How does Buy to Let END!

[Wight Flight]

This week's Saturday smile

https://www.property118.com/eviction-ban-extended-another-2-months/#comments

And

https://www.property118.com/mortgage-company-put-me-on-variable-rate-doubling-my-interest-payments/

[UnconventionalWisdom]

39 minutes ago, Wight Flight said:

This week's Saturday smile

https://www.property118.com/eviction-ban-extended-another-2-months/#comments

And

https://www.property118.com/mortgage-company-put-me-on-variable-rate-doubling-my-interest-payments/

They appear to be shitting themselves. Now people are actually thinking before taking on mountains of debt 

[TheCountOfNowhere]

44 minutes ago, Wight Flight said:

This week's Saturday smile

https://www.property118.com/eviction-ban-extended-another-2-months/#comments

And

https://www.property118.com/mortgage-company-put-me-on-variable-rate-doubling-my-interest-payments/

As the man used to pay...just whack up the rents, innit

[Wight Flight]

5 minutes ago, UnconventionalWisdom said:

They appear to be shitting themselves. Now people are actually thinking before taking on mountains of debt 

I have been trying to find info on how many tenants are in arrears, without success.

There could be a hell of a lot of evictions in Q4.

But will there be any solvent tenants to replace those evicted?

 

Edited June 13, 2020 by Wight Flight

[UnconventionalWisdom]

Just now, Wight Flight said:

I have been trying to find info on how many tenants are in arrears, without success.

There could be a hell of a lot of evictions in Q4.

But will here be any solvent tenants to replace those evicted?

 

25% of working population are apparently furloughed. If true, a lot will unfortunately lose their jobs. 

Yep, few will be moving into an overpriced flat in city centres. HMOs are buggered. Many people went back to their parents to avoid being stuck in a shoebox room. Most won't move in to new places knowing there's a good chance of a second lockdown in autumn. 

[spygirl]

51 minutes ago, Wight Flight said:

This week's Saturday smile

https://www.property118.com/eviction-ban-extended-another-2-months/#comments

And

https://www.property118.com/mortgage-company-put-me-on-variable-rate-doubling-my-interest-payments/

The eviction ban and restrictions will be making the banks shit themselves. The LLs are just collateral.

And SVR after that 2 year teaser rate needs to be called Surprisingly Vast  Rate.

The economic n political risks have shifted so much since that initial  teaser rate. 

The game for the last 5 years has been- short term teaser, then demand reduction in LTV or get a high svr- approaching 8%.

BTL will see every bit of equity sucked out of LLs til they are bust.

Blandundersigh guessed that was part of the plan - suck out existing equity to reduce bank debt.

[spygirl]

24 minutes ago, Wight Flight said:

I have been trying to find info on how many tenants are in arrears, without success.

There could be a hell of a lot of evictions in Q4.

But will there be any solvent tenants to replace those evicted?

 

I'm more interest in finding how much housing stock is private rentals.

I reckon some towns have gone from ~5% private rentals in the mid 90s to well over 50% today.

These places are fucked in a slow down. Half the population will up n leave.

Lots of private rentals make regional economies really volatile, in a downward way.

Edited June 13, 2020 by spygirl

[eek]

5 minutes ago, spygirl said:

I'm more interest in finding how much housing stock is private rentals.

I reckon some towns have gone from ~5% private rentals in the mid 90s to well over 50% today.

These places are fucked in a slow down. Half the population will up n leave.

Lots of private rentals make regional economies really volatile, in a downward way.

That should be identifiable using the EPC and the council tax registers.  Rental properties will have a rental flag on the EPC.

[Wight Flight]

1 minute ago, eek said:

That should be identifiable using the EPC and the council tax registers.  Rental properties will have a rental flag on the EPC.

Do they?

Never knew that.

[eek]

1 minute ago, Wight Flight said:

Do they?

Never knew that.

You have to specify the purpose of the certificate (either sale or rental).

[Castlevania]

5 hours ago, eek said:

You have to specify the purpose of the certificate (either sale or rental).

I thought they lasted 10 years? So if you bought a house to rent out I assume you could just use the EPC commissioned for the sale.

