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peter_2008

Where happens when BTL selling up?

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Where I am (SW), I am seeing a substantial increase (not flooding, but a big increase) of obvious BTL houses (mostly 2 beds flats or terraced house) coming on to the market. The ones actually have sold, were about 10% - 15% below recent peak price (back to 2016 level).

A few seem to be landlord got repossessed; and some seem to be the case where the amateur landlords with homeowner mortgage let the property out without telling the bank; and the bank found out and called in loan. I wonder how wide spread this kind of fraud went on? i.e. landlords lied to get/retain a homeowner mortgage (i.e. lower deposit and cheaper rate ). I have seen one example that the landlord got caught by the bank, got repossessed, then stripped and trashed the whole house in anger.

Despite BTL insisting they have not unfairly disadvantaged FTB, it is FTB are buying these type of properties (particularly 2 bed terraced). So my scenario is that these BTL  sales will lead the fall and once they reach a level that could be afforded by FTB, say a young couple with a joint income of £40K ish, that's where the market will stablise, which in turn will dictate how much further up the chain will fall.

Anyone seeing the same? 

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54 minutes ago, peter_2008 said:

I have seen one example that the landlord got caught by the bank, got repossessed, then stripped and trashed the whole house in anger.

Despite BTL insisting they have not unfairly disadvantaged FTB, it is FTB are buying these type of properties (particularly 2 bed terraced). So my scenario is that these BTL  sales will lead the fall and once they reach a level that could be afforded by FTB, say a young couple with a joint income of £40K ish, that's where the market will stablise, which in turn will dictate how much further up the chain will fall.

Anyone seeing the same? 

I'm not sure about around here, but that's a heart-warming tale. Great news about the LL who trashed the house in anger - he's hurting himself AND helping achieve a lower sale price locked into the Land Registry for that address when it sells.

And also it's great that some (ie more than none) are being caught. We can assume HMRC are on their backs too.

 

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I have read a few landlords' forums and the only logical conclusion is that when BTL landlords sell, the properties disappear.  Completely disappear off the face of the Earth.  Gone.  Forever.

We must do anything we can to keep them in business, otherwise the properties will disappear and we will all be homeless.  

If you don't believe me, read landlords' posts.

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9 hours ago, peter_2008 said:

 

A few seem to be landlord got repossessed; and some seem to be the case where the amateur landlords with homeowner mortgage let the property out without telling the bank; and the bank found out and called in loan. I wonder how wide spread this kind of fraud went on? i.e. landlords lied to get/retain a homeowner mortgage (i.e. lower deposit and cheaper rate ). I have seen one example that the landlord got caught by the bank, got repossessed, then stripped and trashed the whole house in anger.

 

This is the sort of heartwarming stuff we want to hear.  How did you find out the details about the repossessions for so many properties?  Is there somewhere you can look it up?

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6 hours ago, Bear Hug said:

I have read a few landlords' forums and the only logical conclusion is that when BTL landlords sell, the properties disappear.  Completely disappear off the face of the Earth.  Gone.  Forever.

We must do anything we can to keep them in business, otherwise the properties will disappear and we will all be homeless.  

If you don't believe me, read landlords' posts.

lol .... but its true I tell you! .... its all true! Won't someone think of the poor landlords?

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9 hours ago, elephant said:

This is the sort of heartwarming stuff we want to hear.  How did you find out the details about the repossessions for so many properties?  Is there somewhere you can look it up?

Well, the estate agents have to tell you that it is repo (though they obviously do not put it on the ad), i.e. you are buying from the banks. I think that I encounter these cases more, because mainly I am looking at 2 beds terrace houses (I am buying as a home due to job relocation), ideally without a chain/vacant. I do not choose to view repos, but it seem because my criteria, I keep running into houses that landlords are selling up.

And also other buyers seem to FTB too. Like I said, despite the landlord industry vehemently denying the harm they have done to FTBs, the reality is that it is exactly FTBs that are buying the properties the landlords are selling.  

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15 hours ago, Bear Hug said:

We must do anything we can to keep them in business, otherwise the properties will disappear and we will all be homeless.  

I also noticed that despite the landlord industry's claim that tax penalising landlord would not free up more houses for FTB, and instead bigger landlords will buy from small landlords, which creates worse monopoly etc etc, the reality is many landlords, big or small, stopped/reduced buying (banks are also more strict against landlords). I got out bid a few times by other FTBs (well, I guess they are more desperate than me to get on the "ladder"). The fact that FTB number has increased (ok, HTB played a part too) also back this up. 

