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TheCountOfNowhere

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

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6 minutes ago, TheCountOfNowhere said:

It's always struck me that BTLs are particularly stupid...they're buying houses for someone else to live in, massive wear and tear, no upkeep, then they think 30 years later it'll be worth a fortune.

When the correction comes, all the badly maintained BTLs will be worthless.

 

And in areas that many potential homeowners won't want to live.

 

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11 hours ago, doahh said:

That's a interesting point. I would say that:

  • The IO loan is wiped out by the purchaser, which is deflationary;
  • The cash buyer does not replace the IO loan as the money already exists, giving a relatively big deflation effect;
  • The OO using capital repayment does replace the IO loan but slowly pays it down which is deflationary over the mortgage term.

A significant proportion of BTL cash purchases are financed with second loans against other properties. Inflationary.

House price crashes devastate bank profits and stock market valuations potentially leading to large, sustained capital losses. The prospect of capital losses mandates a reduction in lending activity to households and businesses, and margin calls on cash borrowers. Massively deflationary.

 

m4-money-supply-since-05-600x495.png

 

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21 minutes ago, thomasthetanker said:

Anyone seen this- you can now invest your ISA  in a lender who specialises in bridging loans and Buy to Let Mortgages!!

https://landlordinvest.com/ifisa

https://www.theguardian.com/money/2017/feb/18/innovative-finance-isa-tax-free-high-returns-risky

"innovative finance".

Desperate finance more like.

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Here's another heading for the exit. It's a discrace really but...

:lol:

Hi guys, would welcome your expert opinion please.

We originally had 5 buy to lets and never made a penny out of any of them.  Our strategy was simple - they would wash their faces in the short term and increase in value in the long term, at which time we would cash out and create some pension income.  However, their value has decreased instead of increasing. 

We managed to sell 2 as they became empty, spent all our savings doing them up, but still sold at a loss.  Property 3 is now empty, needs a total refurb (which we don’t have the money for) and is in negative equity.

We are now retired so extending the term of the mortgages isn’t an option for us, even if we could find a lender who still does interest-only buy to let mortgages to the over 70s!

We are extremely tempted by a delayed completion deal we have been offered.  To be honest we just want out and a hassle-free retirement.  Is this the only way forward for us?

http://www.propertytribes.com/interest-only-buy-lets-coming-an-end-t-127628560.html

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1 hour ago, Lavalas said:

Here's another heading for the exit. It's a discrace really but...

:lol:

 

 

Haha DEBTjunkie ****wittery at its finest. I'm guessing these scumbags didn't read the Ros report or something. 

Edited by thewig

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4 hours ago, Lavalas said:

Here's another heading for the exit. It's a discrace really but...

:lol:

 

 

"We've already lost what little savings we had.  And still have an interest-only mortgage on our own home which should have been cleared when the buy to lets increased in value."

These people are totally screwed. As an aside, I hate the term "washing its face" when used to describe something that could be somebody's home. Ugh.

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On 23/02/2017 at 11:13 AM, Patient London FTB said:

 

I came across this stat in Savills' latest research, published today: 

"Outstanding levels of mortgage debt have risen by just 10% (£120 billion) over the past five years. By contrast, the level of privately held housing equity has risen by a chunky 49% in the same period."

Housing equity figures like that are entirely misleading.

Consider an estate of 100 houses all built in 2010 and sold for £100,000k.7 years later(2017) they've all doubled in value even though only ten have been bought and sold but the average sale price was £200,000.

Then recession hits,three sell for £100,000 and pretty much all the equity is gone.

 

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*** Fantastic Investment Opportunity *** should read *** Fantasy Investment Opportunity ***.  "Oppurtunity"?  "Accademic" year? But photo 8 shows the potential with these properties, at least 2 more bedrooms can be fitted in there.  Although maybe that is already accounted for by the increase from 20 to 23 bedrooms between the headline and the text?

