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Banks Pull Plug On The Buy-To-Let Loans Boom After A Flood Of Applications From Landlords


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HOLA441

Nice and when the govt finally gets the balls up to sort out the mess that is housing benefit what then???

It would be cheaper for the govt to buy up the properties at this price and rent them out, or just give it to the renters.

So in 9 years the taxpayer will have forked out £48,600 in rent that's obviously excluding if rents go up... In the current economic climate I don't think that will happen but it just shows how screwed everything is.

Communist.

Everyone knows that tennis coaches with 5 btls make better landlords than govt.

Edited by Red Knight
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HOLA442
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HOLA443

Looking at teh numbers. IO morgtage for BTL is stated as 3.59% (best deal they say!).

So that's £448.75 / month Interest only

And that's only on a £150,000 house.

How do these numbers make any sense. Surely you can't make money once you start to save some aside for the capital repayments.

Eh? start to save some money for the capital repayments??? :blink:

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HOLA444

Nice and when the govt finally gets the balls up to sort out the mess that is housing benefit what then???

It would be cheaper for the govt to buy up the properties at this price and rent them out, or just give it to the renters.

So in 9 years the taxpayer will have forked out £48,600 in rent that's obviously excluding if rents go up... In the current economic climate I don't think that will happen but it just shows how screwed everything is.

Oh, come now. All the liebour lot are landlords, all the tory lot too. They'll close the schools before they get rid of their beloved landlord housing benefit.

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HOLA445

As has already been pointed out this really does highlight virtually all of the problems in the housing sector. Interest rates rise and he's sunk, housing benefit drops and again he's sunk. No wonder the banking sector are screwed. :angry:

The assumption that £450 per month for a £45,000 house should be ringing alarm bells all over the place.

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HOLA446

Over 5 years cheaper to kick your tenants out, move in briefly and get a residential mortgage fixed for five years then let it out. No one ever checks. Savings would be 25k over five years comparing some rates.

is that past tense or future tense - how likely do you think forbearance or sympathy will be from a 3rd party in this instance?

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HOLA447

You missed the point. The :rolleyes: was for the breathtaking arrogance of that particular poster, although I think she does it to wind us up, a classic troll.

mercsl, like a typical bull troll, extrapolates the boom years with the future, not realising how lucky they have been

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HOLA448

Pretty much everything that is wrong in the market summed up right here....

'Property Owning Democracy'.....God rest her soul.

1531qhk.jpg

Well, he probably paid too much for that 2-bedroom house. Who did he get his advice from, Ajay Ahuja ??? :lol:

3 bedroom terraced house for sale - £26,500

3 bedroom semi-detached house for sale - £32,500

3 bedroom terraced house for sale - Offers in Excess of £34,950

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HOLA449

I have just spoke to Natwest as we are relocating and they have said as we have had a mortgage with them for over 3 years now we can get consent to lease for £100 and we can do that for the period of the mortgage and it will apply if we move onto their standard variable rate etc :huh:

Now I'm really tempted to keep the house as we have a friend wanting to rent and we can better rates (4% repayment) than if we were going to have to move to a BTL deal etc.

Over 10+ years from this point inflation alone surely makes this a good deal as someone will be paying our mortgage we don't need the £25k profit out of the house now (if we get a buyer). Decisions decisions...

so you're going for an uber-leveraged punt on Newcastle with one BTL and one residential mortgage... right you are then

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HOLA4410

so you're going for an uber-leveraged punt on Newcastle with one BTL and one residential mortgage... right you are then

We are renting elsewhere so will only have 1 residential mortgage that is set up as 'properly' as consent to lease. At some point when prices come down more / we finally decide where we want to be for the next 15+ years whilst kids are in school we will start again with a new place on something like a 75% LTV and will then have 2 residential mortgages.

If we can more than cover the mortgage payments (even overpay the repayments mortgage) at property 1 via tenants on a cheap long term residential deal how is this uber-leveraging?

Edited by GeordieAndy
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HOLA4411

Exactly, and in London the two bed rate is £290 per week and surprisingly the minimum rent for a two bed is around £290 per week. It is not the tenants who benefit it is landlords and because housing benefits are so high it also pushes up private rents as well - we 'competed' for a rental with someone on benefits, we offered £280 per week and the people on benefits just went straight in at £290 and got the property.