[Wight Flight]

And this is exactly why we should have kept the freeze on LHA

https://www.property118.com/local-housing-allowance-and-rent-increase/#comments

[Frank Hovis]

3 minutes ago, Wight Flight said:

And this is exactly why we should have kept the freeze on LHA

https://www.property118.com/local-housing-allowance-and-rent-increase/#comments

The household aspect of LHA is great as unlike HB it won't pay the rent for one person to live in a three bed house.

But yes it has now become like minimum wage with it setting the minimum price for rents in an area; excluding the limited number of social rents.

[sancho panza]

On 13/06/2020 at 10:30, spygirl said:

I'm more interest in finding how much housing stock is private rentals.

I reckon some towns have gone from ~5% private rentals in the mid 90s to well over 50% today.

These places are fucked in a slow down. Half the population will up n leave.

Lots of private rentals make regional economies really volatile, in a downward way.

It's one of the reasons that we rent,If I don't like the way an area is going,it's one month's notice and the mrs and kids are out.Issues sometimes finding another place but I reckon some people could get stuck in Liecester in the middle of a religious war and then you'll never get out.

[Castlevania]

1 hour ago, Wight Flight said:

And this is exactly why we should have kept the freeze on LHA

https://www.property118.com/local-housing-allowance-and-rent-increase/#comments

They increased LHA? Why? 

For those that actually pay rent out of their own pockets it’s like the worst tax hike. You have less each month and it goes to slumlords. 

Most rates where I used to live have gone up 20%. Ridiculous.

Edited June 20, 2020 by Castlevania

[Wight Flight]

28 minutes ago, Castlevania said:

They increased LHA? Why? 

For those that actually pay rent out of their own pockets it’s like the worst tax hike. You have less each month and it goes to slumlords. 

Most rates where I used to live have gone up 20%. Ridiculous.

Because LHA sets the floor for rents.

Rent and interest rate sets the price a LL can pay, which sets the price everyone has to pay.

Putting LHA up is the easiest way to maintain house prices.

Edit. And shelter just don't get it.

https://blog.shelter.org.uk/2020/03/new-lha-rates-what-do-they-mean/

Edited June 20, 2020 by Wight Flight

[Castlevania]

13 minutes ago, Wight Flight said:

Because LHA sets the floor for rents.

Rent and interest rate sets the price a LL can pay, which sets the price everyone has to pay.

Putting LHA up is the easiest way to maintain house prices.

Edit. And shelter just don't get it.

https://blog.shelter.org.uk/2020/03/new-lha-rates-what-do-they-mean/

I know that. It’s just a kick in the teeth for those who rent and pay it out of their own pocket. It kills any incentive for those on low incomes to try and better themselves. It drags people down as opposed to lifting them up. 

[Wight Flight]

2 minutes ago, Castlevania said:

I know that. It’s just a kick in the teeth for those who rent and pay it out of their own pocket. It kills any incentive for those on low incomes to try and better themselves. It drags people down as opposed to lifting them up. 

I don't think the government want to think about people that pay their own rent. Why would they even exist, as we are always told it is cheaper to buy than rent, ergo those people should really buy and become a mortgage slave.

[spygirl]

Tougher rules for buy-to-let landlords

https://www.thetimes.co.uk/article/tougher-rules-for-buy-to-let-landlords-ddx9kvcxq

Barclays is to stop giving mortgages to buy-to-let landlords who buy property through their own limited company.

From June 26 it will also no longer offer mortgages to private landlords looking to buy properties with more than one unit and to limited-liability partnerships (companies set up by at least two people) as well as limited companies that can be registered to only one person. The bank said that it sold very few of these mortgages.

Aaron Strutt at Trinity Financial Group, a mortgage broker, said: “Lenders are wondering how they can leave themselves less exposed to the economic fallout from the pandemic.”

Buying a property through a limited company has become increasingly popular with investors because you can claim relief on your mortgage interest, a

Continue reading

[spygirl]

Nowhere to run to...

Nowhere to hide...

[dgul]

50 minutes ago, spygirl said:

Tougher rules for buy-to-let landlords

https://www.thetimes.co.uk/article/tougher-rules-for-buy-to-let-landlords-ddx9kvcxq

Barclays is to stop giving mortgages to buy-to-let landlords who buy property through their own limited company.