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On ‎24‎/‎02‎/‎2017 at 9:36 PM, oatbake said:

"We've already lost what little savings we had.  And still have an interest-only mortgage on our own home which should have been cleared when the buy to lets increased in value."

These people are totally screwed. As an aside, I hate the term "washing its face" when used to describe something that could be somebody's home. Ugh.

Even funnier:

"I'm hoping that missold mortgages may be the next PPI.  Everyone realises now that an interest only mortgage without a repayment vehicle in place is a disaster waiting to happen.  Thankfully our lenders didn't take a charge over our home but presumably they would be entitled to take one to cover the shortfall?  I'm not sure what their appetite towards a shortfall arrangement is as we still have a few years to go and I don't want to rock the boat unnecessarily."

So if they lose money (and their home), it's all someone else's fault, and they should be entitled to compensation.

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On Mon Feb 27 2017 at 1:27 PM, TheCountOfNowhere said:

I did the sums. Roughly.

If I put £400k down, I can get a BTL 25 year mortgage on 2.2% interest only, that's £34k a year. Still leaves me with £100k to play with coming in.

Let's say £10k to cover costs / voids, so £90k coming in.

Pre-S24 income after tax around £62k largely sat on my backside.

Post-S24 income around £43k, sat on my backside.

No hope of repaying the principle unless that's a second income, in which case, tax goes up a fair bit.

If its a second income / retirement plan (pwopurdee is my pension!) Then more likey ti be on repayment over 25 years - mortgage is £84k a year. Leaves £42k, still a nice little pwopurtee income when taxed pre-S24.

Post-S24, its a whopper sized tax bill that leaves me with only £12k a year in my pocket.  Boo hoo.

If it's mortgaged with 10% down instead of 20% then it all looks a lot worse and turns negative.

Run Forsest Run indeed.

S24 is a poor substitute for an interest rate rise, and has perhaps been announced in recognition that low rates are here for the long haul - that hadn't occured to me in those terms before. 

If that 2.2% mortgage rate I used became 4.2% there is (wait for it)

A £31k per annum INCREASE in the interest. That's a lot more powerful downward pressure.

 

 

Edited by disenfranchised

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On 27/02/2017 at 3:53 PM, disenfranchised said:

buy to let not dead....just had the people with the REAL money pull up the drawbridge on everybody else, that's all.

those who had feck all to begin with have lost a smaller percentage of feck all than the guys who thought they were in the premier league with half a dozen hovels.

 

these guys just have to get used to not being top of the food chain.......actually being fattened up for slaughter is a better analogy.

Edited by oracle

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On 27/02/2017 at 8:34 PM, Dyson Fury said:

Even funnier:

"I'm hoping that missold mortgages may be the next PPI.  Everyone realises now that an interest only mortgage without a repayment vehicle in place is a disaster waiting to happen.  Thankfully our lenders didn't take a charge over our home but presumably they would be entitled to take one to cover the shortfall?  I'm not sure what their appetite towards a shortfall arrangement is as we still have a few years to go and I don't want to rock the boat unnecessarily."

So if they lose money (and their home), it's all someone else's fault, and they should be entitled to compensation.

+1

now how long ago were we saying this?..I've been on here since 2005!:rolleyes:

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37 minutes ago, oracle said:

+1

now how long ago were we saying this?..I've been on here since 2005!:rolleyes:

Always someone else's fault....then the solicitors and spivs can sue someone with money.

 

Gun man kills 30 in Tunisia and the spivs say its the government/travel agents to blame. NO IT WAS THE LOON WITH THE GUN or their own fault for going.

 

Sue the gun man.    

 

They don't want to admit that tho do they?

 

I hate living in the 51st state of america now, I miss living in the UK.

Edited by TheCountOfNowhere

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On 27/02/2017 at 3:53 PM, disenfranchised said:

'Beth is correct BTL is still as viable as it ever was

Just not for LL with mortgages in their own names'

I wait being told how my dog can take out a BTL mortgage.

