Portman Refuses To Lend To Anymore Btls

[timmy_30]

"The Portman, third largest buy-to-let lender in the UK, said it would avoid lending on new properties until “the market forces of supply and demand” had returned to equilibrium.The move by the group, which lends such mortgages through a subsidiary, The Mortgage Works, comes amid a 5.7 per cent fall in the price of new flats over the past year. Matthew Wyles, group development director at The Mortgage Works, said dubious valuations of new flats were becoming “endemic”. Valuation had become “more of an art than a science” because of the current oversupply of new flats."

http://uk.biz.yahoo.com/051208/94/fyt0o.html

Looks like the beginning of the credit crunch, oh and it comes just a few days after the SIPPS u-turn.

Oh dear, so much for the landlords who boasted that 0% yields weren't a problem because they were in it for the 'capital growth'

Edited December 8, 2005 by timmy_30

[Buddleia]

"The Portman, third largest buy-to-let lender in the UK, said it would avoid lending on new properties until “the market forces of supply and demand” had returned to equilibrium.The move by the group, which lends such mortgages through a subsidiary, The Mortgage Works, comes amid a 5.7 per cent fall in the price of new flats over the past year. Matthew Wyles, group development director at The Mortgage Works, said dubious valuations of new flats were becoming “endemic”. Valuation had become “more of an art than a science” because of the current oversupply of new flats."

http://uk.biz.yahoo.com/051208/94/fyt0o.html

Looks like the beginning of the credit crunch, oh and it comes just a few days after the SIPPS u-turn.

Oh dear, so much for the landlords who boasted that 0% yields weren't a problem because they were in it for the 'capital growth'

Lol ... I almost bought a 2-bed "luxury" newbuild flat in Wimbledon earlier this year and was put off the idea exactly ten minutes after finding HPC.co.uk. The Land Registry date came out (6 months later ) and shocked me:

The two-beds were being marketed for 320K ... I'd negotiated down to 285 before pulling out - and that was hard negotiation as well. Started low at 250K.

Some poor sods paid 300K and 305K.

But the last two-bed to go - identical to the others - was sold for 248K.

THAT'S SOME DISCOUNT!!!

I imagine it was the last unit in the block and the builder was desperate to get rid of it (and the pretty agent sitting in the show-flat all day). But the unjustness of it shocked me.

"Valutation an art, not a science": Absolutely.

[Casual Observer]

Lol ... I almost bought a 2-bed "luxury" newbuild flat in Wimbledon earlier this year and was put off the idea exactly ten minutes after finding HPC.co.uk. The Land Registry date came out (6 months later ) and shocked me:

The two-beds were being marketed for 320K ... I'd negotiated down to 285 before pulling out - and that was hard negotiation as well. Started low at 250K.

Some poor sods paid 300K and 305K.

But the last two-bed to go - identical to the others - was sold for 248K.

THAT'S SOME DISCOUNT!!!

I imagine it was the last unit in the block and the builder was desperate to get rid of it (and the pretty agent sitting in the show-flat all day). But the unjustness of it shocked me.

"Valutation an art, not a science": Absolutely.

I'd never buy a brand new property, not even in saner times. I reckon you always pay a premium.

[Europa]

Looks like the beginning of the credit crunch, oh and it comes just a few days after the SIPPS u-turn.

Oh dear, so much for the landlords who boasted that 0% yields weren't a problem because they were in it for the 'capital growth'

And this comes as Northern Rock starts to tighten its IO lending criteria by insisting that buyers have a plan in place to repay the capital (although God knows why its taken them this long to realise that it might be a problem.)

[Casual Observer]

And this comes as Northern Rock starts to tighten its IO lending criteria by insisting that buyers have a plan in place to repay the capital (although God knows why its taken them this long to realise that it might be a problem.)

In a rising market they're not going to be bothered, since they will be confident that the repossessed house would cover the loan. The fact that they no longer are confident is tantamount to them saying that they believe house prices are going to fall.

[JBFTB]

I like this one too (already in the blog at the top of the page):

http://investing.reuters.co.uk/news/newsAr...T-NEWBUILDS.xml

The bit I really like is this classic quote:

"Owing to the current over-supply of newly built property, valuation in this sector is more of an art than a science"

Over-supply? Why, I thought there was a shortage of property, if you listen to the tripe trotted out by the VIs?

[Sledgehead]

I like this one too (already in the blog at the top of the page):

http://investing.reuters.co.uk/news/newsAr...T-NEWBUILDS.xml

Err, that's the same story. The Portman owns The Mortgage Works.

