Mumsnet Poster Not Getting The Rent Paid In Full And Not Happy

[Bland Unsight]

It really should not have happened. I mean, building socieities lending IO loans to BTLers - its not what BS were designed for!

And the issue that the likes of Nationwide are screwed when it comes to raising new capital.

2008 should have seen the BoE go 'This is nuts!' Get all your BTL on a repayment basis. Raise he IR until they leave, pay back the loan or go bust.

As discussed on here before, it is possible that Donald Kohn came pretty close to spelling out their f**k-up at the Treasury Committee in July 2014 (IIRC on the date) with his safety valve that isn't safe comments; under this interpretation the Bank as regulator did nothing about mug BTL because they thought that MMR would precipitate a market correction and that BTL would just 'catch a falling knife' but get washed out of the market by the experience of investors making losses. When MMR implementation has no such affect, the BoE start looking at BTL more carefully, and then the knives come out. Speculation, of course.

I think BTL is now about £250bn of the £1,300bn lending stock. Unbelievable.

[Blod]

It really should not have happened. I mean, building socieities lending IO loans to BTLers - its not what BS were designed for!

And the issue that the likes of Nationwide are screwed when it comes to raising new capital.

2008 should have seen the BoE go 'This is nuts!' Get all your BTL on a repayment basis. Raise he IR until they leave, pay back the loan or go bust.

It would have solved many problems however the immediate effects on the wider economy, politically could be tolerated by the likes of Brown/Bush. Their focus is always short term☹️

[Steppenpig]

I think BTL is now about £250bn of the £1,300bn lending stock. Unbelievable.

That'll be another 50% of gdp we taxpayers have to pay out to rescue the banks again when house prices halve.

[Neverwhere]

That'll be another 50% of gdp we taxpayers have to pay out to rescue the banks again when house prices halve.

Post-financial crisis mainstream lenders seem to have been concentrating their BTL lending on small portfolio landlords who have other assets (their own homes) and other income streams, in which case the BTLers themselves can eat the losses. Smaller, specialist BTL lenders are not systemically important and so can be allowed to go to the wall. Hopefully BTL specifically will at least not get bailed out for a second time.

[Bland Unsight]

That'll be another 50% of gdp we taxpayers have to pay out to rescue the banks again when house prices halve.

Falling house prices do not cause bank insolvency. If people can pay their mortgages, they do. I am not aware of any connection between negative equity and arrears, but always happy to learn if other know different.

Bradford & Bingley faced arrears because their customers, the leveraged landlords, were facing tenant arrears and voids. Rental demand is much more volatile than some leveraged landlords seem to think.

BTL may be big enough to drive prices. We will soon have some suggestive evidence to the truth of that contention, if BTL demand now collapses. However, whilst a recession and a crash in house prices might represent a threat to some of the smaller lenders who have become focussed in that sector, it won't put a scratch on Lloyds or RBS. The banks can take the evisceration of the BTL muppets - depend on it.

[justthisbloke]

FWIW, I've just read the entire mumsnet thread. What a bunch of nasty, bad mannered people.

[spyguy]

FWIW, I've just read the entire mumsnet thread. What a bunch of nasty, bad mannered people.

Join in the fun:

http://www.housepricecrash.co.uk/forum/index.php?/topic/147969-deluded-old-scrapper-birds-on-dating-sites/page-604

....

(Not that the offtopic-ers are dating nay mumsnetter, not that theyve mentioned it. Of the DH! Oh the MIL! DS! DD! Err other?)

[sPinwheel]

FWIW, I've just read the entire mumsnet thread. What a bunch of nasty, bad mannered people.

YABU

[olde guto]

Falling house prices do not cause bank insolvency. If people can pay their mortgages, they do. I am not aware of any connection between negative equity and arrears, but always happy to learn if other know different.

Bradford & Bingley faced arrears because their customers, the leveraged landlords, were facing tenant arrears and voids. Rental demand is much more volatile than some leveraged landlords seem to think.

