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fru-gal

"Lenders in crackdown on 'secret' buy-to-lets"

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What's a secret buy to let, someone who has a resedential mortage, borrows against the house, rents it out and buy another one ?

Should be very very easy to detect, surely such checks were already in place...:lol:

 

Could see a lot ogf BTLers severly f**ked when they're forced onto a SVR BTL mortgage at 4% rather than a subprime idiot loan at 2%

 

Someone, somewhere, wants the BTL "industry"  to die

Edited by TheCountOfNowhere

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P.S. I think Venger/Eric will have a good chuckle at this one.

 

The liars should be punished and what better punishment than loosing it all and having to rent.

 

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Very much doubt they are having a ''crackdown''... as long as the mortgage is getting paid I'm sure the lenders are willing to turn a blind eye to the minor details.

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20 minutes ago, TheCountOfNowhere said:

What's a secret buy to let, someone who has a resedential mortage, borrows against the house, rents it out and buy another one ?

 

Could it be someone who secretly runs they UK btl empire from Malta? Or someone who's secretly a consumer for the auspices of their mortgage T&C's but a professional for hmrc?

 

The mind boggles.

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"House price growth has slowed to zero nationally and prices in many regions are now falling outright."

 

If/when they do raise IRs, it's going to be carnage.

ANyone stupid enough to buy into this at the current peaks are going to loose 50-100% of everything. 

Shame

The MSM narrative has most definitely changed.

 

 

P.S.  Some real bear food in that article
 

"One solution for some desperate sellers"

 

 

"Dunstan Low is one frustrated home seller who has turned his back on traditional sales routes in favour of a raffle.

The decision followed months of battling to sell his six-bedroom manor house in Lancashire, where it was most recently listed for £845,000 in December 2016."

 

Wont drop the price ?

"Having failed to find a buyer he and his wife are now in arrears with their mortgage. They need to raise the greatest possible sum as soon as they can."

CAN'T DROP THE PRICE, or not willing to accept the loss.

Some proper bear food in that article.

These people must be desperate.

You can enter the competition for free by sending them a letter...I'm surprised people are giving them £2.

These peolpe have bought a house they cant afford at a time of record low interest rates, I personally am duisgusted by such greedy desperate ****s.

Looking around Lancaster there are some truly massive drops on these big houses!!!

 

500K off:

http://www.rightmove.co.uk/property-for-sale/property-46817268.html

450K off:

http://www.rightmove.co.uk/property-for-sale/property-55505902.html

The London boom never made it that far north.

£605K off  !!!: Initial listing 2012 !!!

http://www.rightmove.co.uk/property-for-sale/property-36026413.html

 

400K off:

http://www.rightmove.co.uk/property-for-sale/property-10458183.html

 

350K off:

http://www.rightmove.co.uk/property-for-sale/property-39404247.html

 

The prices still look like fantasy.  I'm amazed the places that are for ale for 800K+, some of them you'd not buy them for those prices in the S.E :lol;

 

 

 

 

 

Edited by TheCountOfNowhere

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7 hours ago, nome said:

Very much doubt they are having a ''crackdown''... as long as the mortgage is getting paid I'm sure the lenders are willing to turn a blind eye to the minor details.

This.

I have only read the first bit of the article (paywall innit) but my understanding is BTLers just inform the lender that they want to let it out, then, most of the time, the lender's send a letter back saying "OK".

This is Consent to Let and is a convenient loophole for landlords.

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2 hours ago, Drummer said:

This.

I have only read the first bit of the article (paywall innit) but my understanding is BTLers just inform the lender that they want to let it out, then, most of the time, the lender's send a letter back saying "OK".

This is Consent to Let and is a convenient loophole for landlords.

I informed my lender when I moved overseas that I wanted to let my flat - I was charged £500 approximately for the first year, and I think it would be £1500 for each subsequent year.  This is to remain on a residential mortgage.  Of course, I could have probably got away with it, more fool me.

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15 minutes ago, A17 said:

I informed my lender when I moved overseas that I wanted to let my flat - I was charged £500 approximately for the first year, and I think it would be £1500 for each subsequent year.  This is to remain on a residential mortgage.  Of course, I could have probably got away with it, more fool me.

I didn't know lenders were that prohibitive. Is that a flat fee or an increase in the rate? If a flat fee, on a £1m london flat, that could be a better route than getting a btl mortgage. For a northern slumlord it would be a hellish option

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41 minutes ago, Drummer said:

I didn't know lenders were that prohibitive. Is that a flat fee or an increase in the rate? If a flat fee, on a £1m london flat, that could be a better route than getting a btl mortgage. For a northern slumlord it would be a hellish option

A flat fee pa.  It is a little complicated as I have an offset mortgage.  As I have a decent cash savings to mortgage ratio it makes sense for me, just.

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9 hours ago, the_duke_of_hazzard said:

'Having failed to find a buyer he and his wife are now in arrears with their mortgage. They need to raise the greatest possible sum as soon as they can.

 

“At the end of January this year my wife said ‘give the keys back to the bank’, so this was really a last resort,” said Mr Low.'

