How does Buy to Let END!

[Wight Flight]

This is the kind of arsehole that is fucking up housing for those that need it.

https://www.property118.com/buy-to-leave/#comments

[spygirl]

https://www.property118.com/portfolio-landlord-exploitation/

I have come to the end of my 5 years fixed mortgage product. At the time of taking the Mortgage, there was no such definition of Portfolio or Non-Portfolio Landlord (the one who owns more than 4 properties). I simply decided to switch product with the same lender and I own exactly the same number of properties as I did 5 years ago.

When questioned by the lender, if I currently owned more than 4 properties, to which I answered “Yes”. The product which I fancied from their list was no longer available as they stated that, as a Portfolio Landlord, this product was not available, and they offered a product which was 1% higher than my choice.

My concern is that I did not ask for more borrowing there was no credit search as it was a simple product switch. How lenders can justify an extra 1% and why as a portfolio landlord I am penalised for something which was not applicable at the time of taking a mortgage with them?

As I already have a Mortgage with them, this is not as if there is an extra risk to the lender. In my view lenders are exploiting BTL borrowers because of Prudential Regulation new rules and as a result, my costs have gone up significantly not to mention S24 has already eaten up 20% of our profits.

Any views appreciated.

Simon

The spread on large IO BTL porfolios is going to be a lo more than 1% in the future.

I like his not joining the dots between S24 taking up 20% of his profits - theyll be a lot bigger than that with 5 properties FFS- and no extra risk.

Reply to the comment left by Simon Hall at 07/06/2021 - 15:00This new rate for a new mortgage is not, as you state, because you OWN more than four properties. It is because you are indebted to the owners of the properties, who are your lenders.You only own the proportion of the properties you paid as initial deposit plus any capital appreciation which has accrued since purchase (unless you have repayment mortgages). If you owned the properties you would not have a mortgage. The reason the lenders have to charge landlords who have more than four mortgaged properties a higher rate than those who have fewer is because the government imposed the new Prudential Regulation rules on the lenders following the credit crash of 2008. Lenders are obliged to comply or lose their licence to lend. It has nothing to do with whether they have to undertake more work or whether they are profiteering. In fact you are fortunate that you have had the remainder of a five-year term to benefit from the old rules.

 

 

Reply to the comment left by Simon Hall at 07/06/2021 - 15:00
I beg to differ, although you may percieved 'portfolio landlords' are being exploited, portfolio landlords may also rightly be assessed as being higher risk.

We are just emerging (hopefully) from the biggest economic shock since 2008, and possibly since WW2. There has been an eviction ban for over one year, and there has been many tennants and landlords alike who havn't been able to pay their rent or mortgage costs.

Not only will these debts continue to roll on for years, or be written off, but the economy as a whole is still recovering. There is also significant risk of further variants of covid causing more disruption, and maybe further lockdowns. On top of that the regulator enviroment has also changed in the last 5 years.

It's very possible that the risk profile of portfolio landlords has increased and the underwriting will be based on a sector view, not only your own individual past performance.

On top of that, its pretty typical in most financial businesses to not provide as competative offers to existing customers as they do to new customers. Thats just business.

 

 

 

Reply to the comment left by TrevL at 07/06/2021 - 17:18I disagree a portfolio Landlord should be a lower risk as he's got more properties to spread any shortfalls over.
E.G. a LL with 2 properties and 1 fails to pay rent = 50% reduction in rental income. whereas a LL with 10 properties and 1 fails to pay = 10% reduction

Moron

[Andersen]

A list of the 168 < not a typo! bits of legislation LL's have to comply with, in a downloadable PDF https://www.nrla.org.uk/campaigns/managing-tenancies/legislation-affecting-private-landlords-England.

UK.Gov is running a project to look at a "National registration for LL's" but it's not confirmed yet so isn't on the list above - credit to @eek https://www.dosbods.co.uk/topic/17833-anyone-got-a-none-banned-property-118-account/?tab=comments#comment-1187050 

How does BTL end? Under a mountain of bureaucracy !

It's good news if you're looking to buy an ex-rental that's being sold off cheap but crap news if you're looking to rent somewhere and the supply is rapidy disappearing. 

 

[spygirl]

12 hours ago, Andersen said:

A list of the 168 < not a typo! bits of legislation LL's have to comply with, in a downloadable PDF https://www.nrla.org.uk/campaigns/managing-tenancies/legislation-affecting-private-landlords-England.

UK.Gov is running a project to look at a "National registration for LL's" but it's not confirmed yet so isn't on the list above - credit to @eek https://www.dosbods.co.uk/topic/17833-anyone-got-a-none-banned-property-118-account/?tab=comments#comment-1187050 

How does BTL end? Under a mountain of bureaucracy !

