despise the filthy junkies, but wish them huge damages against the pushers.

This is good news actually - this will ensure that surveyor be even more conservative in their valuation...

Share this post


Link to post
Share on other sites

I wonder if that Judge had bothered to check how the rest of properties in that development had performed, (for those with property bee that should be interesting).

If that actually is the correct property the phrase buyer beware springs to mind.

Share this post


Link to post
Share on other sites

If that actually is the correct property the phrase buyer beware springs to mind.

Sales since 2006 in the same block with original arrowed .

I think the owner of flat 18 is in for a shock as some point .

fieldgatecourt42portsmo.jpg

Share this post


Link to post
Share on other sites

"He subsequently took legal action against Colleys, claiming the surveyor owed him a duty of care, and was awarded £72,000 this month. The damages cover his loss of rental income and the transaction costs of purchasing and then selling the flat."

He wasn't compensated for the fall in price, that's market forces. The BTLer is still well out of pocket. £82k worth. Ouch.

Edited by deflation

Share this post


Link to post
Share on other sites

One other shocking point in the article is that the surveying company is now owned by Lloyd’s so WE now are paying that fine.

Good and depressing point.

Wonder if these surveyors were on an incentive from the developer and it's that sort of behaviour the judge is looking to punish?

Share this post


Link to post
Share on other sites

Good and depressing point.

Wonder if these surveyors were on an incentive from the developer and it's that sort of behaviour the judge is looking to punish?

Let’s hope that the local media don’t pick up on this, otherwise other local investors will be able claim against Colleys/Lloyds.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.