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11 minutes ago, peter_2008 said:

Like I said, despite the landlord industry vehemently denying the harm they have done to FTBs, the reality is that it is exactly FTBs that are buying the properties the landlords are selling.  

Absolutely.  I have also noticed that lots of ex-BTL "investment opportunity" listings are very run down.  I expect that to improve with time once more recent BTL entrants start selling up

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15 hours ago, peter_2008 said:

I also noticed that despite the landlord industry's claim that tax penalising landlord would not free up more houses for FTB, and instead bigger landlords will buy from small landlords, which creates worse monopoly etc etc, the reality is many landlords, big or small, stopped/reduced buying (banks are also more strict against landlords). I got out bid a few times by other FTBs (well, I guess they are more desperate than me to get on the "ladder"). The fact that FTB number has increased (ok, HTB played a part too) also back this up. 

Possibly more BOMAD "fire-power" too. I have some of that for my kids but I'm encouraging them to a) wait for the crash and then b) take a 10 year mortgage fixed for it's entirety.

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On 09/11/2018 at 21:56, peter_2008 said:

Where I am (SW), I am seeing a substantial increase (not flooding, but a big increase) of obvious BTL houses (mostly 2 beds flats or terraced house) coming on to the market. The ones actually have sold, were about 10% - 15% below recent peak price (back to 2016 level).

A few seem to be landlord got repossessed; and some seem to be the case where the amateur landlords with homeowner mortgage let the property out without telling the bank; and the bank found out and called in loan. I wonder how wide spread this kind of fraud went on? i.e. landlords lied to get/retain a homeowner mortgage (i.e. lower deposit and cheaper rate ). I have seen one example that the landlord got caught by the bank, got repossessed, then stripped and trashed the whole house in anger.

Despite BTL insisting they have not unfairly disadvantaged FTB, it is FTB are buying these type of properties (particularly 2 bed terraced). So my scenario is that these BTL  sales will lead the fall and once they reach a level that could be afforded by FTB, say a young couple with a joint income of £40K ish, that's where the market will stablise, which in turn will dictate how much further up the chain will fall.

Anyone seeing the same? 

Depends.

Any high LTV IO BTL will see the banks cosonsolidate the porffolio - see one then the banks will be after .

AS bland points out, IO BTL split into two types:

Mr n Mrs 1 or 2 IO BTL to 'top up the pension, I understand bricks n mortar, cant go wrong with property'.

These, at best, will see little cash return from their 'investment'. The end for these will is - and it is happening now - the IO BTL bank asking for more and more equity into the portfolio as the low priced 2 year period ends.

In the last 4 years Ive seen someone who maged to get 90% LTV been asked to put another 30% in to get a remortgage. And the idiot did, putting another 80k o ntheir OO mortgage.

There are several 10k of these type, who probably make up 50% of the IO BTLers.

Then there's the 100+ house IO BTL brigades. There are a few 1000s of these and they make thje other 50% of the BTL owners.

So:

1or2 IO BTL will be milked for their OO equity, sucking any capital gain out of their BTLs (unlikely) an their OO. S24 will put a cherry on their sh1t sandwich by removing all income and they selling up with their tale between their legs or taking on more debt.

They'll come out of BTL poorer but no wiser.

 

100+ BTL will be ruined.

 

 

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21 minutes ago, spyguy said:

Depends.

Any high LTV IO BTL will see the banks cosonsolidate the porffolio - see one then the banks will be after .

AS bland points out, IO BTL split into two types:

Mr n Mrs 1 or 2 IO BTL to 'top up the pension, I understand bricks n mortar, cant go wrong with property'.

These, at best, will see little cash return from their 'investment'. The end for these will is - and it is happening now - the IO BTL bank asking for more and more equity into the portfolio as the low priced 2 year period ends.

In the last 4 years Ive seen someone who maged to get 90% LTV been asked to put another 30% in to get a remortgage. And the idiot did, putting another 80k o ntheir OO mortgage.

There are several 10k of these type, who probably make up 50% of the IO BTLers.

Then there's the 100+ house IO BTL brigades. There are a few 1000s of these and they make thje other 50% of the BTL owners.

So:

1or2 IO BTL will be milked for their OO equity, sucking any capital gain out of their BTLs (unlikely) an their OO. S24 will put a cherry on their sh1t sandwich by removing all income and they selling up with their tale between their legs or taking on more debt.

They'll come out of BTL poorer but no wiser.

100+ BTL will be ruined.

Agree completely. These 2 cohorts are so badly equipped to deal with a business that they will absolutely lose any profits, and the 100+ will lose everything. 