 

The important bit isn't so much that they've changed tack (it was inevitable), but how they treat existing mortgages.

I'd have thought individuals would be okayish (but interest rates will go up to the point where they moan and moan), but all those who converted to limited are likely to be raped by refusal to extend / carry-over mortgages other than on huge rates (actually 'normal' for business loans).

[As there's no presumption for businesses -- proper businesses really worry about having loans set up for the duration of the debt, or have access to proper credit lines (which actually means that the credit lines won't be used -- the loans are always extended as there's no benefit in calling them]

[spygirl]

42 minutes ago, dgul said:

The important bit isn't so much that they've changed tack (it was inevitable), but how they treat existing mortgages.

I'd have thought individuals would be okayish (but interest rates will go up to the point where they moan and moan), but all those who converted to limited are likely to be raped by refusal to extend / carry-over mortgages other than on huge rates (actually 'normal' for business loans).

[As there's no presumption for businesses -- proper businesses really worry about having loans set up for the duration of the debt, or have access to proper credit lines (which actually means that the credit lines won't be used -- the loans are always extended as there's no benefit in calling them]

I think anyone who get rid of their mortgage will be ok.

All the others face having to put more n more cash to reduce the LTV so they can move lender.

Or staying and being fucked over by the SVR.

 

[Frank Hovis]

On 20/06/2020 at 09:58, Wight Flight said:

I don't think the government want to think about people that pay their own rent. Why would they even exist, as we are always told it is cheaper to buy than rent, ergo those people should really buy and become a mortgage slave.

I know that this is the orthodox view here but surely this apparently sensible approach is rooted within the financial policies of the Bank of England up to 2008.

Since then the rules have changed and interest rates and inflation have been decoupled.

Add to that the vast amount of debt that the government has taken on since March and now wants to erode and you are into a situation where taking on a lot of debt in order to acquire a tangible asset looks like a sensible play.

That asset doesn't need to be a house but for anyone who doesn't own one it brings its own effective income stream of no longer requiring to pay rent.

There are many other factors, not least that you massively increase your risk by grossing up your assets and liabilities by buying a house and taking on a mortgage, but what would have been the sensible strategy to 2008 has not been the best since then.

The world is how it is rather than how it ought to be or how we would like it to be.

[sancho panza]

23 hours ago, spygirl said:

Tougher rules for buy-to-let landlords

https://www.thetimes.co.uk/article/tougher-rules-for-buy-to-let-landlords-ddx9kvcxq

Barclays is to stop giving mortgages to buy-to-let landlords who buy property through their own limited company.

From June 26 it will also no longer offer mortgages to private landlords looking to buy properties with more than one unit and to limited-liability partnerships (companies set up by at least two people) as well as limited companies that can be registered to only one person. The bank said that it sold very few of these mortgages.

Aaron Strutt at Trinity Financial Group, a mortgage broker, said: “Lenders are wondering how they can leave themselves less exposed to the economic fallout from the pandemic.”

Buying a property through a limited company has become increasingly popular with investors because you can claim relief on your mortgage interest, a

Continue reading

only about 4% of BTLs are in ltd co's run by LL's

Still ,it's a sign of what's coming.

[sancho panza]

22 hours ago, dgul said:

The important bit isn't so much that they've changed tack (it was inevitable), but how they treat existing mortgages.

I'd have thought individuals would be okayish (but interest rates will go up to the point where they moan and moan), but all those who converted to limited are likely to be raped by refusal to extend / carry-over mortgages other than on huge rates (actually 'normal' for business loans).

[As there's no presumption for businesses -- proper businesses really worry about having loans set up for the duration of the debt, or have access to proper credit lines (which actually means that the credit lines won't be used -- the loans are always extended as there's no benefit in calling them]

Excellent point.COnverting to ltd does releive tax bill but like you say,could bring a raft of otehr less pleasant repercussions eg lower LTV criteria/commercial IR's.

21 hours ago, spygirl said:

I think anyone who get rid of their mortgage will be ok.

All the others face having to put more n more cash to reduce the LTV so they can move lender.

Or staying and being fucked over by the SVR.

 

I feel for them,I really don't.