It's good news if you're looking to buy an ex-rental that's being sold off cheap but crap news if you're looking to rent somewhere and the supply is rapidy disappearing. 

 

Oh, theyve had the LL long intheir sights.

And 90%+ of LL have not registered with HMRC yet FFS.

Brutal tax review is coming.

And I expect BoE to start getting serious about forcing IO mortgages off banks books, forcing them to hold 100% of capital against IO loans.

Ive been waiting for a change since basel3.

And the number of non performing LL mortgages must be going off the scales.

he reason why only a a handful of BS do holiday let mortgage is that all he big banks went OTT for holiday let mortgages

Then, in he 90s, they all turned bad, costing the ban and the holiday letter £££££££

So, banks ,as theyve got lending data on holiday lets i.e. they go very bad, wont touch them.

Same thing is coming for IO BTL.

Low rates bailed out the loons. However theres still the issue to do when the  IO BTL reaches the end of its term.

And theres now a tidal wave of non paying tenants.

The LLs who did the best - London/SE. also borrowed the must and experiencing the highest voids and non payments.

LL who jumped into cheap NE places have been rinsed - about 30kper rental. Plus whatever rental void.

 

 

[MrXxxx]

On 05/07/2021 at 09:33, spygirl said:

https://www.property118.com/portfolio-landlord-exploitation/

I have come to the end of my 5 years fixed mortgage product. At the time of taking the Mortgage, there was no such definition of Portfolio or Non-Portfolio Landlord (the one who owns more than 4 properties). I simply decided to switch product with the same lender and I own exactly the same number of properties as I did 5 years ago.

When questioned by the lender, if I currently owned more than 4 properties, to which I answered “Yes”. The product which I fancied from their list was no longer available as they stated that, as a Portfolio Landlord, this product was not available, and they offered a product which was 1% higher than my choice.

My concern is that I did not ask for more borrowing there was no credit search as it was a simple product switch. How lenders can justify an extra 1% and why as a portfolio landlord I am penalised for something which was not applicable at the time of taking a mortgage with them?

As I already have a Mortgage with them, this is not as if there is an extra risk to the lender. In my view lenders are exploiting BTL borrowers because of Prudential Regulation new rules and as a result, my costs have gone up significantly not to mention S24 has already eaten up 20% of our profits.

Any views appreciated.

Simon

The spread on large IO BTL porfolios is going to be a lo more than 1% in the future.

I like his not joining the dots between S24 taking up 20% of his profits - theyll be a lot bigger than that with 5 properties FFS- and no extra risk.

Reply to the comment left by Simon Hall at 07/06/2021 - 15:00This new rate for a new mortgage is not, as you state, because you OWN more than four properties. It is because you are indebted to the owners of the properties, who are your lenders.You only own the proportion of the properties you paid as initial deposit plus any capital appreciation which has accrued since purchase (unless you have repayment mortgages). If you owned the properties you would not have a mortgage. The reason the lenders have to charge landlords who have more than four mortgaged properties a higher rate than those who have fewer is because the government imposed the new Prudential Regulation rules on the lenders following the credit crash of 2008. Lenders are obliged to comply or lose their licence to lend. It has nothing to do with whether they have to undertake more work or whether they are profiteering. In fact you are fortunate that you have had the remainder of a five-year term to benefit from the old rules.

 

 

Reply to the comment left by Simon Hall at 07/06/2021 - 15:00
I beg to differ, although you may percieved 'portfolio landlords' are being exploited, portfolio landlords may also rightly be assessed as being higher risk.

We are just emerging (hopefully) from the biggest economic shock since 2008, and possibly since WW2. There has been an eviction ban for over one year, and there has been many tennants and landlords alike who havn't been able to pay their rent or mortgage costs.

Not only will these debts continue to roll on for years, or be written off, but the economy as a whole is still recovering. There is also significant risk of further variants of covid causing more disruption, and maybe further lockdowns. On top of that the regulator enviroment has also changed in the last 5 years.

It's very possible that the risk profile of portfolio landlords has increased and the underwriting will be based on a sector view, not only your own individual past performance.

On top of that, its pretty typical in most financial businesses to not provide as competative offers to existing customers as they do to new customers. Thats just business.

 

 

 

Reply to the comment left by TrevL at 07/06/2021 - 17:18I disagree a portfolio Landlord should be a lower risk as he's got more properties to spread any shortfalls over.
E.G. a LL with 2 properties and 1 fails to pay rent = 50% reduction in rental income. whereas a LL with 10 properties and 1 fails to pay = 10% reduction

Moron

Based on Simon's logic he should be quite happy for someone to pay the same rent however long they have lived in `his` property, as the risk hasn't changed from day 1.