BTL may be big enough to drive prices. We will soon have some suggestive evidence to the truth of that contention, if BTL demand now collapses. However, whilst a recession and a crash in house prices might represent a threat to some of the smaller lenders who have become focussed in that sector, it won't put a scratch on Lloyds or RBS. The banks can take the evisceration of the BTL muppets - depend on it.

Darn right, Osborne would never have risked the recent anti-BTL tax changes if there was a serious risk of banks going under (unless he'd totally lost plot). They can repossess and put a charge on the BTL LL main home if needs be.

[spyguy]

Falling house prices do not cause bank insolvency. If people can pay their mortgages, they do. I am not aware of any connection between negative equity and arrears, but always happy to learn if other know different.

Bradford & Bingley faced arrears because their customers, the leveraged landlords, were facing tenant arrears and voids. Rental demand is much more volatile than some leveraged landlords seem to think.

BTL may be big enough to drive prices. We will soon have some suggestive evidence to the truth of that contention, if BTL demand now collapses. However, whilst a recession and a crash in house prices might represent a threat to some of the smaller lenders who have become focussed in that sector, it won't put a scratch on Lloyds or RBS. The banks can take the evisceration of the BTL muppets - depend on it.

From memory - and Im not sure if the definitive, or even un-definitive, story of B+B has writte - but I think it was combination of rents defaulting and having to roll-over a lot of short term debt.

B+B was wierd. It lasted about a year more than NR. The share price fell, and fell and fell. Then they nationalised it.

[SarahBell]

YABU

OFFIHNIWYM

[Bland Unsight]

OFFIHNIWYM

I'm going to need a clue on that.

OAARTFATIIG

[Simon Taylor]

The only regulation banks need is self regulation and criminal action if they break the laws.

We have neither hence we're the way we are

Quite. Criminal law if they act illegally and the insolvency laws if they are law abiding but incompetent.

[spunko2010]

EWCM

[Killer Bunny]

Not true. Markets are incapable of self regulation. Bigger players squeeze out or take over their smaller rivals then imitate each other. Because they share the same structural shortcomings, when one fails they all fail. Result: systemic collapse.

Effective criminal action might help reduce the propensity to take risks.

Is true. Banks are toast. Let them go bust. They'll rein in lending till they're on sounder footing.

[Bloo Loo]

Falling house prices do not cause bank insolvency. If people can pay their mortgages, they do. I am not aware of any connection between negative equity and arrears, but always happy to learn if other know different.

Bradford & Bingley faced arrears because their customers, the leveraged landlords, were facing tenant arrears and voids. Rental demand is much more volatile than some leveraged landlords seem to think.

BTL may be big enough to drive prices. We will soon have some suggestive evidence to the truth of that contention, if BTL demand now collapses. However, whilst a recession and a crash in house prices might represent a threat to some of the smaller lenders who have become focussed in that sector, it won't put a scratch on Lloyds or RBS. The banks can take the evisceration of the BTL muppets - depend on it.

It can, due to the supposed regulation on banks...which looks at the balance sheet on the day and sees if the assets cover the liabilities.

Somewhere on that balance sheet includes the value of security on the loan book (LTV) and how far it covers the loans in the event of a fire sale. A loan with LTV 50% is worth more sold than one which is underwater in the event of a default.

Hence, the stress tests include a HPC of say, 30%, to see how the value of assets looks on open market.

[SarahBell]

I'm going to need a clue on that.

OAARTFATIIG

I think it was oh for f sake I have no idea what that means (Or something like that)

[TheCountOfNowhere]

FWIW, I've just read the entire mumsnet thread. What a bunch of nasty, bad mannered people.

If you'd given birth, you would be too.

[TheCountOfNowhere]

Is true. Banks are toast. Let them go bust. They'll rein in lending till they're on sounder footing.

Should have happened in 2007 but I suspect the whole system was a goner then.

No we've had 10 years almost of QE/FLS/Big deposits/foreign money.

Like Venger, I suspect they know the market has to crash and (most) of the banks will survive, not all lthe B.S. will tho.