Jump to content
House Price Crash Forum
Tenubracon

Nationwide Would Rather Lend To Btlers Than To Ftbs

Recommended Posts

http://www.guardian.co.uk/money/2011/apr/23/buy-to-let-bounces-back

From the article:

"In an extraordinary admission, Nationwide – one of the biggest mortgage lenders – says it would rather give mortgages to landlords than first-time buyers. Matthew Wyles, the society's "distribution director", told an industry debate hosted by HSBC: "As a lender, we would rather lend 75% LTV [loan-to-value] on a buy-to-let mortgage to an experienced buy-to-let investor, than to a first-time buyer at 95% LTV."

Share this post


Link to post
Share on other sites

Sounds logical. Take away the Grauniad spin and 75% is safer than 95%. Add to that the fact that the BTL can be repossessed if in default ...

It's only because the siituation is so screwed up that this seems logical.

Share this post


Link to post
Share on other sites

Sounds logical. Take away the Grauniad spin and 75% is safer than 95%. Add to that the fact that the BTL can be repossessed if in default ...

Yes, that sounds about right!

Surely there's a limit to the amount of tennants available! :blink:

At least Nationwide are asking for 25% up front!

Share this post


Link to post
Share on other sites

Might be new for Nationwide but there was a similar story in Jan 2010

Whiteaway Laidlaw, a subsidiary of Manchester Building Society, which entered the buy-to-let market for the first time six months ago, and whose typical borrower is a GP with two or three buy-to-let properties, said that it was targeting high-earning landlords rather than first-time buyers because they were less likely to default.

It has also introduced a mimimum age limit of 30 to reduce exposure to younger, inexperienced buy-to-let investors.

David Cowie, chief executive of Manchester Building Society, said: “First-time buyers do not have a proven track record of meeting mortgage repayments. They might have a good credit history from paying off credit cards but a mortgage debt might be ten times what they are used to. We think that grade A buy-to-let is a much lower lending risk.”

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6993169.ece

Share this post


Link to post
Share on other sites

no ftbs, so they sing the praises of BTL.

gotta move these colour mortgages, its money for nothing and your debts for free.

Share this post


Link to post
Share on other sites

Exactly. The decision is right for one loan by one lender to one borrower. But if you take it to its logical conclusion, all FTB's will end up paying the mortgages PLUS any BTL profit on top.

So how can that be more secure on an entire system basis?

Indeedie.

75% on one house you can repossess is fairly secure. 75% on a sufficiently big portfolio is systemic trouble when it distorts the market as a whole.

Share this post


Link to post
Share on other sites

Might be new for Nationwide but there was a similar story in Jan 2010

That says to me that Whiteaway Laidlaw are factoring in a drop in the housing market and as well as the 25% deposit want to be able to distrain the rich "BTL" investor's other assets at the same time. Be prepared for some middle class misery next year.

Share this post


Link to post
Share on other sites

To everyone slating them surely the comparable question would be what would be thier choice give a BTL at 75% LTV and a FTB at 75% LTV. I'd rather lend to someone who has £25k in the £100k at risk than someone who took a bank loan and maxed CC to raise £5k in the £100k.

Edited by zebbedee

Share this post


Link to post
Share on other sites

Hardly a surprise, but the government will clamp down on BTL tax evasion. Far too many (folk I know as well) are dodging their liabilities, at least for now.

Tax evasion for smalll BTL landlords is being clamped down on and the budget didn't look too good did it?

1) SDLT reduced to average price of properties purchased instead of total spent

2) REITs the 2% conversion charge is planned to be removed to help large firms turn residential landlords. I've read these REITs escape CGT and tax on rental income.

Result is big firms have more tax breaks so can afford to charge less rent. Then as small landlords cannot let their properties they have to sell to large firm.

Mr S Landlord with his one let competing with a firm like Aviva..... could be a mismatch?

Share this post


Link to post
Share on other sites

http://www.guardian....et-bounces-back

From the article:

"In an extraordinary admission, Nationwide – one of the biggest mortgage lenders – says it would rather give mortgages to landlords than first-time buyers. Matthew Wyles, the society's "distribution director", told an industry debate hosted by HSBC: "As a lender, we would rather lend 75% LTV [loan-to-value] on a buy-to-let mortgage to an experienced buy-to-let investor, than to a first-time buyer at 95% LTV."

Looks like they're factoring a drop in prices of >5% but <25%, which seems reasonable. I wouldn't lend someone 95% of the value of a house that could well drop by 10-20% over the next couple of years.

Share this post


Link to post
Share on other sites

How things have changed

In the boom years of 2000 onwards Nationwide did not entertain BTL mortgages.

Share this post


Link to post
Share on other sites

http://www.guardian.co.uk/money/2011/apr/23/buy-to-let-bounces-back

From the article:

"In an extraordinary admission, Nationwide – one of the biggest mortgage lenders – says it would rather give mortgages to landlords than first-time buyers. Matthew Wyles, the society's "distribution director", told an industry debate hosted by HSBC: "As a lender, we would rather lend 75% LTV [loan-to-value] on a buy-to-let mortgage to an experienced buy-to-let investor, than to a first-time buyer at 95% LTV."

I Bet They check the equity Value of the BTLer before they lend in case of repro.

I still think Building societys should not be lending to BTLers.

Share this post


Link to post
Share on other sites

Ditto.

In fact I'll go further - Building Societies should not be about pumping credit into the existing housing stock.

They should concentrate on lending money to increase the supply of good quality housng - for purchase or rent.

exactly - BSs were set up so that people could save money with them and then in the fullness of time be assured a mortgage to buy their HOME if the figures added up. (how much of a dinosaur does that make me).

I have been disenchanted with NW since they acquired my ISA account which was with the Portman. I now have no funds with them and will not invest with them again. :)

Share this post


Link to post
Share on other sites

I Bet They check the equity Value of the BTLer before they lend in case of repro.

I still think Building societys should not be lending to BTLers.

+1

At least notionaly, mutuals have a benevolent ethic and usually some form of "member" representation.

I wonder what this amounts to and what might be done to affect the policy of the Nationwide.

Share this post


Link to post
Share on other sites

+1

At least notionaly, mutuals have a benevolent ethic and usually some form of "member" representation.

I wonder what this amounts to and what might be done to affect the policy of the Nationwide.

Nationwide has been good to bank with for a long time: I've been with them since the late 1980s (though my account remained pretty-much dormant when I was living&working abroad).

In the last year or two they seem to have lost most of the long-standing advantages I've cherished as strong reasons to stay. Like, credit- and debit cards I could use abroad with no charges or penalties (and favourable exchange rates). And they've even closed our local agency, so I'm stuffed when I get a cheque. Bah, Humbug.

Share this post


Link to post
Share on other sites

Despicable. And who's this BTL twit 'Turnbull' in the comments section?

Twit or no twit......he is correct in saying that HM Government will continue to intervene massively in the housing market to keep prices up. The reduction in BTL Stamp Duty for those buying £1m worth of property portfolio from 5% to 1%, low interest rates, Government subsidies to those in arrears, assisted purchase schemes, and allowing massive RPI/CPI inflation all point to the fact that government would rather nuke the country with our own ICBMs than allow house prices to fall.

The rules changed in 2007, and not many on here saw it coming.

Share this post


Link to post
Share on other sites

Sounds logical. Take away the Grauniad spin and 75% is safer than 95%. Add to that the fact that the BTL can be repossessed if in default ...

...and add to that the fact that they might be able to rent out the BTL once they've repossessed it, rather than have to flog it off cheap at auction.

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.

  • 277 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.