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jan81

Consultation On Bank Of England Powers Over Buy To Let Market Has Started

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In total, 6% of all private landlords own five or more dwellings each, and they account for around 40% of the stock of PRS properties

This explains the panic on the borrow to let forums

6% hold 2.8 million houses ...oh dear

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This explains the panic on the borrow to let forums

6% hold 2.8 million houses ...oh dear

That number is the concentration of the PRS, not the leveraged part. Leveraged part is only 40% of the whole PRS. I am not aware of any good data on the concentration of ownership in the leveraged part of the PRS.

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They say that the report is not about house prices, but risk to financial stability. Powers that they want are control of loan to value ratio and the interest coverage rate.



"Research by the CBI finds that the share of buy-to-let borrowers in the market is positively correlated with a measure of house price overvaluation. House price overvaluation may lead to an unsustainable increase in household indebtedness by all mortgagors."

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I think BTL loans will be regulated and become more of an even playing field with owner purchaser occupiers.....one buying owner= one vote.....buying/owning more than one property=one vote.......millions of renters and priced outers = millions of votes. ;)

Edit:......owners who once could buy their own home and seeing their children and grandchildren priced out even more votes.

Edited by winkie

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That number is the concentration of the PRS, not the leveraged part. Leveraged part is only 40% of the whole PRS. I am not aware of any good data on the concentration of ownership in the leveraged part of the PRS.

My bad correct as ever

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Surely it will go back to landlords being the cash rich people they used to be, not idiots leveraged up to 100% making money out of peoples misery, subsidised by government money and tax relief on their borrowing. These idiots are also making gains doing little work and putting the taxpayer and banks on the hook if it all goes tits up, which it will do again for sure.

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i think the BOE will act. The 2016/2017 recession will be bad enough without all the feckless BTLers taking out a few banks. So with only 6 months to spread the BTL fire-selling they need to clear a load from the system ASAP.

I have noticed today a few houses suddenly come up for sale with sitting tenants, perhaps this is the tip of an iceberg. the sharp edge of a big wedge, if the first lot obvious BTL are only just coming to the market now it seems a delay of a few weeks from realisation to selling, the next few months are going to see volumes increase and harsh price cutting.

when the big mass hits the markets sometime in 2016/2017 it will be carnage. The perfect storm for a HPC caused by BTL panic.

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Surely it will go back to landlords being the cash rich people they used to be, not idiots leveraged up to 100% making money out of peoples misery, subsidised by government money and tax relief on their borrowing. These idiots are also making gains doing little work and putting the taxpayer and banks on the hook if it all goes tits up, which it will do again for sure.

In short, yes.

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Interesting material...the highlight for me is the idea to implement the requirement that rental income needs to cover interest payments based on 5% with a factor of 1.25, which they say is already being used by some providers.

For an average rent approaching £1000 this requirement means that the max interest that can be payed on an interest only mortgage is £800 a month. This means that the max BTL mortgage on an average property is 192k. With an 80 LTV ratio that would mean that the average BTL property needs to be £240k. Seems substantially lower to me than the asking prices I see for properties that could attract this level of rental income.

btw) only thing I really don't understand is why they aim to exclude newbuilds from this requirement. That seems bonkers to me.

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