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West Bromwich Building Society's Increases Interest Rates For Btlers -- Merged Threads


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Considering that so many properties are now bought with cash, do people really think that interest rate rises are going to wipe out BTL?

There are more than enough IO players out there to sink asset prices and hit bank balance sheets on their own.Cash buyers have the ability to cut rents,so if anything,a rise in their number will potentially increase volatility,not reduce it.

It's not just about interest rates but demand too and that's related to HB and disposable incomes which are dropping.

Ultimately,the biggest threat to the weaker hands are the capital ratios of the major players.

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There are many subsections of BTLer's,some of whom are very shrewd and well financed.

Generally,the 'weak hands' could be categorized

1) LTV's 75%+

2) outside the M25

3) purchases post 2004/5

4) flats

5) gross rental income <150% of a repayment mortgage

6) IO

The list isn't exhaustive,but if a couple or three of those boxes are ticked,then it might be an appropriate time to.........

Good Summary - I would add possibly a 7th + 8th categories

Those that added properties to their portfolios by re-mortgaging an existing BTL property and using the "equity" as more BTL deposit.

Those that have spend (or budgeted) zero on maintenance and will be praying for the boiler / roof not to fail. (sort of fits in with 5th category)

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Good Summary - I would add possibly a 7th + 8th categories

Those that added properties to their portfolios by re-mortgaging an existing BTL property and using the "equity" as more BTL deposit.

Those that have spend (or budgeted) zero on maintenance and will be praying for the boiler / roof not to fail. (sort of fits in with 5th category)

I guess the heavily leveraged multiple owners fit the 'LTV 75%+' case in Sancho's list.

The media coverage of this fails to mention that these people were apparently doing just fine on fixed rates in excess of 5% prior to dropping to the circa 1%, and will be heading up to 3%. If many/all of these are IO, they should still be paying not much more than half their original monthly sum. I guess boilers, windows and general maintenance can be put off for a while as you pretend you're making money, but as mortgage payments drop the maintenance requirements eat up the difference.

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I guess the heavily leveraged multiple owners fit the 'LTV 75%+' case in Sancho's list.

The media coverage of this fails to mention that these people were apparently doing just fine on fixed rates in excess of 5% prior to dropping to the circa 1%, and will be heading up to 3%. If many/all of these are IO, they should still be paying not much more than half their original monthly sum. I guess boilers, windows and general maintenance can be put off for a while as you pretend you're making money, but as mortgage payments drop the maintenance requirements eat up the difference.

Is that originally 75%+ LTV (not really going to happen on new BTL lending) or current LTV of property?

(Interlinking of) multiple properties if something goes wrong quickly escalates things too. LLs might be able to afford a small shortfall (or longer voids) on 1 flat but not 5-6 at the same time.

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Is that originally 75%+ LTV (not really going to happen on new BTL lending) or current LTV of property?

(Interlinking of) multiple properties if something goes wrong quickly escalates things too. LLs might be able to afford a small shortfall (or longer voids) on 1 flat but not 5-6 at the same time.

Ah, I meant previous (say up to 2007/08) remortgaging at higher LTV than is now available. Quite conceivable there are people with a triple-digit LTV across their portfolio(the Wilsons being a strong possibility for starters)

Edited by The B.L.T.
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Well I'm a landlord and I've just had to reduce the rent. Plus, my tenant has been a nightmare and it didn't even cover my mortgage. Where are all these bloated landlords again?

- Spitfire Charlie , Midsomer, 23/9/2013 05:46

Given all the murders I've seen on TV in that area I'm surprised there is anyone left to rent a house there. LLL. :ph34r:

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Ah, I meant previous (say up to 2007/08) remortgaging at higher LTV than is now available. Quite conceivable there are people with a triple-digit LTV across their portfolio.

Plenty of devils in detail - that was what I thought you meant...

Plenty of 100%+ LTV based on current values in current condition as well - The NAB owned banks seem to be calling those in a the moment.

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Just looked at the guardian's take on it, some Juicy details:

http://www.theguardi...to-let-mortgage

Change targets only 6,700 borrowers who took out mortgages after 2006 and have multiple BTL mortgages with WB.

Original loans at 85% LTV max apparently.

Looks like they tick most of the items on list(s);)

Edited by koala_bear
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My favourite LL misconception on display here(the idea they have any pricing power)

Yes that is a good one. Im seeing this already, various properties available to rent, new builds are smaller than the older properties they compete with and they are asking more for them. I asked an estate agent why one in particular was so expensive, 'because they bought a couple of years ago and thats what they need to cover the mortgage'. It had been empty for 3 months when I viewed it 2 months ago and is still empty today.

When geniuses like that have a higher mortgage to pay they will increase the rent more and will doubtless be absolutely baffled why they aren't rich yet despite 'getting into property'.

C'mon banks get on with it, this was long predicted on here, get your skates on and let's throw these fools into bankruptcy where they belong and have a functioning economy again.

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There are many subsections of BTLer's,some of whom are very shrewd and well financed.

Generally,the 'weak hands' could be categorized

1) LTV's 75%+

2) outside the M25

3) purchases post 2004/5

4) flats

5) gross rental income <150% of a repayment mortgage

6) IO

The list isn't exhaustive,but if a couple or three of those boxes are ticked,then it might be an appropriate time to.........

