How does Buy to Let END!

[eek]

7 minutes ago, Heart's Ease said:

https://www.telegraph.co.uk/property/buy-to-let/inside-frenzied-buy-to-let-investor-exodus/

 

Not behind the paywall.  Spells it all out very clearly.

Snipped this to show his rotation of funds.

"Henderson and his investment partners plan to sell all their rental properties and put the money in the stock market or pension investments instead. “Landlords have had a good run in the property market and enjoyed all the growth,” he says. “They can exit and put their money somewhere else but it’s the tenants who suffer when good quality rental stock is taken out of the sector.”  "

 

As is always the case - when a house is sold by a landlord it doesn't disappear in a cloud of debris - it's either sold to another landlord or someone who was previously a tenant ends up owning a property.

[Wight Flight]

40 minutes ago, eek said:

As is always the case - when a house is sold by a landlord it doesn't disappear in a cloud of debris - it's either sold to another landlord or someone who was previously a tenant ends up owning a property.

Or someone who hadn't yet been able to move from their parents. They are more likely to be in a position to buy.

[HousePriceMania]

1 hour ago, Heart's Ease said:

https://www.telegraph.co.uk/property/buy-to-let/inside-frenzied-buy-to-let-investor-exodus/

 

Not behind the paywall.  Spells it all out very clearly.

Snipped this to show his rotation of funds.

"Henderson and his investment partners plan to sell all their rental properties and put the money in the stock market or pension investments instead. “Landlords have had a good run in the property market and enjoyed all the growth,” he says. “They can exit and put their money somewhere else but it’s the tenants who suffer when good quality rental stock is taken out of the sector.”  "

 

 

Edited February 7, 2023 by HousePriceMania

[eek]

25 minutes ago, Wight Flight said:

Or someone who hadn't yet been able to move from their parents. They are more likely to be in a position to buy.

Looks at the deposit twin A has - yep...

[HousePriceMania]

BTL....

[Boon]

There must be some kind of doublethink involved when these BTL chaps insist the tenants suffer. In the short term yes, if the tenants are kicked out. In the longer term no, because selling houses gives tenants chances to buy them. Conversely taxing amateur BTL out of existence is not a bad thing for tenants, as the bigger landlords are unlikely to be rogue, shit their pants and sell when values drop 10% or want to move back in.

The man claims he is paying tax and making losses on some of his properties, so unless another BTL investor can magic up a 1% mortgage rate or is happy to take a sub-optimum yield why would anyone be taking it off his hands and face the same situation?  

This attitude is pervasive all over the shop. For instance a flat in London here, which is fairly typical of the market at present:

https://forums.moneysavingexpert.com/discussion/6420440/struggling-to-sell-flat

Many locations are great for letting yes, but the numbers aren't stacking up at the current prices, and to buy it would risk asking for a rent so high nobody would pay it.

That is why there were lots of those buyers before, but not now. But few seem to realise it.

If these BTL people want to get out I would think the kind of prices to make the sums work are quite a lot lower than currently asking.

Still think most of the listings I have seen are akin to fishing, just dropping the bait a little lower each time before pulling up the rod and starting again with a new agent. 

Much like the people pleading poverty over cladding I think very few will crystallise a loss in the hope that some kind of bailout happens, or interest rates go back down. 

[Wight Flight]

I assume this landlord thinks he is helping the homeless crisis.

by offering a three month unfurnished let.

wanker.

 

https://www.onthemarket.com/details/4874877/

[roundhouse]

2 hours ago, Wight Flight said:

I assume this landlord thinks he is helping the homeless crisis.

by offering a three month unfurnished let.

wanker.

 

https://www.onthemarket.com/details/4874877/

Bit weird as it also says it's a long term let.

I turned up to view a place once to find it max 3 months as the house was under offer. Told the LL what a timewaster he was, why not put that in the ad to start with. Just like you say he thought he might be doing someone a favour thus mutual benefit. 

[Wight Flight]

3 minutes ago, roundhouse said:

Bit weird as it also says it's a long term let.

I turned up to view a place once to find it max 3 months as the house was under offer. Told the LL what a timewaster he was, why not put that in the ad to start with. Just like you say he thought he might be doing someone a favour thus mutual benefit. 

They do that a lot because they are too thick to change the default setting.

Here's another from today.

https://www.onthemarket.com/details/12830251/

 

Edited February 7, 2023 by Wight Flight

[Guest]

On 28/01/2023 at 09:47, Wight Flight said:

They still don't get it.

https://www.property118.com/is-anyone-else-annoyed-at-this-personal-guarantees-for-limited-companies/

This guy made me smile, it's almost as if lenders are working out the risk of a loan on a more sophisticated basis than "the equity in the BTL itself ought to cover it innit".

Quote

John

13:11 PM, 27th January 2023, About 2 weeks ago

Banks will lend you a brolly when the sun is shining and ask for it back as soon as it starts raining!
There ought to be sufficient equity in the property you are mortgaging to cover their exposure but they want to come for your house as well.

[Guest]

22 hours ago, Heart's Ease said:

https://www.telegraph.co.uk/property/buy-to-let/inside-frenzied-buy-to-let-investor-exodus/

 

Not behind the paywall.  Spells it all out very clearly.

Snipped this to show his rotation of funds.

"Henderson and his investment partners plan to sell all their rental properties and put the money in the stock market or pension investments instead. “Landlords have had a good run in the property market and enjoyed all the growth,” he says. “They can exit and put their money somewhere else but it’s the tenants who suffer when good quality rental stock is taken out of the sector.”  "

 

It's fun that they think BTLers can seamlessly rotate out of ~10% of the UK housing stock into other asset classes now that they're bored of it.