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7 hours ago, Pumpkin Muad'Dib said:

This has been puzzling me.

It's just narcissistic anger. Their self image is tied up in being more 'successful' then the next guy by being a savvy debt junky. Take that away from them and they're a hollow shell.

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2 hours ago, Sancho Panza said:

'Having failed to find a buyer he and his wife are now in arrears with their mortgage. They need to raise the greatest possible sum as soon as they can.

 

“At the end of January this year my wife said ‘give the keys back to the bank’, so this was really a last resort,” said Mr Low.'

'On his website, winacountryhouse.com, Mr Low, 37, who works in advertising but recently suffered a fall in income, invites people to buy a raffle ticket for £2 each.'

Raffle = Sale

Fall in income = redundant

Once you get away from the really expensive areas - prime London, and eer, thats pretty much it. Selling houses more than 10x the avrtage income beomes a very rare event.

My own home village (in the North) is a good example. There are some big old houses. Someone I vaguely know is selling a house for ~600k. She bought it with her then  husband ~10 years ago for 400K. She overpaid for it then. In terms of prices I doubt theres anything to show for the last 10 years. I would guess her and her new bf are looking to lear the mortgage and but noather place with the difference. Or hubby has stopped paying maintenace. Or its an IO loan. I dont know.

But a look at LR for the area, which overs about 60 square miles, shows the number of houses thave sold for more than 300k are tiny - 1 in the last 4 years.

 

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1 hour ago, Si1 said:

It's just narcissistic anger. Their self image is tied up in being more 'successful' then the next guy by being a savvy debt junky. Take that away from them and they're a hollow shell.

YUP. Nail on head. 

Have often encountered that attitude, especially from those people who have no education/skills, but are up to their eyeballs in BTL.

Their self-image is exceptionally strongly connected to their perceived financial success, achieved through cheap debt and property investment: 

" See, I never went to University, but I'm smarter than you"  

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17 hours ago, fru-gal said:
Quote

In order to meet these regulatory requirements about "affordability", lenders are now asking detailed questions about all applicants' other properties and demanding to see proof of lenders' "permission to let".

[. . .]

David Hollingworth, mortgage analyst at broker London & Country, said: "The need to check affordability now means a lender needs to be in possession of the full picture, down to quite a micro level. They need to understand all of a borrowers' commitments and also income - and they generally need hard evidence."

Partly driven by PRA SS13/16, then?

Quote

existing consent-to-let exposures should be taken into account when assessing affordability for a new buy-to-let mortgage contract

 

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9 hours ago, spyguy said:

 

But a look at LR for the area, which overs about 60 square miles, shows the number of houses thave sold for more than 300k are tiny - 1 in the last 4 years.

 

There was a great link from MT the other day featuring James Ferguson saying mathematically 90% of people can't exit at the top.That's a stunning stat.The amount of homes in Leicester for half a bar is unreal and yet the average local wage is £20k.

6 hours ago, Neverwhere said:

Partly driven by PRA SS13/16, then?

 

I thought there'd be an angle from Basel 3 banking regs regarding the way consent to let is treated-technically,it should have a higher risk weighting I'd have thought.

 

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49 minutes ago, Sancho Panza said:

I thought there'd be an angle from Basel 3 banking regs regarding the way consent to let is treated-technically,it should have a higher risk weighting I'd have thought.

Good point!

If the borrower would be able to continue making their monthly payments out of their earned income then CTL might not necessarily make a difference to the loan's risk weighting, but if they've become reliant on the rent to pay their CTL mortgage (for instance if their earned income is tied up in their own housing costs elsewhere) then that could potentially move their loan into the IPRE category (or possibly even ADC if they have a legacy IO mortgage) and their lender could be required to hold more capital against it.

Basel III appears to be approaching finalisation so that would also make sense on the timing:

 

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3 hours ago, Sancho Panza said:

There was a great link from MT the other day featuring James Ferguson saying mathematically 90% of people can't exit at the top.That's a stunning stat.The amount of homes in Leicester for half a bar is unreal and yet the average local wage is £20k.

I thought there'd be an angle from Basel 3 banking regs regarding the way consent to let is treated-technically,it should have a higher risk weighting I'd have thought.

 

Thats only alf the story, the majority of housing is owned by the well over 50.

BTL encouraged the current 50+ to double up exposure to housing too.

How in fcksake does this unwind without a massive crash?

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3 hours ago, Sancho Panza said:

There was a great link from MT the other day featuring James Ferguson saying mathematically 90% of people can't exit at the top.That's a stunning stat.The amount of homes in Leicester for half a bar is unreal and yet the average local wage is £20k.

I thought there'd be an angle from Basel 3 banking regs regarding the way consent to let is treated-technically,it should have a higher risk weighting I'd have thought.

 

Not too fussed about CTL.

Its how IO mortgages are going to priced and regulated. Afaict only Sweden has a large number of io mortgages; they dont exist elsewhere.

Im expect io btl to moved to 10 year repayment commercial loans.

 

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