Btl Scum Regrouping And On The Offensive. -- Merged

[Ah-so]

50 minutes ago, Noallegiance said:

As far as I can tell they're covering the BTL mortgage cost with our rent, with nowt left over.

I think they MEWd for their new place.

They wouldn't be the first landlords to tell their tenants that they do not make any money from the property. 

A few questions to work out if this is true:

What is their yield on the property? (Annual rent/price paid for property)

Do they use a managing agent? 

If they bought the property a couple of yeasts ago, rent would needed to have exceeded the mortgage by 25%. A two year BTL mortgage would probably have been around 4% when they got it, assuming at 75% LTV.

[lastlaugh]

11 hours ago, spyguy said:

The rentsl income will be taxed at 40%. They cannot offset the mortgage ir first.

Remortage depends on how much they borrowed and how much rent is. If they are nit making ant cash now then they wont be able to remortgage. Its unlikely any bank will want them.

Theyll be stuck on the banks svr, they be losing half the rent to tax.

The PRA rules don't apply to remortgaging ..... unless there is additional borrowing.  I would expect in practical terms this means a borrower would be stuck with the same lender.  And a lender might be inclined to enforce the PRA rules anyway, to smoke out the weak players.

[Ah-so]

11 hours ago, Noallegiance said:

As far as I can tell they're covering the BTL mortgage cost with our rent, with nowt left over.

I think they MEWd for their new place.

They wouldn't be the first landlords to tell their tenants that they do not make any money from the property. 

A few questions to work out if this is true:

What is their yield on the property? (Annual rent/price paid for property)

Do they use a managing agent? 

If they bought the property a couple of yeasts ago, rent would needed to have exceeded the mortgage by 25%. A two year BTL mortgage would probably have been around 4% when they got it, assuming at 75% LTV.

N.B. Duplicate post - the software has it in for me. 

[Ah-so]

24 minutes ago, lastlaugh said:

The PRA rules don't apply to remortgaging ..... unless there is additional borrowing.  I would expect in practical terms this means a borrower would be stuck with the same lender.  And a lender might be inclined to enforce the PRA rules anyway, to smoke out the weak players.

While they do not formally apply to remortgaging, a borrower's cash flows might have significantly worsened and lenders will want to take this into account. 

Most likely it may mean remaining in a lender's BTL SVR.

[spyguy]

1 hour ago, lastlaugh said:

The PRA rules don't apply to remortgaging ..... unless there is additional borrowing.  I would expect in practical terms this means a borrower would be stuck with the same lender.  And a lender might be inclined to enforce the PRA rules anyway, to smoke out the weak players.

My comments relate to a regulated bank just notwanting an underperforming io btl loan on their books.

Sure PRA allows a remortgage but the banks own loan unt/risk wont touch io btl now. They dont want to pick up someone elses dumb business.

Io btl are now stuck with an increasing small, less regulated banks. Theres nowhere for them to go. The svr for io btl will go up and up. More io btl will default, so the risk weighting goes up, so the svr goes up, so the risk weighting goes up, etc etc.

This less to do with the recent changes, and more to do with io btl being sold at residential oo risks rather than commercial, high leveraged loan rates.

Io btl is effectuvely a short term cimmercial bridging loand, and needs to be priced like one.

[Neverwhere]

21 hours ago, lastlaugh said:

Think that's about right.  And I am confident the borrowers will have to pay for the cost of the due diligence on themselves and on their properties.  It won't come cheap.  Remember all those fees last time you signed up for am AST?  Well this team there is real work to be done. 

I would expect something in the region of £2000 for an individual, and £1000 per property.  Thus a landlord with, say, 10 properties will be coughing up in the region of £10K just to have a mortgage application considered.  It''s going to be a huge brake on the appetite of portfolio landlords to expand.  I would go so far as to say they are out of the game.

And here comes a delicious twist in my reading of the PRA rules.

There is no recognition of equity.

The rules are purely a stress test of cashflow.  Landlords who are equity rich, but cashflow weak have a big problem.  Landlords who have built up equity in a large portfolio that just about washes its face (and I would argue that's most of them as that's the whole point, never use your own money, etc), can't remortgage to extract some of that equity to cover S24 costs.  The logic of the PRA rules forbid it.  Those landlords were doomed anyway in the long run.  But those that thought they had a good equity buffer and could string it out are just about to become forced sellers as soon as the tax bill lands on their mat.  And potential buyers will be even more thin on the ground because of ..... PRA rules.

