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TheCountOfNowhere

The greatest thread of all...The BTL running for the exit thread

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1 hour ago, Freki said:

Interesting that HTB ISA would have such an effect. I was suspecting it ( I am in this case as well), but not to that described extent.

The Help To Buy ISAs aren't having that effect. Those are just savings accounts.

It's the Help To Buy "free give from taxpayers" scheme. Not the ISAs!

 

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2 hours ago, Voice of Doom said:

This is a quote from a local article on the market. The article also states bugger all is selling.

One local property practitioner who asked not to be named said, "Help To Buy is significantly distorting the market at the moment. It is artificially inflating the price of flats up to the limit of £450,000 but making any unit in the range above that practically unsellable. Only 3 out of the 60 or so flats sold so far this year were for prices between £450,000 and £500,000.

http://www.actonw3.com/property/stats1905.htm

Thanks for that quote, VOD!

His use of the word "but" is very revealing.

"It is artificially inflating the price of flats.... but making any unit in the range above that practically unsellable" implies that the first thing is ok, and not the second thing.

Surely he means "It is artificially inflating the price of flats.... AND making any unit in the range above that practically unsellable"

 

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1 hour ago, mrtickle said:

Thanks for that quote, VOD!

His use of the word "but" is very revealing.

"It is artificially inflating the price of flats.... but making any unit in the range above that practically unsellable" implies that the first thing is ok, and not the second thing.

Surely he means "It is artificially inflating the price of flats.... AND making any unit in the range above that practically unsellable"

 

That is a good spot! 

I expect to have more grim/great news from this neck of the woods in West London soon.

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2 hours ago, mrtickle said:

The Help To Buy ISAs aren't having that effect. Those are just savings accounts.

It's the Help To Buy "free give from taxpayers" scheme. Not the ISAs!

2nd hand property having a ceiling at 450k is a sign it was referenced to the HTB ISA. It is the limit at which you can get the 25% bonus. Otherwise in London HTB loan scheme works up to 600k

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15 hours ago, Freki said:

2nd hand property having a ceiling at 450k is a sign it was referenced to the HTB ISA. It is the limit at which you can get the 25% bonus. Otherwise in London HTB loan scheme works up to 600k

Ah, fair enough.

Of course the idea that if you have nearly half a million pounds, you still need "help" to buy your first ever house speaks for itself.

 

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1 hour ago, mrtickle said:

Ah, fair enough.

Of course the idea that if you have nearly half a million pounds, you still need "help" to buy your first ever house speaks for itself.

 

Sadly we are so used to craziness that you have to point it out!

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Most suitbale thread.

Less BTL running for exit ... BTLers bank running for the exit.

The ongoing fup that is Metro bank - search the forum for other posts.

SP crashing. Fup its risk weighting.

Metro Bank explores sale of a chunk of loans hit by accounting error

https://www.ft.com/content/0cf6b3a0-7255-11e9-bf5c-6eeb837566c5


The accounting error involved large numbers of commercial property and professional buy-to-let loans. Because of the mistake, Metro found it did not have as much capital against them as it should have done.

Basically, MB hovvered up a load of junk BTL loans and priced them too wrong.

As Ive kept repeating - IO BTL is a non amortising commercial loan and needs to be charge 3-4% a *month* compounding.

By pro BTL Id guess they mean 5+ BTL rather than any competence/training.

 

 

 

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1 hour ago, spyguy said:

Most suitbale thread.

Less BTL running for exit ... BTLers bank running for the exit.

The ongoing fup that is Metro bank - search the forum for other posts.

SP crashing. Fup its risk weighting.

Metro Bank explores sale of a chunk of loans hit by accounting error

https://www.ft.com/content/0cf6b3a0-7255-11e9-bf5c-6eeb837566c5


The accounting error involved large numbers of commercial property and professional buy-to-let loans. Because of the mistake, Metro found it did not have as much capital against them as it should have done.

giphy.gif

1 hour ago, spyguy said:

By pro BTL Id guess they mean 5+ BTL rather than any competence/training.

AIUI they mean BTL loans to limited companies.

(Their error being that they risk weighted them as if they were BTL loans to private individuals.)

1 hour ago, spyguy said:

Basically, MB hovvered up a load of junk BTL loans and priced them too wrong.

As Ive kept repeating - IO BTL is a non amortising commercial loan and needs to be charge 3-4% a *month* compounding.

Exactly this.

They seem to have already withdrawn their limited company BTL products in the wake of the error because it turns out they just weren't profitable when risk weighted correctly:

Doesn't exactly bode well for any BTLers trying, foolishly, to escape the tax changes via transfer into a limited company structure ;)

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Happy to see banks paying the price for pricing people out of home ownership. But dont get why the hell should the politicians and regulator need these many f***ing years to do it. 