I'm sure there's enough liquidity around to mop up a trillion pounds of property that doesn't wash its face, give it a go lads.

[Wight Flight]

Spoke with my landlord today. His mortgage is going up next month. From £250 to £800 per month.

Ouch.

[JohnnyB]

14 hours ago, Wight Flight said:

Spoke with my landlord today. His mortgage is going up next month. From £250 to £800 per month.

Ouch.

There's been lots of discussion about BTLers being able to weather the storm since they've done well over the last xx years etc and can still sell for a profit.

But I think this ignores their greed and self -regard, especially for the ones with a 'porfolio' as they like to say. They'll have got used to the lifestyle of range rovers and multiple holidays for doing very little other than people farm. Seeing that disappear in the space of a year isn't going to be easy. I'd say they are more at risk of doing something stupid out of greed like chasing rents up and getting voided into oblivion or having it turned into a pop-up brothel as they loosen tenant checks.

[AWW]

On 07/02/2023 at 18:48, Boon said:

https://forums.moneysavingexpert.com/discussion/6420440/struggling-to-sell-flat

Many locations are great for letting yes, but the numbers aren't stacking up at the current prices, and to buy it would risk asking for a rent so high nobody would pay it.

That is why there were lots of those buyers before, but not now. But few seem to realise it.

From the article: "Have prices for flats dropped that low? We will soon be marketing it at the same price we bought it for in 2016"

Yes, they have. Flat in my old block was taken off the market after having the asking price reduced to just above what the owners paid for it in 2016. Nobody wants to rent it at the asking rent, nobody wants to buy it at the asking price.

[One percent]

On 09/02/2023 at 17:27, Wight Flight said:

Spoke with my landlord today. His mortgage is going up next month. From £250 to £800 per month.

Ouch.

Has he suggested that your rent increases to cover that?  

[Wight Flight]

1 hour ago, One percent said:

Has he suggested that your rent increases to cover that?  

Of course.

But he does understand t that we can't cover the entire increase.

[wherebee]

15 minutes ago, Wight Flight said:

Of course.

But he does understand t that we can't cover the entire increase.

I think that's a great idea - I'll increase my rent by exactly the same amount as you reduced our rent when the interest rates went down for years......

[Wight Flight]

3 minutes ago, wherebee said:

I think that's a great idea - I'll increase my rent by exactly the same amount as you reduced our rent when the interest rates went down for years......

Yes. A point very rarely made.

[spygirl]

Retreat of buy-to-let investors laid bare in stamp duty data

Landlord buyers at sharp end of mortgage rate rises after the ‘mini’ Budget

https://www.ft.com/content/fdacf9cd-0f46-48bc-a5be-dec780e5e3e0

Buyers of “additional homes” — buy-to-let and second properties — must pay a three percentage point surcharge in stamp duty in England and Northern Ireland. Provisional data from HM Revenue & Customs on Friday showed the number of affected transactions fell by 18 per cent in the fourth quarter compared with the same period in 2021, and was down 31 per cent on the third quarter of 2022.

 

The flow of new investment money is slowing to atrickle.

Stalemate.

LL wont be sellign to anotehr investor.

 

[spygirl]

On 09/02/2023 at 17:27, Wight Flight said:

Spoke with my landlord today. His mortgage is going up next month. From £250 to £800 per month.

Ouch.

LL face a number of shocks.

One ,the rapid icnrease in IO mortgage reapyments.

Two, HMTRC tax demand.

Both these are in play at the moment.

The final shock is the bank asking for its money back.. These will start rolling in toward the end of this year, as various LL mortgage books go wrong and the bank decides that BTL mortgages arent for worth it anymore.

 

 

[AWW]

On 11/02/2023 at 13:54, spygirl said:

The final shock is the bank asking for its money back.. These will start rolling in toward the end of this year, as various LL mortgage books go wrong and the bank decides that BTL mortgages arent for worth it anymore.

Why would the banks do this on a place where the mortgage is being covered? They'd find themselves without the income stream and with an asset that's rapidly losing value that they'd have to offload into a market that's effectively no bid.

[spygirl]

5 hours ago, AWW said:

Why would the banks do this on a place where the mortgage is being covered? They'd find themselves without the income stream and with an asset that's rapidly losing value that they'd have to offload into a market that's effectively no bid.

Bless.

BTL are commercial loans.

The only thing that banks fear more than a loss today is a bigger loss tomorrow

A failing loan today, worth 80p in the pound , may be only worth 50p in the pound 12 months later.

 

Banks put loans into pools, to keep an idea on them.

When x% of the pool goes bad then they expect the other in the pool to go bad. This is reasonable behaviour on behalf for the bank.

Banks then start a game of liquidising other loans, on the assumption if they do it first then theres still some equity left with the borrower.

This happens during every credit cycle.

Sometimes the process leaks out -

Noel Edmonds secures funding for HBOS lawsuit

Television star is backed by Therium Capital for £60m claim

https://www.ft.com/content/acf62d60-0661-11e8-9650-9c0ad2d7c5b5

The fraud wasnt calling in the loan, it was scamming the business via a business recovery agent.

The reason why this scam worked is their accountant would have gone - yep, they can call the loan in, so the idiots would have gone the restructure route.

 

 

 

[No One]

[Wight Flight]

On 10/02/2023 at 21:44, One percent said:

Has he suggested that your rent increases to cover that?  

We have agreed a rent increase of £120.

But we have another year agreed so I can live with it.

I actually think the rent has gone up so much he can no longer afford to move in as originally planned.

 

[MrXxxx]

Just thought I would leave this here for those BTL landlords whose answer to rising interest rates is "I just put up my tenants rent as they don't have any choice!" :-)