Buy To Let Investment Now Over As Nationwide Raises Deposit Requirements To 25%

[Converted Lurker]

Buy to let investment now over as Nationwide raises deposit requirements to 25%

Nationwide has signalled the death knell to buy to let investors by announcing that is was effectively 'shutting the door' on buy to investment as it raised its deposit requirements (for its best mortgage rates) to 25%. Buy to let investors, who typically revolve their credit agreements and flex more equity out of each property with each 'new deal' to increase their portfolio will be left stunned by this development...

Already reeling by specialist buy to let lender Paragon's announcement that they will no longer lend into the buy to let market, coming some time after their shares were suspended, then re-listed, then continued falling; despite a rights issue that had to be taken up by their rights issuer /underwriter UBS, this news must be devastating to the buy to let investor, who have entered the housing market en-masse since 2005.

http://firstrung.co.uk/articles.asp?pageid...&cat=65-0-0

[Guest barebear]

All Ive got to say to this is Giraffe BTL. 10% deposit interest well under 6%.Long way to go yet.Just google for more info.

[OLDFTB]

All Ive got to say to this is Giraffe BTL. 10% deposit interest well under 6%.Long way to go yet.Just google for more info.

Thanks for the tip. I want to get my BTL Portfolio up & running asap before house prices crash.

[Minesapint]

All Ive got to say to this is Giraffe BTL. 10% deposit interest well under 6%.Long way to go yet.Just google for more info.

Interestingly there lending criteria says 85% LTV

http://www.giraffemoney.co.uk/reference/le...teria/buytolet/

there is also a rental cap of 100% of interest

oh and if you repay within 5years you get a 5% penalty! (the only 90% deal is 5 years fix)

[Converted Lurker]

All Ive got to say to this is Giraffe BTL. 10% deposit interest well under 6%.Long way to go yet.Just google for more info.

erm...thanks for that

[Guest barebear]

erm...thanks for that

So lets just live in complete denial then shall we ?

The fact is that although Nationwide might be upping the anti,you can still get these deals elsewhere and sub-prime for that matter as well.

[Guest X-QUORK]

The BBC seem to have a different take on this:

UK BTL market still thriving

[Converted Lurker]

So lets just live in complete denial then shall we ?

The fact is that although Nationwide might be upping the anti,you can still get these deals elsewhere and sub-prime for that matter as well.

75% of below prime BTL product has been stripped out of the market in past six months, what's left is the pockets cash already originated, previously would have been bundled into MBS, which will now have to stay on balance sheet as the bond market wont buy 'em I give it 2 months before you cant get BTL without it being old school non status - 25% deposits. "The only reason banks and lenders are continuing to hype BTL is to take money of the remaning mugs and to clean them out"* ...fukcin brilliant

* sshhh....a quote from a former MD/CEO of sub prime lender

[Guest barebear]

75% of below prime BTL product has been stripped out of the market in past six months, what's left is the pockets cash already originated, previously would have been bundled into MBS, which will now have to stay on balance sheet as the bond market wont buy 'em I give it 2 months before you cant get BTL without it being old school non status - 25% deposits. "The only reason banks and lenders are continuing to hype BTL is to take money of the remaning mugs and to clean them out"* ...fukcin brilliant

* sshhh....a quote from a former MD/CEO of sub prime lender

Well lets wait until it happens then shall we .

[Converted Lurker]

Well lets wait until it happens then shall we .

yes let's agree to do that shall we please feel free to have last word

[silver surfer]

this news must be devastating to the buy to let investor, who have entered the housing market en-masse since 2005.

For some BTL landlords...but not for all. The BTL landlords I know fall into three very different categories, some are squealing but others are pretty indifferent.

One or two are long term landlords who built up the majority of their portfolios many years ago, they didn't bail out when the property market looked like it might fall in 2005, and I doubt they're going to jump now.

At the other extreme are a couple of individuals where I work, who have climbed on the bandwagon in the last few years with sky-high LTV ratios, this group isn't sleeping too well at the moment!

And in the middle are a couple of "accidental landlords". People who got married and instead of selling one of their properties kept it and rented it out, people who rented out their old house when they moved for a new job, or people who inherited a property and decided to keep it and rent it out. I get the impression this group may change their attitudes if they see a prolonged decline in property prices, but I don't see them rushing into a decision. We probably need both this spring house selling season and the next one to fail miserably before the general consensus is that property is a busted flush.

The trouble is I've no idea how the total number of BTL landlords breaks down, if most BTL properties are owned by recent and highly geared landlords then the BTL crash could happen quickly, but if most BTL landlords are more experienced and have deeper pockets then it may prove much slower.

[Guest barebear]

yes let's agree to do that shall we please feel free to have last word

Awe sorry did you wnt the last word even though your jumping the gun and wrong wrong wrong .Look I can do silly little winks as well and be sarky.

[Converted Lurker]

For some BTL landlords...but not for all. The BTL landlords I know fall into three very different categories, some are squealing but others are pretty indifferent.

One or two are long term landlords who built up the majority of their portfolios many years ago, they didn't bail out when the property market looked like it might fall in 2005, and I doubt they're going to jump now.

At the other extreme are a couple of individuals where I work, who have climbed on the bandwagon in the last few years with sky-high LTV ratios, this group isn't sleeping too well at the moment!

And in the middle are a couple of "accidental landlords". People who got married and instead of selling one of their properties kept it and rented it out, people who rented out their old house when they moved for a new job, or people who inherited a property and decided to keep it and rent it out. I get the impression this group may change their attitudes if they see a prolonged decline in property prices, but I don't see them rushing into a decision. We probably need both this spring house selling season and the next one to fail miserably before the general consensus is that property is a busted flush.