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1 hour ago, Neverwhere said:

giphy.gif

AIUI they mean BTL loans to limited companies.

(Their error being that they risk weighted them as if they were BTL loans to private individuals.)

Exactly this.

They seem to have already withdrawn their limited company BTL products in the wake of the error because it turns out they just weren't profitable when risk weighted correctly:

Doesn't exactly bode well for any BTLers trying, foolishly, to escape the tax changes via transfer into a limited company structure ;)

I would not assume anything with banks esp. challenger/challenged ones. Ive long assumed that the finsec is idiots all the way down.

Their business seems to be buying loan books off PE/VC for 50% more than the PE/VC bought them. Then selling them back at 50% of the price they paid.

 

 

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The big risk for MrNMrs 'I understand properdee/Me pension' is remortgaging.

We must be getting towards the end of appetite/funding new IO BTL finance.

Interesting that ~12 months after the voodoo ftard of FLS ended, banks have lost their appetite for BTL.

CHoices for BTL are a) sell b) accept a 8%+ SVR + lower LTV

 

 

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11 hours ago, spyguy said:

I would not assume anything with banks esp. challenger/challenged ones. Ive long assumed that the finsec is idiots all the way down.

Their business seems to be buying loan books off PE/VC for 50% more than the PE/VC bought them. Then selling them back at 50% of the price they paid.

It's the move in the risk weights (from 35%, which IIRC would be the correct RW for a residential BTL loan to a private individual, up to 100%) and the withdrawal of the limited company products that makes me think they priced up a load of limited company BTL loans as if they were standard BTL loans to individuals (probably marvelling at how much smarter they were than everybody else who wasn't expanding into this area of lending :rolleyes:) and have since found out that - shockingly - they weren't actually as profitable as they supposed.

As you say, idiots all the way down.

Quote

Metro Bank Plunges on Misclassified Assets, Capital Concern

The bank previously put a 50 percent risk weighting on its commercial mortgages, but said it has now increased this to the correct level of 100 percent, a spokesperson for the lender said. For buy-to-let mortgages, the portfolio had been held at a risk weighting of 35 percent, but this has also been increased to 100 percent.

 

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11 hours ago, spyguy said:

The big risk for MrNMrs 'I understand properdee/Me pension' is remortgaging.

We must be getting towards the end of appetite/funding new IO BTL finance.

Interesting that ~12 months after the voodoo ftard of FLS ended, banks have lost their appetite for BTL.

CHoices for BTL are a) sell b) accept a 8%+ SVR + lower LTV

Potentially quite a few who can afford to do neither, i.e. can't sell at a price that would cover their outstanding debts and tax obligations, and don't have the additional cash to lower their LTV or pay a higher rate of interest.

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9 hours ago, Neverwhere said:

It's the move in the risk weights (from 35%, which IIRC would be the correct RW for a residential BTL loan to a private individual, up to 100%) and the withdrawal of the limited company products that makes me think they priced up a load of limited company BTL loans as if they were standard BTL loans to individuals (probably marvelling at how much smarter they were than everybody else who wasn't expanding into this area of lending :rolleyes:) and have since found out that - shockingly - they weren't actually as profitable as they supposed.

As you say, idiots all the way down.

 

The bank previously put a 50 percent risk weighting on its commercial mortgages, but said it has now increased this to the correct level of 100 percent, a spokesperson for the lender said. For buy-to-let mortgages, the portfolio had been held at a risk weighting of 35 percent, but this has also been increased to 100 percent.

Chose to?

Or had to?

Are banks being made to weight  BTL - LtdCo or ManPa - exactly the same as commercial lending?

Which, frankly, is what BTL lending is.

Its hard to get a good idea of the supply of BTL credit. First there was TFS/FLS which distorted the price and supply of credit.

Then we've got the challenger banks who've been lending like idiots.

Are ManPa BTL slumlord going to find there is limited supply of BTL loan when their super-low discount period ends?

Probably.

Seriously, BTL are going to be remortgaging via a payday loan cheque casher

 

 

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10 minutes ago, Freki said:

They gambled all their savings on this. Ridiculous. Greater fool was found

Nice to see the price has not cleared out all morons.

 

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12 hours ago, spyguy said:

The bank previously put a 50 percent risk weighting on its commercial mortgages, but said it has now increased this to the correct level of 100 percent, a spokesperson for the lender said. For buy-to-let mortgages, the portfolio had been held at a risk weighting of 35 percent, but this has also been increased to 100 percent.

Chose to?

Or had to?

Looks like had to:

Quote

Metro admits truth over loans error: Regulator NOT bank discovered accounting error as chief exec claimed

Metro Bank was forced to come clean about an accounting error after it was discovered by regulators – not by the bank's own staff, as its chief executive had claimed.

