Btl Scum Regrouping And On The Offensive. -- Merged

[Ah-so]

2 hours ago, spyguy said:

Charts of rent falls do not show the biggy, which is left unrecorded - voids.

Rents are falling as places are sat, unlet, for a substantial time.

Getting ~£50/m less is less important then the loss of ~£900/m rent payments for 2 to 3 months.

Voids kill (leveraged) LLs way before falling rents do.

Joe IOBTL will be repo is he misses 2 months BTL payments.

True about voids but the repo will take longer - banks do not recognise 2 months arrears as default but rather a warning sign, even on BTL.

[spyguy]

52 minutes ago, Ah-so said:

True about voids but the repo will take longer - banks do not recognise 2 months arrears as default but rather a warning sign, even on BTL.

Not sure.

Btl is unregulated, not consumer lending. Banks will repo asap or force a consolidation. Banks will not ignore 2months of missed payments.

[Patient London FTB]

2 hours ago, Ah-so said:

True about voids but the repo will take longer - banks do not recognise 2 months arrears as default but rather a warning sign, even on BTL.

1 hour ago, spyguy said:

Banks will repo asap or force a consolidation. Banks will not ignore 2months of missed payments.

On this subject who else reads this quote from NatWest's senior economist as an attempt to push to dilute the rules governing how much time lenders can wait before repo'ing BTLs? It's garbled, but he seems to be saying that he thinks they shouldn't have to move so quickly in future. 

As the private rental sector grows Burnside said the UK needs to rethink its repossession strategy with private landlords who fail to keep up with their mortgage payments.

Currently banks are more lenient with homeowners than landlords and Burnside felt this needs to change.

He added: “As a private sector landlord if you stop paying that’s a matter of months [before the property is repossessed], not years, and that’s ‘okay’ if you’re talking about people who are fleet of foot and can move easily.

“It’s less obviously okay from a society perspective if you’ve got kids at school and ties with the community and we haven’t changed the way that works since the 70s.

“It doesn’t feel to me that just keeping everything the same and just carrying on is a very sustainable solution.”

Source

 

[Si1]

2 minutes ago, Patient London FTB said:

On this subject who else reads this quote from NatWest's senior economist as an attempt to push to dilute the rules governing how much time lenders can wait before repo'ing BTLs? It's garbled, but he seems to be saying that he thinks they shouldn't have to move so quickly in future. 

As the private rental sector grows Burnside said the UK needs to rethink its repossession strategy with private landlords who fail to keep up with their mortgage payments.

Currently banks are more lenient with homeowners than landlords and Burnside felt this needs to change.

He added: “As a private sector landlord if you stop paying that’s a matter of months [before the property is repossessed], not years, and that’s ‘okay’ if you’re talking about people who are fleet of foot and can move easily.

“It’s less obviously okay from a society perspective if you’ve got kids at school and ties with the community and we haven’t changed the way that works since the 70s.

“It doesn’t feel to me that just keeping everything the same and just carrying on is a very sustainable solution.”

Source

 

RBS NatWest still part-nationalised?

[spyguy]

2 minutes ago, Patient London FTB said:

On this subject who else reads this quote from NatWest's senior economist as an attempt to push to dilute the rules governing how much time lenders can wait before repo'ing BTLs? It's garbled, but he seems to be saying that he thinks they shouldn't have to move so quickly in future. 

As the private rental sector grows Burnside said the UK needs to rethink its repossession strategy with private landlords who fail to keep up with their mortgage payments.

Currently banks are more lenient with homeowners than landlords and Burnside felt this needs to change.

He added: “As a private sector landlord if you stop paying that’s a matter of months [before the property is repossessed], not years, and that’s ‘okay’ if you’re talking about people who are fleet of foot and can move easily.

“It’s less obviously okay from a society perspective if you’ve got kids at school and ties with the community and we haven’t changed the way that works since the 70s.