Are these people fcking morons?

 

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On 27/02/2017 at 8:34 PM, Dyson Fury said:

Even funnier:

"I'm hoping that missold mortgages may be the next PPI.  Everyone realises now that an interest only mortgage without a repayment vehicle in place is a disaster waiting to happen.  Thankfully our lenders didn't take a charge over our home but presumably they would be entitled to take one to cover the shortfall?  I'm not sure what their appetite towards a shortfall arrangement is as we still have a few years to go and I don't want to rock the boat unnecessarily."

So if they lose money (and their home), it's all someone else's fault, and they should be entitled to compensation.

In the unlikely event that they could convince a jury that they did not understand waht IO meant.

The ythen face the hurdle of that BTL is a commercial  not a consumer product.

The T+Cs - which, being business men - theyll have read state that. And the finacial regulated understand that.

A BTL loan is taken on the assumption the mortgagee and banks are peers and will pay for their own advice.

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2 hours ago, disenfranchised said:

I did the sums. Roughly.

If I put £400k down, I can get a BTL 25 year mortgage on 2.2% interest only, that's £34k a year. Still leaves me with £100k to play with coming in.

Let's say £10k to cover costs / voids, so £90k coming in.

Pre-S24 income after tax around £62k largely sat on my backside.

Post-S24 income around £43k, sat on my backside.

No hope of repaying the principle unless that's a second income, in which case, tax goes up a fair bit.

If its a second income / retirement plan (pwopurdee is my pension!) Then more likey ti be on repayment over 25 years - mortgage is £84k a year. Leaves £42k, still a nice little pwopurtee income when taxed pre-S24.

Post-S24, its a whopper sized tax bill that leaves me with only £12k a year in my pocket.  Boo hoo.

If it's mortgaged with 10% down instead of 20% then it all looks a lot worse and turns negative.

Run Forsest Run indeed.

S24 is a poor substitute for an interest rate rise, and has perhaps been announced in recognition that low rates are here for the long haul - that hadn't occured to me in those terms before. 

If that 2.2% mortgage rate I used became 4.2% there is (wait for it)

A £31k per annum INCREASE in the interest. That's a lot more powerful downward pressure.

 

 

No Basel 3 will push up the IR on IO BTL without a base rate rise.

Then  theyll get a base rate rise. Anything over a 3% BoE base will see BTL collapse.

 

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On 24/02/2017 at 9:26 AM, thomasthetanker said:

Anyone seen this- you can now invest your ISA  in a lender who specialises in bridging loans and Buy to Let Mortgages!!

https://landlordinvest.com/ifisa

https://www.theguardian.com/money/2017/feb/18/innovative-finance-isa-tax-free-high-returns-risky

BTL and Bridge Lending are completely different beasts. Bridge lenders lend to mainly professional developers at 12-15% rate secured at 60-75% LTV.

I.e. high return at low risk.

BTL is 75% LTV at 3-4% return. 

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15 minutes ago, Peter Hun said:

BTL and Bridge Lending are completely different beasts. Bridge lenders lend to mainly professional developers at 12-15% rate secured at 60-75% LTV.

I.e. high return at low risk.

BTL is 75% LTV at 3-4% return. 

One of my arguments against IO BTL is that an IO BTL, in terms of risk, is nothing more than a commercial bridging loan and should be charged at 10-13%.

 

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3 hours ago, spyguy said:

No Basel 3 will push up the IR on IO BTL without a base rate rise.

Why should Basel III affect lending rates to that extent in future when most banks in the UK were at or near their tier 1 capital adequacy target in 2015? 2% fixed for 2 years is a typical BTL deal, what makes it 3%?

Do you think Basel III will increase wider demand for credit that cheap liquidity no longer exists to meet?

Wouldn't that depend who has the keys to Merv's printer? 

Edited by disenfranchised

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  • 240 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% +
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      • Even
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      • up 5%



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