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Banks that are exposed to BTL and/or risky mortgages


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42 minutes ago, msi said:

Bail outs galore, term funding scheme extended.

TFS ended. Dead, ~ 2years ago.

Due to ZIRP, bank lending is falling.

Boe/banks have dug their own hole.

 

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19 hours ago, spyguy said:

There'll be no bail outs now.

Coventry BS

Nationwide

Skipton BS

Spy, which UK banks would you rate as most solvent? 

HSBC is also toast due to shenanigans in Hong Kong

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28 minutes ago, Locke said:

Spy, which UK banks would you rate as most solvent? 

HSBC is also toast due to shenanigans in Hong Kong

I dont think HSBC is toast.

However, the more international, the harder to work out how.

Beside, now bank is international these days.

HSBC UK has its cash locked in the UK. And its stuffed to the gills with cash.

 

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2 minutes ago, spyguy said:

I dont think HSBC is toast.

However, the more international, the harder to work out how.

Beside, now bank is international these days.

HSBC UK has its cash locked in the UK. And its stuffed to the gills with cash.

 

What do you make of this?

 

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34 minutes ago, highcontrast said:

One Buckinghamshire-based landlord, Matthew Lauchlan, explains the difficulties he is facing.

He said: “Holiday bookings have really dropped off at the moment as people put any travel and vacation plans on hold.

“But what I am even more worried about is that I am now being contacted by tenants who for one reason or another as a result of the Corona virus are not being paid.

“They are letting me know that this means they’re going to struggle to pay the rent. If that happens on any kind of scale it could have a knock-on effect on my mortgage repayments.

“Being a larger landlord will help me spread the risk but that will not be so easy for small landlords with just one or two properties.”

Holiday Let *and* BTL...

I disagree with the bold text. Being a 'larger landlord' means he's go higher risk of voids.

Simple probability. He needs to go back to GCSE probability.

Assume risk of a void is 30% - 0.3.

With 1 rental you've a 30% chance of a void.

With 2 rentals the risk a single void  is 03 + 0.3 = 0.6 = 60%

3 - 90%

4 - 120%

etc.

I mention risk of single void as most IO BTlers are so highly leveraged that a single void will bankrupt them.

he only way to reduce the risk of a void - and you cannot avoid a void - is to reduce or eliminate the leverage so the void doesnt blow a hole in your business.

But IO BTL was always about leverage not risk reduction.

 

 

 

 

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17 minutes ago, spyguy said:

One Buckinghamshire-based landlord, Matthew Lauchlan, explains the difficulties he is facing.

He said: “Holiday bookings have really dropped off at the moment as people put any travel and vacation plans on hold.

“But what I am even more worried about is that I am now being contacted by tenants who for one reason or another as a result of the Corona virus are not being paid.

“They are letting me know that this means they’re going to struggle to pay the rent. If that happens on any kind of scale it could have a knock-on effect on my mortgage repayments.

“Being a larger landlord will help me spread the risk but that will not be so easy for small landlords with just one or two properties.”

Holiday Let *and* BTL...

I disagree with the bold text. Being a 'larger landlord' means he's go higher risk of voids.

Simple probability. He needs to go back to GCSE probability.

Assume risk of a void is 30% - 0.3.

With 1 rental you've a 30% chance of a void.

With 2 rentals the risk a single void  is 03 + 0.3 = 0.6 = 60%

3 - 90%

4 - 120%

etc.

I mention risk of single void as most IO BTlers are so highly leveraged that a single void will bankrupt them.

he only way to reduce the risk of a void - and you cannot avoid a void - is to reduce or eliminate the leverage so the void doesnt blow a hole in your business.

But IO BTL was always about leverage not risk reduction.

Those specialising in student lets, must be toast they will have near 100% void after Easter. 

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8 minutes ago, Confusion of VIs said:

Those specialising in student lets, must be toast they will have near 100% void after Easter. 

Make that between Easter and October ....

And in a large fall in 18yos. And less of them going to Uni - the number of my niece's 16yo friends who say No way are hey off to Uni as they have older sibling who sent, are in debt, and dont have a job.

And the large irise of purpose built Uni housing, much cheaper to fund tan Dave the LL.

 

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18 minutes ago, spyguy said:

Make that between Easter and October ....

And in a large fall in 18yos. And less of them going to Uni - the number of my niece's 16yo friends who say No way are hey off to Uni as they have older sibling who sent, are in debt, and dont have a job.

And the large irise of purpose built Uni housing, much cheaper to fund tan Dave the LL.

 

I can see a huge row brewing over this.

IIRC most student lets are on a fixed term on a joint and several liability basis.  Also by now most students will have signed contract for the next financial year, which may or may not happen.  

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2 hours ago, Confusion of VIs said:

Those specialising in student lets, must be toast they will have near 100% void after Easter. 

Well that brings us back to - 

I think the whole university landscape will change going forward thanks to Covid19, with much more emphasis on online courses and less about campus based, especially for overseas students , I'm sure the recent racist attacks against a number Chinese students won't have helped entice them in the future either.

But the purpose built student flats will have loads of empty rooms next year, therefore possibly discounted, so why would you want to rent in a student house share?

Either way Dave the student slumlord is screwed... So. Many. Lolz.

 

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58 minutes ago, Ghostly said:

Not really.  Aren't contracts usually for the whole year not a term?  After Summer term may be a different matter.

Bo-Jo starting to go rental relief route and student wanting to restart courses next year so grades and employment prospects aren't compromised.

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1 hour ago, Ghostly said:

Not really.  Aren't contracts usually for the whole year not a term?  After Summer term may be a different matter.

Yes, I remembered that after posting. Also many perhaps most students looking for a house for next year will have already signed contracts.  

Whether all those contracts can be enforced is a different matter. I imagine the chance of getting money of a bunch of foreign students who have changed their mind about studying in the UK is slim.

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35 minutes ago, koala_bear said:

Bo-Jo starting to go rental relief route and student wanting to restart courses next year so grades and employment prospects aren't compromised.

There will be lots of students wanting to do that, this has all happened on the back of a month of strikes by lecturers. 

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  • 417 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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