.....Fill your pants?

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Yes that is a good one. Im seeing this already, various properties available to rent, new builds are smaller than the older properties they compete with and they are asking more for them. I asked an estate agent why one in particular was so expensive, 'because they bought a couple of years ago and thats what they need to cover the mortgage'. It had been empty for 3 months when I viewed it 2 months ago and is still empty today.

When geniuses like that have a higher mortgage to pay they will increase the rent more and will doubtless be absolutely baffled why they aren't rich yet despite 'getting into property'.

C'mon banks get on with it, this was long predicted on here, get your skates on and let's throw these fools into bankruptcy where they belong and have a functioning economy again.

Yep, someone is going to have to take a hit sooner or later. Might as well start with these clowns :lol:

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Building societies core business is lending for house purchases. The problem is there is alot of overcapacity in banking ( it must be preserved) and the boe have driven down funding costs. All this competition , cheap funding and low transactions there is not enough business to go around and i would guess thin margin! I have not checked out their results but some time ago a few posters were saying the Nationwide would continue to suck in the smaller societies.

This is not advice.

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Has any poster actually seen the clause in the mortgage terms and conditions that permits them to increase the differential above BOE base rate?

Or are they chancing their arm to get the money to build their brand new office building?

Let me guess, that's what the building society movement was formed for: to let the building society managers work in luxury! (at their savers and borrowers expense)

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Has any poster actually seen the clause in the mortgage terms and conditions that permits them to increase the differential above BOE base rate?

Or are they chancing their arm to get the money to build their brand new office building?

Let me guess, that's what the building society movement was formed for: to let the building society managers work in luxury! (at their savers and borrowers expense)

These clauses can be small and ambiguous.

They won't be doing this without taking legal guidance first.

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Landlords taking a hit to help savers, according to West Bromwich Building Society as buy-to-let borrowers face mortgage rate hike

From the article it sounds like they're still taking it out on savers but because they're now going to target BTLers they mightn't have to increase the savers' repression - yet.

Of course they put it like they're helping savers :rolleyes:

Spinmeisters spinsheisters.

Edited by billybong
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These clauses can be small and ambiguous.

They won't be doing this without taking legal guidance first.

Don't lawyers just love cases like this.

I'm guessing that other untrustworthy bankers have looked at the response from BOI borrowers and have decided to follow suit. How long before all the bankers decide that contract terms don't apply to their industry and that they can act with complete impunity to the law and change any of their terms and conditions at will. Just wait until they decide to impose exorbitant fees to your current accounts.

At least Santander backed down from their attempt to charge for business bank accounts that they sold on the basis of no charges ever for the life of the account. But that was small beer to the millions extra that BOI and West Brom can charge over the remaining life of affected mortgages.

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Property 118 want class action against West Bromwich BS.

Please tell all landlords. West Bromwich Building Society to increase BTL tracker margins

Your tracker mortgages may not be with BoI or West Brom, however, that does not mean that you are safe. You may be OK today but what about next week, next month or next year?

Unless the PRS unites and fights back then lenders will continue to ride roughshod over landlords.

We need 1,000 landlords to contribute just £100 to fund the test case against Bank of Ireland.

Are you in?

Class Action Expression of Interest

Justin Selig, a solicitor at The Law Department and a Partner in Landlord Action is acting on this case. By completing this form you are authorising us to forward your details to Justin Selig so that he can make direct contact with you and advise what you need to do to formally instruct him to include you in this Class Action.

http://www.property118.com/west-brom-building-society-to-increase-btl-tracker-margins-by-2/43657/

Bank of Ireland recently reversed the decision for 1,200 borrowers of more than 13,500 originally affected, conceding that in these cases at least the contracts were unclear.

http://www.thisismoney.co.uk/money/mortgageshome/article-2334365/Financial-Ombudsman-set-rule-tracker-mortgage-storm.html

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1,200 of the 13,500 affected had their rate rise overturned according to the Guardian.I'm unsure how many properties were involved.

Still it is bad press for BTL? Along with the voids, the bad tenants, the repairs, the noise complaints from neighbours you are also expected to keep money aside to pay lawyers when your bank doesn`t play ball :lol: Could think of less stressful things to do than BTL.

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So the banks (or building societies) having realised that they have extracted all they can from the average joe, turn on BTL investors.

Interesting times.

Being a leveraged BTL landlord is like painting a big target on your head. You are an easy target for the tax man (2% residential letting tax anyone?) and extremely vulnerable to the British banks who do not give out fixed mortgages for the term of the 'investment'.

BTLer's are another group who have been bailed out by the tax payers. Yet there's never a free lunch!?!

An ex colleague of mine and her boyfriend had a string of IO BTL properties. They were facing ruin when rates shot up to the dizzy heights of 6%, prices crashed by 20%, over leveraged and unable to sell. Then QE/ZIRP kicked in, and the garden was rosy again.

It seems to me that financial prudence is deliberately being driven out of the gene pool. I have some sympathy to those who fell for the hype and felt little choice but to over extend themselves for a home. However the debt binging tax sucking BTL brigade are more then welcomed to be thrown on to the fire.

Edited by PopGun
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