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How Britain's £239bn buy-to-let bubble burst

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Sorry but good. Buy to Let is pricing people out of a home and forcing them into a lifetime of dodgy rentals and uncertainty about the roof over their head. Let people have a place to call their own again and maybe they'll take pride in their area.

 

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Yeah I'm not shedding any tears for them. Getting a mortgage doesn't make you an entrepreneur. Their 'business' has just been a government subsidised gravy train. It's pretty surprising that they described rates of 5.5% as "whopping" when BoE rates @ ~5% were considered pretty low for so long. Did people really think rates would remain at <1% for ever?

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2 minutes ago, aheadofthecurve said:

Yeah I'm not shedding any tears for them. Getting a mortgage doesn't make you an entrepreneur. Their 'business' has just been a government subsidised gravy train. It's pretty surprising that they described rates of 5.5% as "whopping" when BoE rates @ ~5% were considered pretty low for so long. Did people really think rates would remain at <1% for ever?

there is nearly half a generation now that have never known interest rates above 1%

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21 minutes ago, hurlerontheditch said:

there is nearly half a generation now that have never known interest rates above 1%

Sure, but what’s the going rate on a small business loan?

And how does that compare to the rate on residential and landlord mortgages?

 

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Aaaah this article is music to my ears. Like a pent up boil being lanced.

Really good summary, and particularly pleasing given who reads that paper.

No one can pretend they don’t know about them, and the realisation will help people to find the impetus to sell. Hopefully soon.

Annoyingly I need to buy a second / third stepper house in about 6 months. None of this will have trickled up by then.

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So sad. This could mean, that renters will suddenly be able to buy and own their homes, since prices collapse. What an utter social catastrophe! :D

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New landlords priced out 

Oh nooo! Just imagine! :D

Edited by Silverfinger

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Not got a problem with buying to let......the problem is borrowing to buy to let.

Making a profit from debt, getting tax relief from debt.....like borrowing to use it to gamble with.;)

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22 minutes ago, winkie said:

Not got a problem with buying to let......the problem is borrowing to buy to let.

Making a profit from debt, getting tax relief from debt.....like borrowing to use it to gamble with.;)

This. I've said for years that it should be illegal to rent out a property that has a loan attached. Or at least a private individual to have a loan/mortgage on a property to rent out. 

I dont beleive any other investment allows you to borrow so much for so long against an asset and offset so much of the costs for doing so. I could be wrong

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3 hours ago, Silverfinger said:

Oh nooo! Just imagine! :D

Must be terrible to be priced out of landlordship for decades on end, never able to put down roots in the community by building a property portfolio they can call their own.

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19 minutes ago, Itssimple said:

Incorrect risk classification for mortgages...that rings a bell...

Also strangely reminiscent in how it's being reported as a 'blunder' rather than deliberate.

Didn't take long for a 'challenger' bank to begin behaving like its forebears - these people are incorrigible. Lure of fast, easy returns lending into speculative bubbles just too much to resist.The only thing that will ever bring them to heel is strong state regulation. Maybe we need another global financial disaster for that to sink in to our political thickos.

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9 hours ago, rollover said:

 

Enjoy reading, and please be sensible with responses.

 

Oh my God, the years I had to put up with so many financially illiterate people who borrowed up to their necks on the basis that "Bob his mate at the Dog & Groom" had made a small on paper fortune for doing nothing, and they did in many cases make a fortune, who then did it him/herself as they bragged about their great business attributes as they thought decorating a  few rooms and getting a plumber to change a boiler put them up there with Branson. I actually run my own business, so it galls me when I hear the way these people go on. 

But now it is all turned and they look towards government or the BOE and ask "why are you doing this to me", they have now all turned into helpless little children who expected their hands to be held forever without ever having bad or down times. As a typical business owner myself I can tell you I am making an important decision or change every month that is a make or break choice where there is nobody holding my hand, some do it on an hourly basis, and I personally would not change a thing.

Well now these BTL babes have same challenges coming their way, some will even survive, some even profit, but so many of them now have a nasty awakening coming their way and I personally cannot wait to see them sweat and suffer.

Edited by localhero1983

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47 minutes ago, Si1 said:

former-ceo-of-northern-rock-bank-adam-ap

If only  NR had had a large crsytal ball shaped object in the CEOs office that they could use to see the future ...

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Also CYBG receive a mention here:

https://www.bloomberg.com/news/articles/2019-01-23/metro-bank-plunges-as-misclassified-assets-raise-capital-concern

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British lenders including another so-called challenger bank, CYBG Plc, have said uncertainty around Brexit pushed down confidence in the last quarter of 2018, though Metro made no mention of the political and economic environment in its statement.

 

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32 minutes ago, localhero1983 said:

Oh my God, the years I had to put up with so many financially illiterate people who borrowed up to their necks on the basis that "Bob his mate at the Dog & Groom" had made a small on paper fortune for doing nothing, and they did in many cases make a fortune, who then did it him/herself as they bragged about their great business attributes as they thought decorating a  few rooms and getting a plumber to change a boiler put them up there with Branson. I actually run my own business, so it galls me when I hear the way these people go on. 

But now it is all turned and they look towards government or the BOE and ask "why are you doing this to me", they have no all turned into helpless little children who expected their hands to be held forever without ever having bad or down times. As a typical business owner myself I can you I am making an important decision or change every month that is a make or break choice where there is nobody holding my hand, some do it on an hourly basis, and I personally would not change a thing.

Well now these BTL babes have same challenges coming their way, some will even survive, some even profit, but so many of them now have a nasty awakening coming their way and I personally cannot wait to see them sweat and suffer.

This, have a "like" :) from me.

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5 hours ago, winkie said:

Not got a problem with buying to let......the problem is borrowing to buy to let.

Making a profit from debt, getting tax relief from debt.....like borrowing to use it to gamble with.;)

+1.

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New figures suggest the number of buy-to-let mortgages given out in 2018 plunged below 70,000.

On top of this, existing landlords are offloading around 3,800 properties a month, Ministry of Housing figures show.

That means there’s still roughly a net increase of 20000+ new BTL mortgages in 2018.  We’re still going the wrong way overall, unless that 70k figure includes remortgages?

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Theres nothing new here that was not pointed out 4 years ago by bland.

The Mail's article, grim as it is, misses a huge issue- putting 1 or 2 rental income gross on your income is going to whack out a lot of peoples tax credits.

Theres a lot of people in Lonson SE who scam both TCs and BTL.

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1 hour ago, Silverfinger said:

+1.

+2 - it's the tax relief bit that needs to be fully removed - at which point few people would be interested in borrowing to buy a BTL property.

Just now, spyguy said:

Theres nothing new here that was not pointed out 4 years ago by bland.

The Mail's article, grim as it is, misses a huge issue- putting 1 or 2 rental income gross on your income is going to whack out a lot of peoples tax credits.

Theres a lot of people in Lonson SE who scam both TCs and BTL.

Sadly for tax credits you can still deduct all interest before calculating the income you declare on your tax return see https://www.gov.uk/hmrc-internal-manuals/tax-credits-technical-manual/tctm04006

 

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For the purposes of tax credits, a person will still be able to deduct 100% of their finance costs when calculating their allowable expenses for property income.

 

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  • 293 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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