A miserable, tight fisted, rigsby type landlord from the 1970’s....that we know and hate was absolutely a different animal. They knew what they were, cash flow was king and they spent nothing. I don’t advocate them but they definitely did not impact on house prices....

I know one chap who bought a pair of houses (split into 4 neat flats each) pay £8k for the pair. Comparables would suggest they were worth around £30k each. The reason is they were investment properties and who else was she going to sell to? Owner occupiers would want them and the 118’er hadn’t been invented. 

Nowadays they would sell for £400k each and 118’ers will be wetting their pants for them. So demand has increased for these HMO type properties relative to a nice house in the suburbs....and generally demand everywhere. The market is all to c@ck. 

Massive correction is due but I think it does need rates to rise before it really takes hold. At the moment those with cask are chasing the poorest of yields and those without cash are happy to borrow and use rent to sustain a living. It will change. 

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I always felt that credit availability is the first and foremost important fact. The fall we see in typical BTL properties is a reflection of credit tightening against this particular type of properties. For the wider market to crash, there has to be a wider credit tightening.

My biggest fear is that what the government allowed to happen in London, they can (still) do that to the entire country, i.e. 40% HTB, no stamp duty up to £500k, 10 x joint income, tax advantage to speculators, etc etc  

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10 minutes ago, peter_2008 said:

I always felt that credit availability is the first and foremost important fact. The fall we see in typical BTL properties is a reflection of credit tightening against this particular type of properties. For the wider market to crash, there has to be a wider credit tightening.

My biggest fear is that what the government allowed to happen in London, they can (still) do that to the entire country, i.e. 40% HTB, no stamp duty up to £500k, 10 x joint income, tax advantage to speculators, etc etc  

Btl credit is not tightening. There are effectively no IO mortgages.

Sure there might be some listed but theres no high io ltv loans being written by regulated banks.

Basel 3 is why.

Non amortising debt is quickly moving to the non bank, specialist lenders i.e. brutal and expensive.

Any io borrower assuming they can remortgage is kidding themselves.

Banks are being told to put more n more capital in their io books.

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1 hour ago, peter_2008 said:

.

My biggest fear is that what the government allowed to happen in London, they can (still) do that to the entire country, i.e. 40% HTB, no stamp duty up to £500k, 10 x joint income, tax advantage to speculators, etc etc  

I think the democratic judgement would be brutal.

I'm quite likely to vote Labour simply because they recognise they problems and aren't intending to douse them on petrol like the Tories have. I'm really not left wing either.

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1 hour ago, Si1 said:

I think the democratic judgement would be brutal.

I'm quite likely to vote Labour simply because they recognise they problems and aren't intending to douse them on petrol like the Tories have. I'm really not left wing either.

Are you having a laugh? The same Labour who had it in their election manifesto to continue HTB until 2027?

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7 minutes ago, dpg50000 said:

Are you having a laugh? The same Labour who had it in their election manifesto to continue HTB until 2027?

They haven't published their manifesto for the next ge. It's a contentious point sure enough.

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On 11/10/2018 at 8:04 AM, Switch625 said:

lol .... but its true I tell you! .... its all true! Won't someone think of the poor landlords?

Brace yourself, the next stage is hearing in the media about the 100's or maybe 1000's of LL's sharing the sob stories on how BTL destroyed their lives and a "you must help us" plea, forgetting about the millions of lives they destroyed over the past few decades without giving a s***.

Empathy has always been one of my better qualities, but watching BTL landlords struggle and even badly suffer will not even budge my empathy meter one micro inch, and I will be p**ed off with anyone on here who pities them.

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6 hours ago, localhero1983 said:

Empathy has always been one of my better qualities, but watching BTL landlords struggle and even badly suffer will not even budge my empathy meter one micro inch, and I will be p**ed off with anyone on here who pities them.

Agreed. It will move my empathy meter - even further away from the BTLers.

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16 hours ago, Si1 said:

They haven't published their manifesto for the next ge. It's a contentious point sure enough.

Fair point. Will be interesting to see if they change their tune re: HTB (without introducing other props).

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11 hours ago, mrtickle said:

Agreed. It will move my empathy meter - even further away from the BTLers.

This year I hooked up with a fellow triathlete in my local village pub who I initially liked and who I wanted to get to know better who informed me that he had 15 BTL properties. After a few pints one night with him I agreed to repair a list of electrical faults and add a few installations  in his properties even they I don't touch the tools anymore, though I am still Part Reg, just did it as a favour.

The properties were not what I was expecting, though clinical clean they were in rough areas and were at the other end of the spectrum my new found buddy was living in with his openly over excited community contributions in his idyllic life, I got the same feeling from his situation as I would watching Hitler patting the heads of children.