“It doesn’t feel to me that just keeping everything the same and just carrying on is a very sustainable solution.”

Source

 

Thats not so much not repoing. Its what you do with the tenants.

You could make a case that, where the BTL is occupied, the tenant can stay there for 6 months will the bank has possession.

My understanding is that banks are very keen to repo BTL. And Id guess most repos will come about then the property is empty, or where the tenant has stopped paying rent.

 

[london_thirtythree]

51 minutes ago, Patient London FTB said:

On this subject who else reads this quote from NatWest's senior economist as an attempt to push to dilute the rules governing how much time lenders can wait before repo'ing BTLs? It's garbled, but he seems to be saying that he thinks they shouldn't have to move so quickly in future. 

As the private rental sector grows Burnside said the UK needs to rethink its repossession strategy with private landlords who fail to keep up with their mortgage payments.

Currently banks are more lenient with homeowners than landlords and Burnside felt this needs to change.

He added: “As a private sector landlord if you stop paying that’s a matter of months [before the property is repossessed], not years, and that’s ‘okay’ if you’re talking about people who are fleet of foot and can move easily.

“It’s less obviously okay from a society perspective if you’ve got kids at school and ties with the community and we haven’t changed the way that works since the 70s.

“It doesn’t feel to me that just keeping everything the same and just carrying on is a very sustainable solution.”

Source

 

The problem with this line of thinking is that a BTL Landlord heading for Repossession will usually end up there one way or the other - the Lender's do not want to repossess at all, so payment plans will be arranged, and the repo delayed and delayed; but typically it will end up happening. (have some stats somewhere, but generally is like a ship starting to sink, might survive a few near misses to give a bit of hope but tends to end up sinking in the end)

I think this is because an individual with a personal mortgage has options to try and change their life over and keep to a repayment plan, whereas BTL is a business that has hit the rocks and is difficult to turn around.

It's not like the Landlord can manage by just cutting their personal consumption, they have to make a failing asset become revenue generating, and its a house which is not exactly the most dynamic business asset.

I would suggest that for tenanted BTLs then there should maybe be a process where the Lender and Tenant work something out without repossessing to kick the Tenant out - but otherwise pandering to borrowers who cannot pay their mortgage is usually just a stopgap that will make the problem worse. (as brutal and unfortunate as that might be)

[Si1]

10 minutes ago, london_thirtythree said:

The problem with this line of thinking is that a BTL Landlord heading for Repossession will usually end up there one way or the other - the Lender's do not want to repossess at all, so payment plans will be arranged, and the repo delayed and delayed; but typically it will end up happening. (have some stats somewhere, but generally is like a ship starting to sink, might survive a few near misses to give a bit of hope but tends to end up sinking in the end)

I think this is because an individual with a personal mortgage has options to try and change their life over and keep to a repayment plan, whereas BTL is a business that has hit the rocks and is difficult to turn around.

It's not like the Landlord can manage by just cutting their personal consumption, they have to make a failing asset become revenue generating, and its a house which is not exactly the most dynamic business asset.

I would suggest that for tenanted BTLs then there should maybe be a process where the Lender and Tenant work something out without repossessing to kick the Tenant out - but otherwise pandering to borrowers who cannot pay their mortgage is usually just a stopgap that will make the problem worse. (as brutal and unfortunate as that might be)

If the tenant is on an AST then they still have the term of that AST, don't they?

[Bland Unsight]

1 hour ago, Patient London FTB said:

On this subject who else reads this quote from NatWest's senior economist as an attempt to push to dilute the rules governing how much time lenders can wait before repo'ing BTLs? It's garbled, but he seems to be saying that he thinks they shouldn't have to move so quickly in future. 

[snip]

Good find. You didn't see anything like this when BTL landlords were using the threat of section 21 notices to push up rents .  Quite striking to find them talking openly about managing a flood of BTL repossessions given the current level of the relevant stats.