Give up work...go on benefits....then let the government see why they are getting reducing tax intakes...simply because the high rents make it uneconomical for the working class to work, especially in London....the system has failed. ;)

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HOLA4412

We are renting elsewhere so will only have 1 residential mortgage that is set up as 'properly' as consent to lease.

ah, missed this bit...

If we can more than cover the mortgage payments (even overpay the repayments mortgage) at property 1 via tenants on a cheap long term residential deal how is this uber-leveraging?

well it is leveraging, and you say you can more than cover the mortgage, but with leverage strange things can happen, maintenance, voids, opportunity costs

if it is just up the road for you then a lot of the costs are controlled - do you do your own maintenance?

Edited by Si1
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HOLA4413

well it is leveraging, and you say you can more than cover the mortgage, but with leverage strange things can happen, maintenance, voids, opportunity costs

if it is just up the road for you then a lot of the costs are controlled - do you do your own maintenance?

Thanks for your reply mate - as I say the house is still on the market as I am 90%+ certain that I should get the 20k or so back out of it before the HPC really kicks off. However if someone else is paying off the mortgage (and a bit more on top for repairs etc) even with further falls up here taking us to 40% from peak we won't be worse off really over 10+ years due to inflation etc :blink:

I am awaiting the small print from Natwest before seriously considering letting it out because as nice as the person was on the mortgage specialist helpline I have read many stories where consent to lease is only until your current deal expires etc which would give us no ability to plan long term.

Sure something will happen to force us one way or the other soon and then we will regret doing it in 10+ years time :D

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HOLA4414

However if someone else is paying off the mortgage (and a bit more on top for repairs etc)

You really like that sentence don't you. Third time you write it. Stick up them yeah!

No mention of the mug who carries the debt obligation in that sentence though.

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HOLA4415

You really like that sentence don't you. Third time you write it. Stick up them yeah!

No mention of the mug who carries the debt obligation in that sentence though.

I am typing via smartphone so hard to check what I have already wrote easily but thanks for your helpful comment :rolleyes:

I did not buy our house 3 years ago to become a BTL landlord etc but things change and if we can get £650 month on £130,000 property with mortgage payments of £600 then I am being tempted...

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HOLA4416

Well, he probably paid too much for that 2-bedroom house. Who did he get his advice from, Ajay Ahuja ??? :lol:

3 bedroom terraced house for sale - £26,500

3 bedroom semi-detached house for sale - £32,500

3 bedroom terraced house for sale - Offers in Excess of £34,950

Jesus! 26k.

Okay, I know it's a shitehole, and it looks like someone has pissed on the wall, and it's in Hull. But you couldn't get a shitehole with piss on the wall in the south east if you stuck a zero on the end of that figure!

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HOLA4417

I am typing via smartphone so hard to check what I have already wrote easily but thanks for your helpful comment :rolleyes:

I did not buy our house 3 years ago to become a BTL landlord etc but things change and if we can get £650 month on £130,000 property with mortgage payments of £600 then I am being tempted...

You really like that sentence don't you. Fourth time you write it. Stick up them yeah!

No mention of the mug who carries the debt obligation in that sentence though.

Edited by _w_
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HOLA4418

Thanks for your reply mate - as I say the house is still on the market as I am 90%+ certain that I should get the 20k or so back out of it before the HPC really kicks off. However if someone else is paying off the mortgage (and a bit more on top for repairs etc) even with further falls up here taking us to 40% from peak we won't be worse off really over 10+ years due to inflation etc :blink:

I am awaiting the small print from Natwest before seriously considering letting it out because as nice as the person was on the mortgage specialist helpline I have read many stories where consent to lease is only until your current deal expires etc which would give us no ability to plan long term.

Sure something will happen to force us one way or the other soon and then we will regret doing it in 10+ years time :D

you do love the sentence 'if someone else is paying it off for us'

there are so many ifs and buts implicit in that that it is scary

but fair play and best of luck

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HOLA4419

I have just spoke to Natwest as we are relocating and they have said as we have had a mortgage with them for over 3 years now we can get consent to lease for £100 and we can do that for the period of the mortgage and it will apply if we move onto their standard variable rate etc :huh:

Now I'm really tempted to keep the house as we have a friend wanting to rent and we can better rates (4% repayment) than if we were going to have to move to a BTL deal etc.

Over 10+ years from this point inflation alone surely makes this a good deal as someone will be paying our mortgage we don't need the £25k profit out of the house now (if we get a buyer). Decisions decisions...