[spygirl]

Genius!

https://www.property118.com/why-mortgage-interest-rates-will-not-rise-uk-buy-to-let-mortgages/

[eek]

10 minutes ago, spygirl said:

Genius!

https://www.property118.com/why-mortgage-interest-rates-will-not-rise-uk-buy-to-let-mortgages/

It's nice to see Rob Thomas pull up the video for being completely baseless. 

[leonardratso]

32 minutes ago, eek said:

It's nice to see Rob Thomas pull up the video for being completely baseless. 

guy sounds like a complete prick as well. (video BTL'r that is).

Edited July 11, 2021 by leonardratso

[spygirl]

Thousands of landlords hiding profits from the taxman

HMRC says there is a £500m black hole in unpaid tax by property investors

https://www.telegraph.co.uk/property/buy-to-let/thousands-landlords-hiding-profits-taxman/

 

   A growing number of landlords are being caught out by an HM Revenue & Customs campaign
   targeting property investors who are underpaying tax.

   In 2019, HMRC found 11,129 landlords had underpaid or not paid income tax, compared with
   8,704 in 2018, according to a Freedom of Information request submitted by Telegraph Money.

   The department reclaimed £44.7m in tax from landlords last year, up 36pc from the £32.8m
   collected in 2018.

   It also raked in more from fining property professionals a total of £7.6m, another rise of
   36pc compared with the 2018 figure.
 

   The crackdown is part of HMRC’s “Let Property” campaign. Launched in September 2013, it
   targets landlords underpaying tax on rental income.
   Buy-to-let | The inside guide

   At the time, HMRC estimated that up to 1.5 million landlords were underpaying tax, worth as
   much as £500m a year. The campaign was due to run for 18 months but it has been extended
   indefinitely.

   Some landlords caught by HMRC will be avoiding tax deliberately, but many will have made
   honest mistakes.

   David Smith of the Residential Landlords Association, a trade body, said: “Every landlord
   should pay all their tax that is due, but we do understand why some may be making mistakes
   with their returns, given a number of recent changes and an increasingly complex tax system
   affecting rented housing.”

   If HMRC catches landlords who have not paid the right amount, it can reclaim up to 20
   years’ worth of payments. It can also fine the landlord up to 100pc of the value of the
   unpaid tax and bring criminal charges.
 

   If a landlord has made an honest mistake and admits it, the tax office will only reclaim
   tax going back six years and will charge smaller fines, if at all.

   An HMRC spokesman said: "HMRC believes that its customers want to pay the right amount of
   tax and wants to help those that are not paying the correct amount to put that right.

   “The Let Property Campaign is an opportunity for landlords who owe tax through letting out
   residential property, in the UK or abroad, to get up to date with their tax affairs in a
   simple, straightforward way and take advantage of the best possible terms.”

HMRC know exactly who the LL and how much they owe.

Thats 500m/y going spare.

 

[spygirl]

Assuming this is genuine- or at least some case study, based on real info -

 

https://www.theguardian.com/money/2021/jul/19/can-we-get-a-buy-to-let-mortgage-and-use-the-house-as-a-holiday-let

Q We are two women who are nearing our mid-60s and won’t get our state pensions until we are 66. I work in schools and earn very little while my partner is a graphic designer who now has very little work.

On the plus side, over the years we have invested in some buy-to-let properties and are lucky enough to enjoy great relationships with our tenants. We also have a furnished holiday let and are planning to buy another. We have had an offer accepted on the property in question but because it went to sealed bids, we ended up offering rather more than we should have. So we’re now trying to find a mortgage with a low interest rate before I stop work next year and am unable to get a mortgage of any sort.

We have been offered one by our mortgage broker but the rate is quite high. The rates for buy-to-let mortgages are much lower but the tax incentives for furnished holiday lets are better. If we took out a buy-to-let mortgage could we then rent the house out as a holiday let?

These fuckwit should not be let anywhere other peoples live FFS.

Im not sure who they got their current mortgages, never mind one now.

 

 

 

[Heart's Ease]

Some charts in the short thread and commentary.

[spygirl]

Another post, another moron.

https://www.property118.com/council-enforcement-yelling-what-an-earth-i-was-playing-at/#comments

What in fuck do these idiots think will happen with HMOs.

LL have no wiggle room.

Cretins broke planning regs, fire regs and HMO regs.

 

[Bilbo]

On 09/08/2021 at 21:03, spygirl said:

Another post, another moron.

https://www.property118.com/council-enforcement-yelling-what-an-earth-i-was-playing-at/#comments

What in fuck do these idiots think will happen with HMOs.

LL have no wiggle room.