Welcome to the Great BTL Unwind!

Can't count equity, and can't count (hypothetical) above inflation rent rises. They really are screwed.

[lastlaugh]

3 hours ago, Ah-so said:

While they do not formally apply to remortgaging, a borrower's cash flows might have significantly worsened and lenders will want to take this into account. 

Most likely it may mean remaining in a lender's BTL SVR.

I think you are probably right.  I don't think the lenders will be able to resist parking what are, effectively, their mortgage prisoners on their SVR.  The lenders will blame the regulator.  The regulator, in the wording of the PRA document, has already blamed the lender.

[Ah-so]

3 hours ago, lastlaugh said:

I think you are probably right.  I don't think the lenders will be able to resist parking what are, effectively, their mortgage prisoners on their SVR.  The lenders will blame the regulator.  The regulator, in the wording of the PRA document, has already blamed the lender.

And the FCA won't care - BTL is an unregulated product. 

[SOLZHENITSYN]

Has anyone ever checked out Gary Dully's facebook page? Here's a little extract from one of his rants about Theresa May & Philip Hammond...the guy's deranged; he doesn't sound fit to be responsible for tenants! 

 

 

[SOLZHENITSYN]

The "scruffy property" add is also up there in his page...

[SOLZHENITSYN]

Then this beauty on povertyl8r

 

"I fancied using a couple of billiard balls in a sock to enforce the eviction notice, but I now have to escalate to a bailiff or HCEO so that I can remain a fit and proper person."

https://www.property118.com/anyone-taken-another-landlord-court-loss-rent-due-tenant/93548/#comment-85465

 

[BorrowToLeech]

1 hour ago, SOLZHENITSYN said:

Then this beauty on povertyl8r

 

"I fancied using a couple of billiard balls in a sock to enforce the eviction notice, but I now have to escalate to a bailiff or HCEO so that I can remain a fit and proper person."

https://www.property118.com/anyone-taken-another-landlord-court-loss-rent-due-tenant/93548/#comment-85465

 

One of the many, many scandals of the housing market.  We let people unfit to be taxi drivers or childcare workers be responsible for family homes.  

How would you feel knowing that one of those disgusting scumbags has the keys to your daughters house?

Given the weak position of tenants, I suspect the number of unreported crimes by landlords is astronomical. 

[Venger]

 

 

Quote

 

C.L. Thanks for sharing this. As I was out Christmas shopping I was accosted by a rep. for a legal firm targetting older folk ( I guess I fitted the target group by appearance alone and was too slow to avert my gaze. I had several very good reasons to have a ponderous look about me, last minute shopping without a carefully thought out list of requirements because have been to busy fighting section 24 and worrying about my tenants). She was offering a free 1 hr consultation to discuss what I might be able to do to stop the government seizing my home to fund my impending likely need for institutional care. They’re taking 1,000 a week at present is I think what she said!!!

[...]I did not engage. Why should I tell this stranger that I am worried about the other dozen or so that are being taken from me now and complicate it by mentioning tenants who will have nowhere to go.

Waiting for the penny to drop may be preceded by a currency change.

 

 

Not taking from my point of view - the NHS part free as I understand it - but residential stay costing money - although a sensitive subject.

And what has been the average weekly rate of homes that have been seized by BTLers from would-be buyers, with so much outbidding younger would-be renter savers along the way to keep them in private rented sector?   Selling homes to pay for care fees, if considered the way some view it, just a microcosm vs BTL taking homes imo.

Newspaper June 2015 :  Since 2010, 1.6 million buy-to-let mortgages have been bought, totalling £188 Billion of approved loans.

Tenants with nowhere to go if/when landlords sell up - lol.   

Don't want to focus on any one BTLer, but as I recall it, there are at least 11 homes laid claim to by this one BTLer + his own home on top.  How can any BTLer be in a position where a simple 'levelling the playing ground tweak' between BTLers and would-be younger renters-savers who want to buy, got themselves into a position where they are concerned, with debt claims on multiple homes.   Were they blind to the advantages many older BTLers have over younger people (MEW to deposits on HPI mad-gainz + ridiculously extreme tax advantages).  