So if I've got this right, this deal means:

You stay exposed to one of the fastest falling markets in England, so risking your 25K 'profit'

You just about clear the repayments assuming no voids (your friend may move after 6 months), no maintenance and Natwest don't decide to hike SVRs

You ignore the rule about mixing business with pleasure (what if he looses his job and asks for reduced rent 'until things pick up'?)

Wage inflation kicks off, not just cost inflation as currently (since that makes rent payments harder to meet ie more chance of defaulting)

You're right - its a tough one..

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HOLA4420
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HOLA4421
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HOLA4422

I have just spoke to Natwest as we are relocating and they have said as we have had a mortgage with them for over 3 years now we can get consent to lease for £100 and we can do that for the period of the mortgage and it will apply if we move onto their standard variable rate etc :huh:

Now I'm really tempted to keep the house as we have a friend wanting to rent and we can better rates (4% repayment) than if we were going to have to move to a BTL deal etc.

Over 10+ years from this point inflation alone surely makes this a good deal as someone will be paying our mortgage we don't need the £25k profit out of the house now (if we get a buyer). Decisions decisions...

How long is the period of the mortgage? 2 year fix or much longer?

You'd need it in writing. Over 10+ years inflation alone? We'll see. Unless there is no HPI and just house prices continuing to fall, helped on by desperate landlords way out of their depth.

And you're 90% certain you can sell it on and get £20K equity, or profit as you call it, out should you see the clouds of an HPC. If and when it hits, it hits. Too many people share your confidence they can get out with inflated profits.

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HOLA4423

I am typing via smartphone so hard to check what I have already wrote easily but thanks for your helpful comment :rolleyes:

I did not buy our house 3 years ago to become a BTL landlord etc but things change and if we can get £650 month on £130,000 property with mortgage payments of £600 then I am being tempted...

IF......such a small word when you are selling a proposition ........such a big word when you talk to the receivers.

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HOLA4424

Thanks for the further replies - sorry to hijack this thread but there must be others in a similar position to us.

To answer the last few posts:

  • We can definitely get £650 per month from friends or possibly more via agents however once you take off their fees it will end up about the same. Friends are would be first time buyers tied to local area (jobs and schools) so want security for next x years but we would do standard short hold tenancy agreement etc but with view to keep them for as long as they want.
  • We will be +£75 or so per month between the £650 rent and mortgage costs which we will put away for maintenance etc.
  • If we get the same as another house sold for 3 weeks ago on our street we could take £20k cash from house now.
  • We already have some cash savings and some PM's so the cash would probably end up in ISAs etc so not an amazing return and I am a big fan of spreading risk / hedging against inflation.
  • I'm fully aware prices could drop 50% from peak (making this place worth 80k) but if we are able to keep people in it (it's in good area, nice schools etc) then 10+ years from now we would have had someone else pay the mortgage for let's say 8 of those and simply via inflation (min 6% per year) we would be ok in real terms.

Thanks again for any other thoughts etc and I am still 80% or more certain we will end up just selling it :P

Edited by GeordieAndy
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HOLA4425

Thanks for the further replies - sorry to hijack this thread but there must be others in a similar position to us.

To answer the last few posts:

  • We can definitely get £650 per month from friends or possibly more via agents however once you take off their fees it will end up about the same. Friends are would be first time buyers tied to local area (jobs and schools) so want security for next x years but we would do standard short hold tenancy agreement etc but with view to keep them for as long as they want.
  • We will be +£75 or so per month between the £650 rent and mortgage costs which we will put away for maintenance etc.
  • If we get the same as another house sold for 3 weeks ago on our street we could take £20k cash from house now.
  • We already have some cash savings and some PM's so the cash would probably end up in ISAs etc so not an amazing return and I am a big fan of spreading risk / hedging against inflation.
  • I'm fully aware prices could drop 50% from peak (making this place worth 80k) but if we are able to keep people in it (it's in good area, nice schools etc) then 10+ years from now we would have had someone else pay the mortgage for let's say 8 of those and simply via inflation (min 6% per year) we would be ok in real terms.

Thanks again for any other thoughts etc and I am still 80% or more certain we will end up just selling it :P

Don't forget to pay your taxes.

On the difference between interest payments and rent (e.g. capital repayments & 'profit'). I also hear the relief on interest payments is about to be on its way out.

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