The trouble is I've no idea how the total number of BTL landlords breaks down, if most BTL properties are owned by recent and highly geared landlords then the BTL crash could happen quickly, but if most BTL landlords are more experienced and have deeper pockets then it may prove much slower.

We all have contacts/anecdotes that highlight very little when looking at the overall market, we have to deal with averages and meaningful data IMHO to make vaild arguments. iirc BTL has only existed as a phenomena for approx. ten years (ARLA). The stats from the CML suggest it (BTL) went mainstream from 2004 onwards. Over half of BTL mortgage business has been written in the past four years. Not sure of the % crash that would wipe out (average) equity gains made since then, 28%? not good is it. Banks and lenders are actively encouraging BTL mortgages as the intelligence is that there's money to take back, where better to find it than off the criminally naive

Edited February 26, 2008 by Converted Lurker

[silver surfer]

We all have contacts/anecdotes that highlight very little when looking at the overall market, we have to deal with averages and meaningful data IMHO to make vaild arguments. iirc BTL has only existed as a phenomena for approx. ten years (ARLA). The stats from the CML suggest it (BTL) went mainstream from 2004 onwards. Over half of BTL mortgage business has been written in the past four years. Not sure of the % crash that would wipe out (average) equity gains made since then, 28%? not good is it. Banks and lenders are actively encouraging BTL mortgages as the intelligence is that there's money to take back, where better to find it than off the criminally naive

I couldn't agree more that we need a rigorous, fact based analysis. Which is why today's data from the CML, suggesting a significant increase in BTL lending, is so concerning.

[Blue Peter]

Banks and lenders are actively encouraging BTL mortgages as the intelligence is that there's money to take back, where better to find it than off the criminally naive

Being a bear of very little brain, I'm a bit confused by this thread. The sub-title says "dramatic representation, may not ever happen!!"...so are you predicting what will happen? or is it happening? or is this just a possible scenario?

Secondly, in the above, you're saying that lenders believe that there are people with a lot of cash (as opposed to "equity releasers"?) out there, and so they are targetting them?

Peter.

[Guest barebear]

Being a bear of very little brain, I'm a bit confused by this thread. The sub-title says "dramatic representation, may not ever happen!!"...so are you predicting what will happen? or is it happening? or is this just a possible scenario?

Secondly, in the above, you're saying that lenders believe that there are people with a lot of cash (as opposed to "equity releasers"?) out there, and so they are targetting them?

Peter.

Yep the whole thread is a bit 'previous'! I know lets have a house prices drop 0.2 % all herald the great crash thread !! Oh I forgot

[Thread Killer]

"The only reason banks and lenders are continuing to hype BTL is to take money of the remaning mugs and to clean them out"* ...fukcin brilliant

* sshhh....a quote from a former MD/CEO of sub prime lender

Is that for real?

Was this a written or verbal comment, in public or private?

Or was it meant as a joke?

[Converted Lurker]

I couldn't agree more that we need a rigorous, fact based analysis. Which is why today's data from the CML, suggesting a significant increase in BTL lending, is so concerning.

I think they're right and personally I dont find it worrying at all, just symptomatic. BTL did go a bit crazy in the last six months of 2007, just after the credit crunch started, justice, ironic, bad luck....nah just plain funny IMHO.

[Converted Lurker]

Is that for real?

Was this a written or verbal comment, in public or private?

Or was it meant as a joke?

private.

[Converted Lurker]

Being a bear of very little brain, I'm a bit confused by this thread. The sub-title says "dramatic representation, may not ever happen!!"...so are you predicting what will happen? or is it happening? or is this just a possible scenario?

Secondly, in the above, you're saying that lenders believe that there are people with a lot of cash (as opposed to "equity releasers"?) out there, and so they are targetting them?

Peter.

The article was meant to be a sophisticated ironic reply to all the anti FTB propoganda in the mainstream media of late That worked then

[Blue Peter]

The article was meant to be a sophisticated ironic reply to all the anti FTB propoganda in the mainstream media of late That worked then

'sophisticated' - remember that this is the UK, you're dealing with

Peter.

[Converted Lurker]

'sophisticated' - remember that this is the UK, you're dealing with

Peter.

I'm at that age were the kids are telling me I'm laughing at my own jokes and no one else is, dangerous territory obviously

Edited February 26, 2008 by Converted Lurker

[Ash4781]

this restriction on lending is grwoing exponentially by the week.One year they'll give you all you want and the next they're sending you margin calls first class.How one earth are these BTLers going to remo?punitive SVR for them methinks.

Those predicting a slow long downtrend might be surprised.The snowball is getting mighty big.

Where is the demand going to come from to hold up prices ?

Where are the repo'd people going to live ? (council waiting lists are bursting)

Or is the plan to buy up all the repo's from the BTL's.

Edited February 26, 2008 by Ash4781

[Guest happy?]

All Ive got to say to this is Giraffe BTL. 10% deposit interest well under 6%.Long way to go yet.Just google for more info.

Giraffe - because you can never stick your neck out too far....

[mrpleasant]

The fact is that although Nationwide might be upping the anti,you can still get these deals elsewhere and sub-prime for that matter as well.

It's not really a 'deal' if they want your right nut as a deposit, is it? I mean, if I'm going to borrow an enormous sum of money and effectively hand over my privates to complete the transaction, I'd rather the lender was a name I'd actually heard of. 'Giraffe Mortgages' - what the f***?