No one asked any of them to take the world view they exist to provide other people with homes, while they set themselves up in glorious isolation with all the rent-rolls and the capital gainz, and all the homes!   It has to be one of the biggest cringes ever thrown up by the universe.  If some of the BTLers lose their multi-home portfolios and end up rented themselves, well it's good enough life for many on HPC and Generation Rent generally, they feel.  Cheer up and think about not having to pay care home fees yourself, with no assets or money left, vs homes going to younger people at much lower prices.

Meanwhile MK Dong, on another BTL forum, gets frustrated that his tenants come up short of rent in December/January, so they can buy something for their own families.

[spyguy]

2 hours ago, Venger said:

 

 

 

Not taking from my point of view - the NHS part free as I understand it - but residential stay costing money - although a sensitive subject.

And what has been the average weekly rate of homes that have been seized by BTLers from would-be buyers, with so much outbidding younger would-be renter savers along the way to keep them in private rented sector?   Selling homes to pay for care fees, if considered the way some view it, just a microcosm vs BTL taking homes imo.

Newspaper June 2015 :  Since 2010, 1.6 million buy-to-let mortgages have been bought, totalling £188 Billion of approved loans.

Tenants with nowhere to go if/when landlords sell up - lol.   

Don't want to focus on any one BTLer, but as I recall it, there are at least 11 homes laid claim to by this one BTLer + his own home on top.  How can any BTLer be in a position where a simple 'levelling the playing ground tweak' between BTLers and would-be younger renters-savers who want to buy, got themselves into a position where they are concerned, with debt claims on multiple homes.   Were they blind to the advantages many older BTLers have over younger people (MEW to deposits on HPI mad-gainz + ridiculously extreme tax advantages).  

No one asked any of them to take the world view they exist to provide other people with homes, while they set themselves up in glorious isolation with all the rent-rolls and the capital gainz, and all the homes!   It has to be one of the biggest cringes ever thrown up by the universe.  If some of the BTLers lose their multi-home portfolios and end up rented themselves, well it's good enough life for many on HPC and Generation Rent generally, they feel.  Cheer up and think about not having to pay care home fees yourself, with no assets or money left, vs homes going to younger people at much lower prices.

Meanwhile MK Dong, on another BTL forum, gets frustrated that his tenants come up short of rent in December/January, so they can buy something for their own families.

Which doesnt bode well for rising rents, does it?

 

[mathschoc]

BTL scum meeting and tactics with MP's

 

[thewig]

7 hours ago, spyguy said:

Which doesnt bode well for rising rents, does it?

 

Just bang em up, evict anyone who squeals innit.

 

[Ah-so]

18 hours ago, BuyToLeech said:

 

How would you feel knowing that one of those disgusting scumbags has the keys to your daughters house?

Yet some landlords feel entitled to retain the keys to their properties and are scandalised to hear that tenants have the legal right to change the locks and not give them a key. What disgusting self-entitlement. Again, it shows that they do not see themselves as housing providers, but as lords.

It also shows a lack of very basic knowledge about the law relating to being a landlord. A very common trait. 

r u sure tenant can change locks? i think not!

https://www.property118.com/cant-get-rental-property-due-domestic-violence-team-putting-mortice-locks-alarms/93316/

[Venger]

7 hours ago, spyguy said:

Which doesnt bode well for rising rents, does it?

A few of the BTLers beginning to get it.

Quote

 

3 Dec at 09:47 
This was discussed here:

Changing landlord dynamics & rent rises 

I agree with John that highly leveraged landlords (HLL) affected by S24 may not be simply able to "raise rents" unless they have not raised them for some considerable time and therefore have quite a bit of headroom.

Next year will be dog eat dog for landlords as unencumbered and incorporated landlords will be able to undercut HLL landlords, which makes HLL landlords very vulnerable to increased voids.  Raising rents is not a cure-all to S24.  All other options and avenues should be explored without relying on it.

http://www.propertytribes.com/www.propertytribes.com/why-59-pcm-tax-costs-tenant-99-pcm-t-127627553.html

 

Although still reading BTLers going on about 'countrywide national Section 21 day', and other BTLerswho see nothing but rising rents for tenants 'low-debt/unencumbered LLs will also hike' rents to 'take general further advantage of renters'.  

In there, some BTLers concerned about losing their ownership claims on 11 house 'portfolios'.