Source: Mortgage and Landlord Possession Statistics in England and Wales, April to June 2017 (Provisional)

There are consequences for capital adequacy ratios if the banks start holding large volumes of non-performing loans on their balance sheets

 

[Bland Unsight]

2 minutes ago, Si1 said:

If the tenant is on an AST then they still have the term of that AST, don't they?

There's a whole regime to handle exactly this, as best I understand matters; LPA receiver of rent.

[Exiled Canadian]

13 minutes ago, london_thirtythree said:

The problem with this line of thinking is that a BTL Landlord heading for Repossession will usually end up there one way or the other - the Lender's do not want to repossess at all, so payment plans will be arranged, and the repo delayed and delayed; but typically it will end up happening. (have some stats somewhere, but generally is like a ship starting to sink, might survive a few near misses to give a bit of hope but tends to end up sinking in the end)

I think this is because an individual with a personal mortgage has options to try and change their life over and keep to a repayment plan, whereas BTL is a business that has hit the rocks and is difficult to turn around.

It's not like the Landlord can manage by just cutting their personal consumption, they have to make a failing asset become revenue generating, and its a house which is not exactly the most dynamic business asset.

I would suggest that for tenanted BTLs then there should maybe be a process where the Lender and Tenant work something out without repossessing to kick the Tenant out - but otherwise pandering to borrowers who cannot pay their mortgage is usually just a stopgap that will make the problem worse. (as brutal and unfortunate as that might be)

Why not give tenant the option to buy the house for the value of the o/s mortgage (provided they are not in default on the rent).  Good outcome for all - tenant gets to stay in home, bank gets money back, landlord personal assets not at risk from lender.

[Patient London FTB]

7 minutes ago, Beary McBearface said:

There's a whole regime to handle exactly this, as best I understand matters; LPA receiver of rent.

Does the lender have the ability to extend the tenant's AST, do we know?

[Bland Unsight]

21 minutes ago, Patient London FTB said:

Does the lender have the ability to extend the tenant's AST, do we know?

No idea. Good question though.

[Patient London FTB]

Just now, Beary McBearface said:

No idea. Good question though.

I think there's a key difference between one scenario in which banks expect the landlord to go under due to the tougher borrowing climate but the tenants to stay in situ with healthy finances, and another scenario in which the tenants lose their jobs and can't pay the rent. Maybe NatWest guy is imagining the first will happen and trying to think of ways to amend regulations to ensure they keep the rental payments stream and don't have to sell the property?

[Bland Unsight]

2 minutes ago, Patient London FTB said:

I think there's a key difference between one scenario in which banks expect the landlord to go under due to the tougher borrowing climate but the tenants to stay in situ with healthy finances, and another scenario in which the tenants lose their jobs and can't pay the rent. Maybe NatWest guy is imagining the first will happen and trying to think of ways to amend regulations to ensure they keep the rental payments stream and don't have to sell the property?

Agreed.

The entry of £225bn of leverage into the PRS in the last twenty or so years changes the consequences of rents adjusting down when the economy falters. It will hit bank balance sheets in a way that it would not have previously; previously only trouble in the owner-occupier sector eventually bled through into defaults on lending.

The leverage represents a commitment for rents to operate at this level. If they adjust down, it's ugly in a way it simply wasn't prior to the entry of all the mug leverage.

Nice over-arching story about can kicking here. The rise of consent-to-let and then buy-to-let from 1996 onwards is at least in part a response to the lenders experience of the aftermath of the 1989 bust. The dramatic fall in interest rates post-2008 means that the buy-to-let sector has not yet been crash tested. The only market view we have on buy-to-let was the wholesale money markets closing to Bradford & Bingley in 2008.

One to watch, but for the time being at least the idea of the banks sitting on a million or so home to postpone acknowledging some lending losses is too far into the dystopian/conspiracy theory realm for my tastes at present. The banks can take the hit. 

