Friday, June 1, 2007

Waiting for the Landlords to bail out? or get bail-iffed out?

A fourth rate rise in nine months has left many landlords vulnerable

"buy-to-let mortgage specialists fear that lenders have relaxed their lending criteria to the point where novice investors are being tempted into trouble. Landlord Mortgages, a buy-to-let broker, says that many lenders are relying solely on credit status to approve 100 per cent loans" ... "A further concern for investors is that yields are continuing to fall, despite rents rising at their fastest rate since July last year, as landlords attempt to cover their increased costs. " ... Sub-Prime ... Sub-Prime ... Sub-Prime ...

Posted by fahrenheit451 @ 11:15 AM (385 views)
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4 thoughts on “Waiting for the Landlords to bail out? or get bail-iffed out?

  • fahrenheit451 says:

    The differrence is going to be between the “Institutional” landlord who has a maximum of 20% – 40% loan, the “Professional” landlord with a maximum of 60% loan and an over ambitious “Amateur” who goes for a 100% loan. The amateur will get burnt with interest costs rising faster than rental income. And in the current market of rising interst rates, there will be no room to MEW their way out of trouble.

    By comparison the “Professional” will be looking to get down the auction houses and buy up the properties lost by the “Amateur”. Competing with a new breed of Amateurs who will come charging in down the pig-troff of the crash. Yes we saw the same with commercial properties in the mid-90’s.

    The institutions (including local government housing deparments, alas no more), as before in the 90’s sit by in a state of paralysis and do nothing.

    Its hard to be sorry for the greedy, but I fear that the strong will always take advantage of the weak and throw them like straw into the pits of dispair.

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  • dohousescrashinthewoods says:

    Human nature, eh. Some things don’t change.

    Back to Trotters Independent Trading for most.

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  • A few years of unusually low interest rates creates a craze that draws in a swathe of suckers. Unfortunately the steam roller (higher interest rates) has now started its engines again. This time it doesn’t have any brakes and the driver has no idea how to stop it. Many of the suckers will be stuck in hot tarmac as the steam roller approaches.

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  • “… A repeat of the horrors of 1992 is only a few rate rises away.”

    Think it’s already here to be honest. The poor BTLs have taken all the risk and worked pretty much
    for free for their mortgage lenders. They’ll never want to hear the words “equity release” ever again.

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