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peter_2008

What Madness

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https://www.propertytribes.com/landlord-case-settlement-and-process-t-127637061.html

Reading the linked article, I just thought ...what madness...  

  • Tenants lost out, because some of them will have rental increase or be evicted
  • Potential homebuyers lost out, because the landlord deprived 40+ properties from the market
  • Interestingly the landlord also lost out, 14 years in BLT, in the end, he lost over £100,000
  • And even the banks lost out. Nearly £700k write-off.

Why we allow this insanity to poison the market and then in the end literally everyone is worse off... What madness.

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Put another way the landlord was able to gamble 100k with the hopes of 'winning' over 5 million, that would be like buying apple shares when they were crap, or bitcoin at $400 and cashing out at the high. That's a pretty healthy bet, if it wasn't for that pesky 0.5% interest rate raise lol.

The only point I raise is, why aren't we all doing it?

Edited by honkydonkey

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5 minutes ago, peter_2008 said:

Reading the linked article, I just thought ...what madness...  

  • Tenants lost out, because some of them will have rental increase or be evicted
  • Potential homebuyers lost out, because the landlord deprived 40+ properties from the market
  • Interestingly the landlord also lost out, 14 years in BLT, in the end, he lost over £100,000
  • And even the banks lost out. Nearly £700k write-off.

Why we allow this insanity to poison the market and then in the end literally everyone is worse off... What madness.

An appalling state of affairs. Shame on the Government for allowing this to continue. I think mortgages shouldn't be allowed on rented homes as it's encouraged this pyramid of misfortune.

I'll just put in a clickable link to the story...   :)  https://www.propertytribes.com/landlord-case-settlement-and-process-t-127637061.html 

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In a perverse way, I guess one can see from this example that why the whole country could tank with everyone loses something, if house price is to fall and why the government has to keep this madness inflated at all cost. 

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I guess you could argue that thorough this sorry affair, individual bankers might have enriched themselves with bonuses. And a few estate agents and lawyers got well paid. But otherwise, this is not even a pyramid. This is basically lunatics running the asylum, so everyone get hurt, even the lunatics themselves!

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1 hour ago, kirstieb said:

Crikey how much debt, who is giving this person all this money when clearly it makes no sense. 600 grand written off!? That is shocking 

"We receive dozens of enquiries per week from Landlords with similar circumstances and varying portfolio sizes, geographical locations and levels of equity."

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From personal experience, I am indeed seeing  typical BTL property like 2 bed flats and 2 bed terraced houses flooding the market at the moment. The reason that it does't feel like that yet, is because a shortage of 3 and 4 beds family home, so on balance the market feels short of good stocks. But eventually, this will feed upstream. 

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1 hour ago, Captain Kirk said:

"We receive dozens of enquiries per week from Landlords with similar circumstances and varying portfolio sizes, geographical locations and levels of equity."

I'm on a facebook group called "UK property traders" for a laugh and it's frightening how common this is, Underwater leveraged landlords come on to ask the people of Facebook their suggestion for getting out of -ve equity.

Lenders wanting to exercise their consolidation rights (Taking 100% of the sale proceeds from a sale not just the mortgage amount to reduce the mortgages on the rest of the portfolio) is becoming a big issue for some of them trapping them in the lovely double bind situation of either being in negative equity and unable to sell, Or on the houses with equity the mortgage company take the lot to offset against the -ve equity part of the portfolio + they get a nice CGT bill.

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29 minutes ago, Council estate capitalist said:

I'm on a facebook group called "UK property traders" for a laugh and it's frightening how common this is, Underwater leveraged landlords come on to ask the people of Facebook their suggestion for getting out of -ve equity.

Lenders wanting to exercise their consolidation rights (Taking 100% of the sale proceeds from a sale not just the mortgage amount to reduce the mortgages on the rest of the portfolio) is becoming a big issue for some of them trapping them in the lovely double bind situation of either being in negative equity and unable to sell, Or on the houses with equity the mortgage company take the lot to offset against the -ve equity part of the portfolio + they get a nice CGT bill.

Brilliant.

And IRs haven't gone up yet.

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1 hour ago, Council estate capitalist said:

.......portfolio) is becoming a big issue for some of them trapping them in the lovely double bind situation of either being in negative eqOr on the houses with equity the mortgage company take the lot to offset against the -ve equity part of the portfolio + they get a nice CGT bill.

This....

Cashflow is king. Pay all proceeds to bank, and still have CGT bill. Did sir MEW??

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5 hours ago, kirstieb said:

Crikey how much debt, who is giving this person all this money when clearly it makes no sense. 600 grand written off!? That is shocking 

14 years 12% loss on capital is under 1% a year.

How much markup do you think bank had on the interest they charged. Plus lots and lots of fees.

Would be surprised if bank does not have a gross profit on the account over it's lifetime. Not as much as it would be without the write off but .... [and other accounts will not have the write off]

Who gains? The financial services industry at every stage including the chaps in the article who are boasting they only charged 35k for getting 700k of debt written off. How many billable hours? Letting agents are probably the bigest total if you got to see all the numbers.

financial services ... we are world leaders don't cha know?

 

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  • 239 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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