The lender last week admitted it underestimated the risk in a string of commercial and buy-to-let property loans, a mistake which could force it to raise another £300million from investors.

Boss Craig Donaldson said the problem was flagged up by an internal review, after an auditor checked its books late last year.

But the Mail can reveal that the error, which sent shares crashing 39 per cent, was in fact first identified by the Prudential Regulation Authority arm of the Bank of England responsible for overseeing the health of major lenders.

Sources said the issue was spotted during a PRA review of lending which flagged up inconsistencies in accounts.

 

12 hours ago, spyguy said:

Are banks being made to weight  BTL - LtdCo or ManPa - exactly the same as commercial lending?

Which, frankly, is what BTL lending is.

Its hard to get a good idea of the supply of BTL credit. First there was TFS/FLS which distorted the price and supply of credit.

Then we've got the challenger banks who've been lending like idiots.

It seems that whatever those loans are they now have the same risk-weight as commercial real estate (i.e. 100%) in which case it would make sense if they were Ltd BTL (as above) but there could be alternative explanations?

12 hours ago, spyguy said:

Are ManPa BTL slumlord going to find there is limited supply of BTL loan when their super-low discount period ends?

Probably.

Seriously, BTL are going to be remortgaging via a payday loan cheque casher

:D

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13 hours ago, SOLZHENITSYN said:

What an absolute numpty! You’ll all enjoy this little read....

Serious lack of brain cells in this PovertyL8r 

 

https://www.property118.com/back-successful-bid-auction-property/

I liked this bit ...

"There is a new school which has been built just next to this block of flats which may give boost little bit to the property."

Er no mate, the last thing most people want is to have to keep their windows closed 2 hours a day because of screaming kids 

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1 hour ago, goldbug9999 said:

I liked this bit ...

"There is a new school which has been built just next to this block of flats which may give boost little bit to the property."

Er no mate, the last thing most people want is to have to keep their windows closed 2 hours a day because of screaming kids 

you never know maybe a gary glitter fan could move in nearer to the action some things you just cant put a price on. 😉

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Landlords find profits are on the slide when selling up

https://www.propertyindustryeye.com/landlords-find-profits-are-on-the-slide-when-selling-up/

The average landlord who sold a buy-to-let property last year made nearly £80,000 pre-tax profit – less than in previous years.

On average, the landlord had owned the property for 9.6 years.

While 85% of landlords selling up made a profit, 15% made a loss, according to Hamptons International.

Last year’s average pre-tax profits were £3,660 (4.4%) less than in 2017.

The biggest profits were made by landlords selling up in London, who saw pre-tax profits of £248,120. This was on average £24,000 less than in 2017.

The average pre-tax profit earned by a landlord who sold up fell in five out of ten regions between 2018 and 2017 as house price growth slowed.

Landlords who sold their buy-to-let in the north-east made the smallest average gain at £11,810, £4,270 less than in 2017.

There were four local authorities in England and Wales where landlords were more likely to sell their buy-to-let for less than they paid for it last year – South Tyneside, Sunderland, Darlington and Middlesbrough.

Landlords who do make a profit when they sell a buy-to-let property have to pay Capital Gains Tax. On an average profit of £80,000, this would likely be in the region of £19,000.

Hamptons estimates that since 2016 nearly 120,000 landlords have sold up and left the industry.

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2 hours ago, rantnrave said:

Landlords find profits are on the slide when selling up

https://www.propertyindustryeye.com/landlords-find-profits-are-on-the-slide-when-selling-up/

The average landlord who sold a buy-to-let property last year made nearly £80,000 pre-tax profit – less than in previous years.

On average, the landlord had owned the property for 9.6 years.

While 85% of landlords selling up made a profit, 15% made a loss, according to Hamptons International.

Last year’s average pre-tax profits were £3,660 (4.4%) less than in 2017.

The biggest profits were made by landlords selling up in London, who saw pre-tax profits of £248,120. This was on average £24,000 less than in 2017.

The average pre-tax profit earned by a landlord who sold up fell in five out of ten regions between 2018 and 2017 as house price growth slowed.

Landlords who sold their buy-to-let in the north-east made the smallest average gain at £11,810, £4,270 less than in 2017.

There were four local authorities in England and Wales where landlords were more likely to sell their buy-to-let for less than they paid for it last year – South Tyneside, Sunderland, Darlington and Middlesbrough.

Landlords who do make a profit when they sell a buy-to-let property have to pay Capital Gains Tax. On an average profit of £80,000, this would likely be in the region of £19,000.

Hamptons estimates that since 2016 nearly 120,000 landlords have sold up and left the industry.

£80K in 10 years is quite good if they didn't do too much work.  Of course the relevant figure is post tax profit.

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  • 242 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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