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Fairyland

DT, Buy-to-let crackdown: more rules to hit landlords in September

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Telegraph : Buy-to-let crackdown: more rules to hit landlords in September

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In two months’ time the Prudential Regulation Authority, part of the Bank of England, will start to enforce tougher standards for landlords with four or more mortgaged properties.

The change means that, for the first time, lenders may be forced to look at a landlord’s entire portfolio when they decide what mortgage deal they can offer on a single property. They may want to see proof of rental income and a business plan to support a new application. 

Brokers are warning that the greater burden being placed on lenders is likely to mean that some decide to exit the market. They are urging borrowers to arrange new deals before the rules take effect on September 30.

 

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Lenders having to look at entire portfolio is already discussed In the BTL running for exit thread. However, I did not get the Lenders decide to exit bit. Why would lenders exit?

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25 minutes ago, Fairyland said:

Lenders having to look at entire portfolio is already discussed In the BTL running for exit thread. However, I did not get the Lenders decide to exit bit. Why would lenders exit?

Poor dear little lenders don't want the "greater burden" perhaps? <_< After all, the "burden" of lending responsibly must be awful for them.

 

 

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33 minutes ago, Fairyland said:

Lenders having to look at entire portfolio is already discussed In the BTL running for exit thread. However, I did not get the Lenders decide to exit bit. Why would lenders exit?

Cost of capital. Theyll have to raise more and pay more for it.

Challenger banks are fcjed.

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9 hours ago, Fairyland said:

Lenders having to look at entire portfolio is already discussed In the BTL running for exit thread. However, I did not get the Lenders decide to exit bit. Why would lenders exit?

Large lenders use automation to process loans, smaller lender do it by hand. Portfolio borrowers have very complicated arrangements that cannot be automated.

 

 

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9 hours ago, spyguy said:

Cost of capital. Theyll have to raise more and pay more for it.

Challenger banks are fcjed.

Good guess, but complete ******** unfortunately.

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20 minutes ago, Peter Hun said:

Good guess, but complete ******** unfortunately.

A good guess on the upcoming delinquency rates of BTL loans.

A lot of BTL loans are going bad. Being IO, theres limited equity in the house for the bank, so theyve got to take the full hit.

The more band loans, the more banks have to hold more capital.

 

 

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More bad news for the buy to let brigade as the main stream media spell out what the changes will mean.

The comments section should be worth a read. Expect lots of "Woe is me!", "It's all very unfair!" and "How could I have known?" from a vocal minority up to their eyeballs in debt.

http://www.telegraph.co.uk/personal-banking/mortgages/buy-to-let-crackdown-rules-hit-landlords-september/

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9 hours ago, Peter Hun said:

Large lenders use automation to process loans, smaller lender do it by hand. Portfolio borrowers have very complicated arrangements that cannot be automated.

 

 

Margins can't be that low? Or would it be the legal, finance , and insurance costs rapidly adding up.     Presumably also the landlord needs his or her professional services to arrange including a specialist broker.

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Bigger lenders would need to employ underwriters to assess the risk, it could be a complex job. Also, IT systems may need to be overhauled which could be incredibly expensive and time consuming.

They are geared up for volume, a small number of portfolio borrowers won't be worth the cost and hassle. 

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20 hours ago, Peter Hun said:

Bigger lenders would need to employ underwriters to assess the risk, it could be a complex job. Also, IT systems may need to be overhauled which could be incredibly expensive and time consuming.

They are geared up for volume, a small number of portfolio borrowers won't be worth the cost and hassle. 

Bigger lenders already employ underwriters, but yes the job would be made more complex if they had to assess a LL's total holdings. That would mean extra tasks/training for the advisers, underwriters, and compliance. As said above it wouldn't be worth all of the extra training for a couple of applications per month.

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In the bigger picture, would it be more profitable for lenders to simply repossess and sell the same property to another buyer?

Are they not keen to reposses? Does it bring them bad reputation?

Edited by Fairyland

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On 04/07/2017 at 9:35 PM, Fairyland said:

Lenders having to look at entire portfolio is already discussed In the BTL running for exit thread. However, I did not get the Lenders decide to exit bit. Why would lenders exit?

Coca cola to exit drinks game?

 

There is no greater fool to lend to, so what exactly would these lenders then do...

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