Sunday, August 17, 2008

Buy-to-Regret risk management

22 Buy To Let Mortgage Bargains

Most buy-to-let deals now require at least a 25% deposit and the most competitive deals are reserved for those with 40% or 50% upfront. TMW offers a two-year tracker rate from 5.49%, but you will need a massive 50% deposit to get it. If you have 35% a rate of 5.59% is available, and both deals come with a large fee of 2.5%.

Posted by pendulum @ 08:36 AM (703 views)
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4 thoughts on “Buy-to-Regret risk management

  • japanese uncle says:

    I would like to repost the following:
    In view of the accelerating development of the credit crunch unfolding right now, none can predict what the market would be in the latter half of this year. As I mentioned earlier, 50% deposit requirement is no longer an imaginary nonsense. It’s the real possibility. And in that event, how many of the potential buyers can really raise such amount unless the house price itself is reduced by half?

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  • a massive “de-leveraging” is under way. Prices have nowhere to but down.

    the math is so easy:

    deposits up from 10% to 25% ==> house prices fall by 60%

    and it does not matter that “people have built equity in their houses” since the price direction is driven at the margins, i.e. by FTBs and BTL-entrants, two species that have all but disappeared

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  • Trouble is Rents are coming down in real terms as the market gets flooded with vacant properties. Any BTLers with these kinds of funds will want to see real potential in their investment when they are locking away such sums and not want to expand their existing portfolios. In fact they will probably want to trim what they have at the moment.

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  • Buy to plummet ?

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