One situation affected me from his BTL's, it was a pokey property with a very attractive single mother in a very nasty area who looked very low, it was all wrong, just cannot explain even why I felt that way. Simple fact is that there days I really do not like BTL for so many reasons, I dare say a few reasons I hate them are maybe classed as irrational hatred  of them, the fact that the ones with so many properties and massive mortgages are now wrapped in cotton wool and whose troubles are to be pitied while their victims/hosts go unnoticed.

Seriously, I could watch in the future a BTL LL in the homeless gutter a broken person even if they had a past with me and not have a flicker of pity, I would not say I would be glad, just indifferent. And my lack of empathy would could from a message to others on never to take up this method of housing again which was ruthless, expensive and greedy

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2 hours ago, dpg50000 said:

Fair point. Will be interesting to see if they change their tune re: HTB (without introducing other props).

Agreed

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On 11/11/2018 at 13:27, localhero1983 said:

Brace yourself, the next stage is hearing in the media about the 100's or maybe 1000's of LL's sharing the sob stories on how BTL destroyed their lives and a "you must help us" plea, forgetting about the millions of lives they destroyed over the past few decades without giving a s***.

Empathy has always been one of my better qualities, but watching BTL landlords struggle and even badly suffer will not even budge my empathy meter one micro inch, and I will be p**ed off with anyone on here who pities them.

WE DIVINT NAAAAH
I THOUGHT IO Mortgage was an "I owe" Mortgage"

Save us!!!

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Well, viewed another 2 beds, ex-BTL. 7% down from recent sold price, probably will go for 10% less. Agent indirectly told me that the best offer was from another BTL, "well below"asking price.

It also occurred to me that many things that matter to me as a home buyer, do not matter to a BTL. For example, lack of driveway, north facing garden,  odd size/shape bedrooms, close to motorway, HMO near by etc etc. There are some many BTL are like this. I think that for these types of properties, BTL had been outbidding FTB exactly because BTL do not care about these matters, they care mostly about yield. On the table has turned, these properties are not very attractive to home buyers and will have to fall until the home buyers think the money is worth the inconvenience.  

 

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On 12/11/2018 at 07:18, localhero1983 said:

This year I hooked up with a fellow triathlete in my local village pub who I initially liked and who I wanted to get to know better who informed me that he had 15 BTL properties. After a few pints one night with him I agreed to repair a list of electrical faults and add a few installations  in his properties even they I don't touch the tools anymore, though I am still Part Reg, just did it as a favour.

The properties were not what I was expecting, though clinical clean they were in rough areas and were at the other end of the spectrum my new found buddy was living in with his openly over excited community contributions in his idyllic life, I got the same feeling from his situation as I would watching Hitler patting the heads of children.

One situation affected me from his BTL's, it was a pokey property with a very attractive single mother in a very nasty area who looked very low, it was all wrong, just cannot explain even why I felt that way. Simple fact is that there days I really do not like BTL for so many reasons, I dare say a few reasons I hate them are maybe classed as irrational hatred  of them, the fact that the ones with so many properties and massive mortgages are now wrapped in cotton wool and whose troubles are to be pitied while their victims/hosts go unnoticed.

Seriously, I could watch in the future a BTL LL in the homeless gutter a broken person even if they had a past with me and not have a flicker of pity, I would not say I would be glad, just indifferent. And my lack of empathy would could from a message to others on never to take up this method of housing again which was ruthless, expensive and greedy

I don't think that the majority of landlords actually set out to be evil blood-sucking parasites.  Their simplistic view is that they're buying up run-down houses and renovating them into nice homes for the little people to live in.  Of course they overlook or are incapable of comprehending that the houses that they own could all have been bought for less by homeowners if they weren't doing it.  Most probably don't even understand the basic concept of supply and demand.  But if they keep their blinkers on, they convince themselves that they're making the world a better place, while of course trying to make a wad of cash almost as an innocent by-product.

I really think that the majority of small-time landlords are just pawns in a much bigger game, being used by the ruling elites to shove up prices until they decide it's the time to cash in and remove the props, leaving them to discover just how little a shoebox in a rough area is actually worth in a genuinely free market.

It will be the next "Mis-selling" scandal, all these innocent Daily Wail readers who were encouraged to put their money in.  I won't have any sympathy, but I don't think I'll particularly hate them either.  Just as I'd feel towards someone who'd lost a load of money in some holiday club or pyramid selling scam - victims of their own stupid greed really.

Edited by Tes Tickle

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  • 261 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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