Jump to content
House Price Crash Forum
Sign in to follow this  
Converted Lurker

Kensington Launch 'have You Got Pulse?' Buy To Let Mortgage

Recommended Posts

There are now no rules, no need for rental to match or be in excess of mortgage payment, anything goes :o

http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0

Ian Giles, Director of Marketing at Kensington, said:

"The buy to let market is changing. There continue to be real opportunities presented by buy to let, but with house prices continuing to increase, interest rates rising and rental yields remaining fairly static, it is becoming much harder for new investors to enter the market. Kensington have recognised this and built a product to help more borrowers benefit from the sector. If you have enough extra income at the end of each month to service the mortgage on an investment property, why should you be constrained by rental yields? This product will empower a new breed of buy to let investor, but it is just the start, and our customers can look forward to more innovations from Kensington in the near future."

Share this post


Link to post
Share on other sites
This product will empower a new breed of buy to let investor

indeed, one so fundamentally ill-suited to survival that it never makes it out of the lab.

Share this post


Link to post
Share on other sites
There are now no rules, no need for rental to match or be in excess of mortgage payment, anything goes :o

http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0

Ian Giles, Director of Marketing at Kensington, said:

"The buy to let market is changing. There continue to be real opportunities presented by buy to let, but with house prices continuing to increase, interest rates rising and rental yields remaining fairly static, it is becoming much harder for new investors to enter the market. Kensington have recognised this and built a product to help more borrowers benefit from the sector. If you have enough extra income at the end of each month to service the mortgage on an investment property, why should you be constrained by rental yields? This product will empower a new breed of buy to let investor, but it is just the start, and our customers can look forward to more innovations from Kensington in the near future."

They say every village has an idiot. Kensington are obviously hoping he's slept with his sister and produced 15 children.

Share this post


Link to post
Share on other sites
They say every village has an idiot. Kensington are obviously hoping he's slept with his sister and produced 15 children.

I recall ge launching a buy to let product that asked that rent matched payments and then another that needed to be within a 10% shortfall, but this is as open an admission as I've ever seen from buy to let lenders that rental is irrelevant and its all been about capital appreciation/speculation...(or loss), in the very long term. Stunning IMHO

Edited by Converted Lurker

Share this post


Link to post
Share on other sites

The longer this goes on for, the more detached from fundamentals they get and the higher house prices go the more convinced they become that they are going to get away with it.

Why don't they just change the name of the company to Icarus loans. ;)

Share this post


Link to post
Share on other sites
There are now no rules, no need for rental to match or be in excess of mortgage payment, anything goes :o

http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0

Ian Giles, Director of Marketing at Kensington, said:

"The buy to let market is changing. There continue to be real opportunities presented by buy to let, but with house prices continuing to increase, interest rates rising and rental yields remaining fairly static, it is becoming much harder for new investors to enter the market. Kensington have recognised this and built a product to help more borrowers benefit from the sector. If you have enough extra income at the end of each month to service the mortgage on an investment property, why should you be constrained by rental yields? This product will empower a new breed of buy to let investor, but it is just the start, and our customers can look forward to more innovations from Kensington in the near future."

Isnt this called sub-prime i.e. not matching normal lending criteria??

Share this post


Link to post
Share on other sites
The longer this goes on for, the more detached from fundamentals they get and the higher house prices go the more convinced they become that they are going to get away with it.

Why don't they just change the name of the company to Icarus loans. ;)

I think "zeppelin loans" might be more appropriate - about to go down in a massive hydrogen conflagration, with the loss of all hands. We will probably see quite a few more creative mortgage products over the coming months.

Share this post


Link to post
Share on other sites
I think "zeppelin loans" might be more appropriate - about to go down in a massive hydrogen conflagration, with the loss of all hands. We will probably see quite a few more creative mortgage products over the coming months.

Do you think Barratt will start building a new house type - The Hindenberg?

Share this post


Link to post
Share on other sites
Do you think Barratt will start building a new house type - The Hindenberg?

Probably but for houses, the "Nautilus" range of housing might be more appropriate due to the tendancy to build on flood plains

Share this post


Link to post
Share on other sites
Guest d23
There are now no rules, no need for rental to match or be in excess of mortgage payment, anything goes :o

http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0

Ian Giles, Director of Marketing at Kensington, said:

"The buy to let market is changing. There continue to be real opportunities presented by buy to let, but with house prices continuing to increase, interest rates rising and rental yields remaining fairly static, it is becoming much harder for new investors to enter the market. Kensington have recognised this and built a product to help more borrowers benefit from the sector. If you have enough extra income at the end of each month to service the mortgage on an investment property, why should you be constrained by rental yields? This product will empower a new breed of buy to let investor, but it is just the start, and our customers can look forward to more innovations from Kensington in the near future."

that credit crunch is really starting to bite now

Share this post


Link to post
Share on other sites
Isnt this called sub-prime i.e. not matching normal lending criteria??