11 houses, debt-on-debt claims, egos where they really believe themselves to be 'providers of housing' vs these prices - and providing for their own futures - and some people think I'm annoyed over nothing - that we're moaners who can afford to buy just because 'we can afford to rent' means 'you can afford to buy'.     Cycloptic market view from offtopic.  Explains a lot.   Glad you're staying in o/t if you think those on HP&TE moan over nothing.  (It's not a car forum - discussing house prices seems quite reasonable on a housing forum - if you think house prices are affordable that's your market view.).  

Many can't afford to buy simply because they can afford the monthly rent (deposit), and some just refuse to borrow/pay these prices.   And at these prices, now with fear rippling through the BTLers and so much good policy changes set to bite.  And it's more than just looking at market as individuals - it is a cause for some of us, wanting opportunity for other people, and injustices caused by BTL VI and housing financialisation, multiple home possession by debt, with house prices at such high levels to incomes.

@mathschoc - I see one of them has high hopes of SDLT surcharge and S24 being totally reversed - 'because it doesn't make sense'.  A lot doesn't make sense from those on mad-gainz/comfort side of things.

[btd1981]

Sorry if more appropriate for anecdotals, but just had a new rental notification from Rightmove for a house in Basingstoke. Seems to be going rate and proclaims 'no fees'. That's pretty good in it's own right, but the best part: they've also had to reduce

[mathschoc]

17 minutes ago, btd1981 said:

Sorry if more appropriate for anecdotals, but just had a new rental notification from Rightmove for a house in Basingstoke. Seems to be going rate and proclaims 'no fees'. That's pretty good in it's own right, but the best part: they've also had to reduce

??pop

[Ah-so]

Busta has finally revealed the secrets of his emigration strategy - the one that was going to be sold in a £1000 book (subsequently reduced to £10 and finally withdrawn ).

 

Here it is:

Another very popular exit (or cash extraction) strategy involves emigration to a tax haven. I personally emigrated to Malta in Feb 2016. Once you become resident in Malta you can create a Maltese holding company and sell shares in your U.K. Company to your new Maltese holding company CGT free. The cash in your U.K. company can then be transferred to the holding company tax free. The advantage of doing this is that holding companies in Malta can distribute funds to shareholders who are residents of Malta free of dividend tax. In other words, you can actually have your cake and eat it, regardless of whether you sell up or not. Obviously there are several business and personal considerations before emigrating but do consider it if you’re fed up of the UK tax system and want to protect your next egg.

https://www.property118.com/tax-advantagesdisadvantages-selling-property-company-vs-selling-properties-individually/93592/

[spyguy]

6 minutes ago, Ah-so said:

Busta has finally revealed the secrets of his emigration strategy - the one that was going to be sold in a £1000 book (subsequently reduced to £10 and finally withdrawn ).

 

Here it is:

Another very popular exit (or cash extraction) strategy involves emigration to a tax haven. I personally emigrated to Malta in Feb 2016. Once you become resident in Malta you can create a Maltese holding company and sell shares in your U.K. Company to your new Maltese holding company CGT free. The cash in your U.K. company can then be transferred to the holding company tax free. The advantage of doing this is that holding companies in Malta can distribute funds to shareholders who are residents of Malta free of dividend tax. In other words, you can actually have your cake and eat it, regardless of whether you sell up or not. Obviously there are several business and personal considerations before emigrating but do consider it if you’re fed up of the UK tax system and want to protect your next egg.

https://www.property118.com/tax-advantagesdisadvantages-selling-property-company-vs-selling-properties-individually/93592/

You can set up a company. No problems.

You cannot pay rents on properties, owned by an individual to a company.

He'll have a problem with the mortgage T+Cs *AND* HMRC tax evasion on this.

[btd1981]

What if you want to protect your present egg, not your next one?

[oatbake]

He must be pretty sure of his tax avoidance strategy to publicly announce the details when it is so easy for somebody to report him to HMRC. Either that, or extremely stupid...

[Digsby]

32 minutes ago, oatbake said:

He must be pretty sure of his tax avoidance strategy to publicly announce the details when it is so easy for somebody to report him to HMRC. Either that, or extremely stupid...

I was out with the missus in the car earlier, when she tutted "look at that truck spilling its load all over the road". "Yes dear," I replied, "gritters are meant to do that.".

There are many words I could use to describe my wife, and many I could use to describe Busta and his chums.

Sadly, "observant" makes neither list.