[Blod]

1 hour ago, Exiled Canadian said:

Why not give tenant the option to buy the house for the value of the o/s mortgage (provided they are not in default on the rent).  Good outcome for all - tenant gets to stay in home, bank gets money back, landlord personal assets not at risk from lender.

Few if any BTL mortgages are on repayment terms so they would hope to be facing the original amount borrowed. It might work for some but I would hazard a guess that most repoed BTL properties will have been mewed and so the tenant would struggle on a repayment mortgage. It is that discrepancy in repayments that haunts the banks. Those repoed BTL properties are facing the reality that there are too few OOs able to fund repayment mortgages on them.

[Lavalas]

Ros Becks latest assault in her war against intelligence is going to be an article on the measures we can take to make it easier for FTB to get on the housing ladder...

https://m.facebook.com/groups/371572042862286?view=permalink&id=1684863798199764&ref=content_filter

I'm going to stick my neck out and predict that repealing S24 will be one of the main things the government should do.

[Pop321]

7 hours ago, Lavalas said:

Ros Becks latest assault in her war against intelligence is going to be an article on the measures we can take to make it easier for FTB to get on the housing ladder...

https://m.facebook.com/groups/371572042862286?view=permalink&id=1684863798199764&ref=content_filter

I'm going to stick my neck out and predict that repealing S24 will be one of the main things the government should do.

Great spot...and I have a sneaky feeling you may be right. Although there might be more adds: 

Remove ALL tax from LLs and reduce all the regulation and red tape. Then the LLs can charge tenants less (yes, even less than the massively under charging already taking place by many benevolent 118'ers) and then the tenant can save for a deposit...sorted.

Any overall tax loss will be made up with all the extra BnQ sales (only LL's shop at BnQ) and that generates tax. And if the government needs more tax they can always ask fireman, nurses and the workers to pay a bit more...they contribute so little to the UK.

Vote Ros....the home provider and housing champion. ?

[Lavalas]

1 hour ago, Phil321 said:

Great spot...and I have a sneaky feeling you may be right. Although there might be more adds: 

Remove ALL tax from LLs and reduce all the regulation and red tape. Then the LLs can charge tenants less (yes, even less than the massively under charging already taking place by many benevolent 118'ers) and then the tenant can save for a deposit...sorted.

Any overall tax loss will be made up with all the extra BnQ sales (only LL's shop at BnQ) and that generates tax. And if the government needs more tax they can always ask fireman, nurses and the workers to pay a bit more...they contribute so little to the UK.

Vote Ros....the home provider and housing champion. ?

Yes! Very good calls. Keep landlord costs down (as we know that housing was cheap as chips before S24). I definitely expect to see 'As the LSE study shows, Landlords only add 7% to property prices' to feature pretty early on in the article. Also maybe a general tone of 'most young people want flexibility/iPhones/avocados instead of the responsibility of (saving for) a mortgage and also my grand parents lived in a small shed and they were happy.

[Patient London FTB]

9 hours ago, Lavalas said:

Ros Becks latest assault in her war against intelligence is going to be an article on the measures we can take to make it easier for FTB to get on the housing ladder...

https://m.facebook.com/groups/371572042862286?view=permalink&id=1684863798199764&ref=content_filter

I'm going to stick my neck out and predict that repealing S24 will be one of the main things the government should do.

Talking of taking the biscuit cheeky asks ahead of the Budget, I give you the list of the National Landlords Association's 11 (eleven!) "recommendations". 

1. Embark on an immediate review of the removal of finance cost relief for private landlords. 

2. Introduce a package of Capital Gains Tax reduction measures to encourage the sale of: 
   1. 1. 1. 1. Poorly performing investment properties. 
            2. Properties where the proceeds of the sale will be entirely reinvested into the lettings business. 
            3. Properties invested in, and utilised, for a period of more than 10 years. 
            4. Properties that are eligible and suitable for sale to existing tenants. 