Subprime with a capital S. Us Bears have been saying for a long time that the subprime fall out that America is experiencing will hit our shores at somepoint. The Bulls and VI's have always maintained that lending criteria are much tighter in the the UK.

Kensington have just made liers of them all. Our subprime is as bad or worse than the US subprime, that is patently obvious know.

My worry is who is going to or have been buying the debt / risk from Kensington? I would bet it will be the likes of our big pension fund managers like Nowwich Union or Standard Life. The latter manage my pension :o This is all getting way out of hand. The new world of Hedge funds and Financial Instruments is so completely lacking in transparency the regulators have been left way out in the cold and we are all exposed.

Edited by FTBagain

Share this post


Link to post
Share on other sites

Strange that they should make this announcement the day after the rate rise and all the very bearish headlines. If this isn't an indicator that BTL and the housing sector is in massive trouble then I don't know what is. What puzzles me the most though is why Kensington are happy to take this risk in light of all the bearish news and indicators. They are going to be fecked when the market falls surely or is this a case where CDO and MBS come into play ( no I dont understand them ) ? i.e some other poor sucker is going to be carrying the can - if so who and are they certifiably insane ?

Mind you it is very decent and generous of them to help out would be landlords, so thoughtful.

Share this post


Link to post
Share on other sites
Subprime with a capital S. Us Bears have been saying for a long time that the subprime fall out that America is experiencing will hit our shores at somepoint. The Bulls and VI's have always maintained that lending criteria are much tighter in the the UK.

Kensington have just made liers over them all.

My worry is who is going to or have been buying the debt / risk from Kensington? I would bet it will be the likes of our big pension fund managers like Nowwich Union or Standard Life. The latter manage my pension :o This is all getting way out of hand. The new world of Hedge funds and Financial Instruments is so completely lacking in transparency the regulators have been left way out in the cold and we are all exposed.

Thats what I'd like to know and I'm writing to my Pension Fund company (I don't expect a reply). Presumably for Kensington to offer these products, then a "greater fool" must exist who is prepared to underwrite them, and even more greater fools who will add them to their portfolio's. Just who are these greater fools? I'd assume that Kensington BTL/subprime would be bought by Hedge Funds.

Share this post


Link to post
Share on other sites
that credit crunch is really starting to bite now

dead right, there's still a lot of silly money trying to find a home in silly projects, but as a poster has pointed out on this thread, who is going to 'buy the debt'? It's akin to war of the worlds when the aliens are fukced up by simple germs, not many predicted that credit would eventually be turned off because printing more money/creating more decimal digits and creating more debt products on a product soaked market becomes pointless. That's where we are headed though surely?

Share this post


Link to post
Share on other sites
Strange that they should make this announcement the day after the rate rise and all the very bearish headlines. If this isn't an indicator that BTL and the housing sector is in massive trouble then I don't know what is. What puzzles me the most though is why Kensington are happy to take this risk in light of all the bearish news and indicators. They are going to be fecked when the market falls surely or is this a case where CDO and MBS come into play ( no I dont understand them ) ? i.e some other poor sucker is going to be carrying the can - if so who and are they certifiably insane ?

Mind you it is very decent and generous of them to help out would be landlords, so thoughtful.

IIRC standard and poors got a 'telling off' rating sub prime bonds as A+ rated when they were sub sub prime, wtf would you rate this as, ZZZ? They'll probably do it as 125%+ next :blink: to cover furniture and the loss in rent v payments for the first two years :o there really is nowhere left to go once you've virtually decimated any semblance of sound lending principles, this is chasing the market down to oblivion IMHO

Share this post


Link to post
Share on other sites
Thats what I'd like to know and I'm writing to my Pension Fund company (I don't expect a reply). Presumably for Kensington to offer these products, then a "greater fool" must exist who is prepared to underwrite them, and even more greater fools who will add them to their portfolio's. Just who are these greater fools? I'd assume that Kensington BTL/subprime would be bought by Hedge Funds.

I have been thinking about it also.

My fund is a big company fund (formerly a part of the Civil Service Fund). The trustees have Standard Life amougst others managing the fund. My pension is (was :ph34r: ) a good one. Taken me 18 years to build up (18 years in the same out fit usually means being on a lower pay scale :angry: so it has cost me to do it) and the trustees could easily be in the process of blowing it. :(

Share this post


Link to post
Share on other sites

Apparently they have a special Chinese hen named Guai Guai that has come up with this fantastic, fool-proof scheme.

