Monday, September 24, 2007

Buy to lose is a big scam! Even Dean had to admit it

Buy to let lenders reviewing portfolios as remours of freudulent borrowing spreads

The biggest scam after the Dutch Tulips. BTL investors will lose big this time! "Mortgage lenders have been reviewing their portfolios as rumours of fraudulent borrowing unsettle the buy-to-let sector. The scale of the problem is not yet known but following the difficulties of Northern Rock, lenders are scrutinising their books to see where any potentially disastrous risks could lie."

Posted by confused76 @ 10:37 AM (1547 views)
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14 thoughts on “Buy to lose is a big scam! Even Dean had to admit it

  • “Throughout the buy-to-let mortgage sector there are particularly high levels of anxiety about buy-to-let lending on new-build flats in regional cities across the UK. Prices on these properties are decreasing and tenants are in short supply.”

    I smell blood! I smell repossessions!

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  • Lenders have been very active recently:

    1. Trimming the amount loaned so that lenders need 15% deposit to get the lowest rate mortgage.

    2. Increasing rates generally, adding 0.1% to rates.

    3. Being very scrupulous and slowing down the lending cycle to keep funds back.

    Thurrock council (Essex) has experienced higher emergency re-housing recently as result of reposessions, some of them are BTLs. This could be what is influencing the Banks and Building Societies, I’m not certain.

    I’ve said this before, but a reposession takes at least 4 months to work through the default/reminder/court cycle. What we are experiencing relates to pressures prior to the last rate increase.

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  • tyrellcorporation says:

    I’m glad to see Nationwide have steered clear of lending to this tricksters since 2005. I always thought the BTL market was the key to HPC and If confidence drains from this sector we’re gonna be quids in.

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  • 1,100 properties on rightmove in bristol under £160k

    I’d say the dumping of BTL properties is well on the way round here.

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  • Maybe Dean has finally realised that you guys had something worthwhile to say after all. Good on him. If he’s drawing landlords’ attention the the problems of BTL then their rush to the exit may be even quicker. Pity he doesn’t have a link to this site, though, but I suppose that would be asking too much!

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  • tyrellcorporation says:

    Su, in the interevening period he’s probably been offloading his portfolio to newbee shamateur landlords with more money than sense! If he is starting to turn into a bear then that’s great.

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  • dohousescrashinthewoods says:

    So this is why the boom went on longer than anyone could reasonably imagine.
    BTL was fraught with fraud which made it attractive to keep cranking the handle (and the prices) long after genuine purchases were out of their depth.
    Presumably no one cared that the flats would fall apart after 6 months, that they were too small to house domestic animals (let alone their owners) or that they were in useless locations.
    This presumably also helps to explain why they were hotly traded as “units” rather than as homes?

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  • converted lurker says:

    disagree with the repos. impact, 12-18 month in this property cycle is my guesstimate. It is different this time in as much as lenders do not have as much power as in late 80’s/early 90’s, courts are more lenient and the lenders do not want property back or the neg. impact it causes. However, when the dam bursts, in relation to repo numbers, I reckon it could be devestating =:¬(

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  • let me get this right…

    USA = Subprime

    UK= Fraud

    Spain = Holiday brains

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  • This sort of fraud, where the seller ‘creates’ two prices for his goods, one for the buyer and one for the finance provider, was a common practice within the second hand car trade up to about ten years ago, it was called ‘bumping’. Could it be that the level of honesty that we have been accustomed to within the second hand car game (shades of Arthur Daley) has spilled over into the ‘buy to let’ market? Surely not! Surely the honest professionals involved would never consider such a thing because the FSA and the BOE would spot it straight away………. er……..and punish any wrong doing ………er………what do you think Darling?

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  • Please stay calm. I suggest that you start looking at one of the land registry price websites eg. www,houseprices.co.uk and you will soon see prices starting to tumble. In my town where they have an influx of flats in an area I call “Buy to Let Heaven” the last flat sold for £125,000 but 2 years and 4 months before it was purchased for £138,000! I know that it may not sound much but these UNITS were built and purchased at the time when interest rates at their lowest and yields on renting were high.

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  • planning4acrash says:

    I hope you are right about Bristol, I dream of leaving the big smoke for an office that’s 1hr from the mountains and surf!!

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  • Tyrell. You’re a cynic! But a wise old bird all the same! 🙂

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  • P4AC. Before you settle on Bristol, take a look at what Scotland can offer:

    http://adventure.visitscotland.com/activities/water/surfing/

    And there’s loads of mountains!! But hurry! The highlands are getting a wee bit expensive on the housing front, but not to worry – plenty of cheaper places to live and still near the mountains & surf!! 🙂

    Hmm. I wonder if I could get a better paid job working for Scottish Tourism!

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