This is also the same topic as brought to us by eagle eyed dogbox, here, a day or so ago and concerns the Portman's unwillingness to lend on new-builds because, amongst other things, the practice of gifting deposits.

Back in August of this year Dicky raised the topic of so called "gifted deposits", quoting from estateagencynews.co.uk:

"To help get the market moving again, we've been talking to our sellers whose properties have been on the market for a while and are ideal for first-time buyers. We've asked them to agree to pay a five per cent deposit to the buyer and in return this massive promotion will be highlighted in our branches, in the newspapers and in mail-outs. "

Here's what Dicky thought of this:

Call me cynical but isn't this exactly the same as reducing the price of the property by 5% to get a sale,

Here's what Wyles ( director of The Mortgage Works) is now willing to admit from the Reuters article:

"But in the meantime, the developer has agreed with the purchaser that the real price is - 212,500 pounds." - ie reduced

Here's what Dr Bubb and I thought of the practice of gifted deposits:

This leaves the banks financing more than they know, and may leave the buyer open to charges of fraud

163539[/snapback]

bang on

And here is what Wyles ( director of The Mortgage Works) is now willing to admit :

"... the lender finds itself financing 100 percent of the purchase price....In these cases the lender may be unaware of the actual price being paid and ends up relying on a valuation which may in turn be based on erroneous assumptions. "

And while we are blowing own trumpets, lets not forget this site's record on warning about trouble looming in general. Here's what Reuters is now willing to admit:

"When the professionals and lenders start to get worried, then something is usually going wrong."

So, trumpet blown. Now all you have to decide is whether the tune was the charge of the bulls or BTL last post.

Edited December 8, 2005 by Sledgehead

[JBFTB]

Err, that's the same story. The Portman owns The Mortgage Works.

Which is why I said already in the blog at the top of the page. I know. Jeez. The quote I was after was on THAT link that I posted though, not the OTHER one.

[Sledgehead]

Which is why I said already in the blog at the top of the page. I know. Jeez. The quote I was after was on THAT link that I posted though, not the OTHER one.

sorry. thought you meant subject matter rather than newspaper copy.

[underpressuretobuy]

I'd never buy a brand new property, not even in saner times. I reckon you always pay a premium.

According to my parents new property is always cheaper than older property of the same spec.

Where do they get these ideas?

[ʎqɐqɹǝʞɐɥs]

[Starcrossed]

This is big news!

[right_freds_dead]

hes back. wherev'e you been ?

[ʎqɐqɹǝʞɐɥs]

hes back. wherev'e you been ?

[right_freds_dead]

ahh [adopts south african accent]

yourer back et lest.

[Portent]

I felt it my duty to post the Times link to this story on the Channel4 Profit From Property forum

[Michael]

New build inner city yuppy flats are 50% overvalued and will plummet even if the rest market holds up

[George]

"The Portman, third largest buy-to-let lender in the UK, said it would avoid lending on new properties until “the market forces of supply and demand” had returned to equilibrium.The move by the group, which lends such mortgages through a subsidiary, The Mortgage Works, comes amid a 5.7 per cent fall in the price of new flats over the past year. Matthew Wyles, group development director at The Mortgage Works, said dubious valuations of new flats were becoming “endemic”. Valuation had become “more of an art than a science” because of the current oversupply of new flats."

http://uk.biz.yahoo.com/051208/94/fyt0o.html

Looks like the beginning of the credit crunch, oh and it comes just a few days after the SIPPS u-turn.

Oh dear, so much for the landlords who boasted that 0% yields weren't a problem because they were in it for the 'capital growth'

Talked about this for ages: equilbrium points in every market if set to high will kill demand.

[non-FTBer]

Bubb,

I think this is because most 'professionals' don't know what to do.

They must know prices are falling. But they are between a rock and a hard place.

If they don't over-value properties then the number of mortgages approved will plummet and so will their work.

This might be a short term effect, but I suspect it is one that they worry about, particularly when volumes of house sales have plummeted anyway in many areas.

[ajh]

According to my parents new property is always cheaper than older property of the same spec.

Where do they get these ideas?

That's been true where I live for 30 years!!

3 main reasons:

1. The older property is in a better location.

2. The cost of landscaping, floor coverings etc. etc. to turn a new build into an actual home.

3. When you buy an established property you have a chance to check how well it has stood up to being lived in. That is, any problems will have progressed enough to be visible.