3. Introduce measures to facilitate the tax-efficient movement of a letting portfolio into a corporate structure. 

4. Establish a government-backed investment vehicle to allow the sale of properties into a managed fund. 

5. Reintroduce the Landlords’ Energy Saving Allowance (LESA), and establish a level sufficient to improve the tax efficiency of carrying out relevant works.

6. Set LESA at a level sufficient to improve the tax efficiency of carrying out works

7. Fund the expansion of Help to Rent nationwide

8. Establish a national deposit guarantee scheme for the private rented sector

9. Remove the Capital Gains Tax surcharge for property sales

10. Introduce Capital Gains Tax tapering and business asset rollover relief for private residential property which is let.

11. Abolish the Stamp Duty Land Tax levy on additional property

[london_thirtythree]

45 minutes ago, Patient London FTB said:

Talking of taking the biscuit cheeky asks ahead of the Budget, I give you the list of the National Landlords Association's 11 (eleven!) "recommendations". 

1. Embark on an immediate review of the removal of finance cost relief for private landlords. 

2. Introduce a package of Capital Gains Tax reduction measures to encourage the sale of: 
   1. 1. 1. 1. Poorly performing investment properties. 
            2. Properties where the proceeds of the sale will be entirely reinvested into the lettings business. 
            3. Properties invested in, and utilised, for a period of more than 10 years. 
            4. Properties that are eligible and suitable for sale to existing tenants. 

3. Introduce measures to facilitate the tax-efficient movement of a letting portfolio into a corporate structure. 

4. Establish a government-backed investment vehicle to allow the sale of properties into a managed fund. 

5. Reintroduce the Landlords’ Energy Saving Allowance (LESA), and establish a level sufficient to improve the tax efficiency of carrying out relevant works.

6. Set LESA at a level sufficient to improve the tax efficiency of carrying out works

7. Fund the expansion of Help to Rent nationwide

8. Establish a national deposit guarantee scheme for the private rented sector

9. Remove the Capital Gains Tax surcharge for property sales

10. Introduce Capital Gains Tax tapering and business asset rollover relief for private residential property which is let.

11. Abolish the Stamp Duty Land Tax levy on additional property

Suppose with our current topsy turvy times, anything is possible, but seems highly unlikely that the Tory Government would introduce S24 and 2nd Home Stamp Duty and then remove them a year or two later.

So think the NLA would be better pitching at things they might get, rather than asking the government to commit u-turns.

[Houdini]

40 minutes ago, Patient London FTB said:

Talking of taking the biscuit cheeky asks ahead of the Budget, I give you the list of the National Landlords Association's 11 (eleven!) "recommendations". 

1. Embark on an immediate review of the removal of finance cost relief for private landlords. 

2. Introduce a package of Capital Gains Tax reduction measures to encourage the sale of: 
   1. 1. 1. 1. Poorly performing investment properties. 
            2. Properties where the proceeds of the sale will be entirely reinvested into the lettings business. 
            3. Properties invested in, and utilised, for a period of more than 10 years. 
            4. Properties that are eligible and suitable for sale to existing tenants. 

3. Introduce measures to facilitate the tax-efficient movement of a letting portfolio into a corporate structure. 

4. Establish a government-backed investment vehicle to allow the sale of properties into a managed fund. 

5. Reintroduce the Landlords’ Energy Saving Allowance (LESA), and establish a level sufficient to improve the tax efficiency of carrying out relevant works.

6. Set LESA at a level sufficient to improve the tax efficiency of carrying out works

7. Fund the expansion of Help to Rent nationwide

8. Establish a national deposit guarantee scheme for the private rented sector

9. Remove the Capital Gains Tax surcharge for property sales

10. Introduce Capital Gains Tax tapering and business asset rollover relief for private residential property which is let.

11. Abolish the Stamp Duty Land Tax levy on additional property

Is there anything there that isn't screaming our taxes are too high - yet prices are still too high for most people to buy. 