Abacus_Master.jpg

BTW, Investec is in the process of purchasing Kensington.

from Bloomberg...(30/05/07).

Revenue at Kensington will fall ``significantly'' this year,

Kensington said today in a separate statement.

``Trading conditions have been challenging in the first five

months to April 30,'' Kensington said.

The support from Investec will probably make Kensington's

warning on profit today its last, Bridgewell analyst Katrina

Preston said in London. ``Investec's offer looks fair.''

In light of poor volumes, falling margins, a difficult outlook

and Kensington's reduced ability to fund itself, ``we support the

Investec bid,'' James Hutson, a London-based analyst at Keefe,

Bruyette & Woods Ltd., wrote to clients.

The U.K. subprime market is different than the U.S., Bradley

Fried, the CEO of Investec's U.K. unit, said by telephone. Defaults

on U.S. subprime mortgages have risen to a seven-year high.

``The U.K. market is underpinned by shortages and robust

economic growth,'' Fried said. ``We've also taken into account a 25

basis-point increase in interest rates.''

What prudence! They have taken into account a 0.25% increase in interest rates!

post-6049-1183724512_thumb.jpg

Share this post


Link to post
Share on other sites
dead right, there's still a lot of silly money trying to find a home in silly projects, but as a poster has pointed out on this thread, who is going to 'buy the debt'? It's akin to war of the worlds when the aliens are fukced up by simple germs, not many predicted that credit would eventually be turned off because printing more money/creating more decimal digits and creating more debt products on a product soaked market becomes pointless. That's where we are headed though surely?

Barclays keep ringing me up to go to one of their BTL evenigs - getting sick of it: they won`t let go!! :( :angry: :unsure::rolleyes:

Share this post


Link to post
Share on other sites
I have been thinking about it also.

My fund is a big company fund (formerly a part of the Civil Service Fund). The trustees have Standard Life amougst others managing the fund. My pension is (was :ph34r: ) a good one. Taken me 18 years to build up (18 years in the same out fit usually means being on a lower pay scale :angry: so it has cost me to do it) and the trustees could easily be in the process of blowing it. :(

Even if your trustee's have bought this "toxic waste" (not intentionally, but deceived by poor credit rating agencies) what will they do? Its not that there is a market for this stuff. Its illiquid and has to be held to maturity.

Share this post


Link to post
Share on other sites
Barclays keep ringing me up to go to one of their BTL evenigs - getting sick of it: they won`t let go!! :( :angry: :unsure::rolleyes:

You should go! Give them all some food for thought!

:lol:

Share this post


Link to post
Share on other sites
IIRC standard and poors got a 'telling off' rating sub prime bonds as A+ rated when they were sub sub prime, wtf would you rate this as, ZZZ? They'll probably do it as 125%+ next :blink: to cover furniture and the loss in rent v payments for the first two years :o there really is nowhere left to go once you've virtually decimated any semblance of sound lending principles, this is chasing the market down to oblivion IMHO

My understanding is that all of the sub prime loans are put into a big pot. The rating that the risk is sold at is based on where you are in the risk queue. See the video below for more info.

Share this post


Link to post
Share on other sites
Strange that they should make this announcement the day after the rate rise and all the very bearish headlines. If this isn't an indicator that BTL and the housing sector is in massive trouble then I don't know what is. What puzzles me the most though is why Kensington are happy to take this risk in light of all the bearish news and indicators. They are going to be fecked when the market falls surely or is this a case where CDO and MBS come into play ( no I dont understand them ) ? i.e some other poor sucker is going to be carrying the can - if so who and are they certifiably insane ?

Mind you it is very decent and generous of them to help out would be landlords, so thoughtful.

The loan will be secured against the BTLetter's main home.

Yes squire, of course we'll lend you the money to buy a flat whose rent is £400 a month less than the mortgage - you can afford it can't you? Just in case you can't, we'll need to take a little charge on your main home - we don't want to find ourselves out of pocket if your circumstances change and you decide spending £400 a month on a depreciating asset is not to your taste.

On a serious note, this really is an act of desperation.

Share this post


Link to post
Share on other sites
Even if your trustee's have bought this "toxic waste" (not intentionally, but deceived by poor credit rating agencies) what will they do? Its not that there is a market for this stuff. Its illiquid and has to be held to maturity.

I read an artical somewhere recently (from another thread on here) that suggested that thanks to the credit and valuation processes around these things (CDO's and CDS's) there is a brief opportuntiy to cash in before the true value becomes widely known. Probably too late already :(

http://www.financialsense.com/fsu/editoria.../2007/0703.html

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 351 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.