So lets look at those again:-

1) remove all finance cost relief so mortgage interest is treated the same for both owner occupiers and landlords - even playing field

2-7) No 

3,4 are please help us its unfair (tantrum with tears emoji required)

8) Seems reasonable

9-11) No

I actually think things like this do more harm than good and show that the changes are working (albeit not well or quickly enough)..

 

 

 

 

[Will!]

Telegraph:  Buy-to-let investors condemn Corbyn's rent-cap proposal as a 'disaster for tenants'

I see Shelter have managed to be on the wrong side of the argument again.

[Barnsey]

And another...

'Buy-to-let tax changes will cost me £20k a year – this is what I'm going to do' http://www.telegraph.co.uk/investing/buy-to-let/buy-to-let-tax-changes-will-cost-20k-year-this-going-do/

‘Mr Hughes believes many of the changes will be reversed. He explained: “Basically what this has done is destabilised the rental market and that will need to be addressed.” He cited the example of Ireland, which recently overturned similar changes first introduced in 1998.’

[spyguy]

20 minutes ago, Barnsey said:

And another...

'Buy-to-let tax changes will cost me £20k a year – this is what I'm going to do' http://www.telegraph.co.uk/investing/buy-to-let/buy-to-let-tax-changes-will-cost-20k-year-this-going-do/

‘Mr Hughes believes many of the changes will be reversed. He explained: “Basically what this has done is destabilised the rental market and that will need to be addressed.” He cited the example of Ireland, which recently overturned similar changes first introduced in 1998.’

Great journalism there.

14 residential in berks surrey....

Estimates 9m....

Whats the leverage? Are they io only??

If all 14 are io then hes looking at more than 14-20k in tax.

As far as putting rents up,  yeah, good luck.

These sort of articles are pointless. Vague, no detail. Just let the LL spout ******.

As far as the other 2...

Google the 2nd one. Hmo bond backed inveztments.

3rd one found transferring into a ltco very expensive. Again another rent raiser.

[doahh]

The first guy looks like he is trying to be a little lord of the manor. He has a stags head on the wall, a British flag cushion and a table in the form of a butler holding a tray.

Quote

Robert Hughes, 52, has invested in property since 1994. He has a varied portfolio comprising 14 residential properties in Surrey, Berkshire, London and the Cotswolds; three penthouse flats in the Estonian capital Tallinn; 42 acres of UK farmland and four garage lock-ups. He values the total at £9m.

If we include the garages he has 23 properties accrued over 23 years, so 1 per year. I doubt that he has 'earned' the money to pay the deposit on the next investment. He has almost certainly mew'ed, a theory further supported by the fact that a £9m 'empire' cannot afford an additional £20k in costs. Let's call him Mr. Bankrupt Walking.

The second guys photo is pretty odd, looks like he has been Photoshop'ed.

Quote

Mr Rothwell, who operates using a company called Empire Property Concepts, now owns about 1,000 properties nationwide.

...

“I haven’t bought anything in my personal name for more than a year,” he explained.

..

“I started out buying in my personal name and I did that for a number of years. More recently, just from a tax perspective and a lending perspective, it’s made more sense to buy in a limited company.”

Holy crapola! Nothing in his name for more than a whole year ... sounds like he has at least one hundred properties in his own name ... let's call him Mr. Dead Man Walking.

Quote

Craig Scott-Dawkins thinks rent rises will be widespread ...

He owns eight apartments and five houses, all of which are rented out, but he has drastically changed how he does business. “I won’t be buying any more properties in my own name,” he explained.

Mr Scott-Dawkins has taken the unusual step of transferring two of his properties from his own name into a company, but he said this had worked out to be “very expensive”.

Congrats to the people on this board (not me) who correctly analysed this issue way before any landlord ever did. Sounds like he is Tucked as well.

Other than that I agree with spyguy, the article would have been better with more figures about income and LTV. More landlords who can't see the problem even though it is their 'business' to do so. May they merrily go bust and work on the Tesco tills till they die.

Edited October 1, 2017 by doahh