Cretins broke planning regs, fire regs and HMO regs.

 

Spotted this one in today's local. 50k fine earlier this year and another 17k.

Slum landlord into HMO bet this has been a bad year for the pension pot.

https://www.eadt.co.uk/news/housing/ipswich-landlord-ralph-bernard-fined-17k-8228468

 

[Chewing Grass]

How does the maths work out on this, £55,000 complete with a tenant paying £300/month, unless you are laundering money, it doesn't.

https://www.rightmove.co.uk/properties/89756878

[sancho panza]

maybe this is how it ends

worth noting these are averages per hosuehold...........means some are in much deeper.

I think the headline means to read that of those who are behind on rent trhe average is...

https://www.cnbc.com/2021/08/06/us-renters-are-behind-on-3700-in-rent-on-average-and-often-more-.html?recirc=taboolainternal

Renters are behind $3,700 in rent, on average. This map shows a state breakout

Published Fri, Aug 6 202112:05 PM EDTUpdated Fri, Aug 6 20211:37 PM EDT

 

Annie Nova@AnnieReporter

Share

Key Points

• How much renters were set back by the pandemic varies sharply between states and counties.
• The typical debt in Alabama is $2,700. In Washington state, it’s closer to $4,500.
• In some areas, renters face a much larger debt.

More than 11 million Americans continue to report being behind on their rent.

How much renters owe varies greatly from one state and county to the next, according to data provided to CNBC by Surgo Ventures, a nonprofit organization focusing on health and data.

 

Across the country, the average renter household in arrears owes $3,700. The typical debt in Alabama is $2,700. In California, meanwhile, it’s closer to $5,300.In some areas, renters face an even larger debt. In San Mateo County, California, the typical renter who’s behind is $8,700 in the hole. Struggling renters in Bergen County, New Jersey, owe an average of $6,400. A study earlier this year by New York University found that thousands of renters in New York City have debts over $10,000.

The differences in need across the country is important to consider, said Aaron Dibner-Dunlap, senior research scientist at Surgo Ventures.

“If you live in a county with a high cost of living, such as many in California and New York, officials need to ensure there are enough public funds to cover the estimated debt,” he said.

 

The share of U.S. renters who are behind — around 16% — hasn’t changed much since March.

That’s in large part because of how slow states and cities have been in distributing the $46 billion in federal rental assistance allocated by Congress. By the end of June, just $3 billion had reached people.

Renters just got a little more time to try to access the government aid and before they have to fear an eviction.

This week the Centers for Disease Control and Prevention issued a new eviction moratorium, after the previous one expired on July 31. The protection applies until Oct. 3 and to places where Covid rates remain high. That currently covers around 80% of counties.

[Wight Flight]

9 hours ago, Chewing Grass said:

How does the maths work out on this, £55,000 complete with a tenant paying £300/month, unless you are laundering money, it doesn't.

https://www.rightmove.co.uk/properties/89756878

On that basis my rent should be over £3k per month.

That one seems like a bargain.

[spygirl]

10 hours ago, Chewing Grass said:

How does the maths work out on this, £55,000 complete with a tenant paying £300/month, unless you are laundering money, it doesn't.

https://www.rightmove.co.uk/properties/89756878

Ah ....

https://houseprices.io/?q=chestnut+street%2C+ashington

Observe the idiots piling 9in mid 000s paying 60k+

Then leaving ~15 years later down 30k.

 

[Andersen]

 An interesting way of viewing the tax situation of highter-rate taxpayer LL's, extracts from the article :

New LL tax software calculates higher rate @ 60% ....

When you cross the top tax Threshold, you lose your personal allowance. 
The software calculates this at 60% when it works through the figures on your accounts. 
I have to say I was quite taken back when its presented at 60% tax rate.

The tenant may have paid 20% tax on their income passed to LL's, and assuming LL's spend the profits, 20% VAT is paid.  Add the 60% LL tax and the government has pretty much got the lot from that income band!

https://www.propertytribes.com/new-tax-software-calculates-higher-rate-at-60-t-127653321.html 

A couple of posts explain it, I think I understand but DYOR 

[Option5]

I vaguely remember this block of flats in Manchester getting mentioned when it came on thearket in 2019 for £1,505,000.

It's still available at £780,000....

https://www.zoopla.co.uk/for-sale/details/52334065/

 

[BWW]

3 hours ago, Option5 said:

I vaguely remember this block of flats in Manchester getting mentioned when it came on thearket in 2019 for £1,505,000.

It's still available at £780,000....

https://www.zoopla.co.uk/for-sale/details/52334065/

 

That's an ad for a "4-unit nationwide portfolio", not the [building in the pic] block of flats.

How many units was it in 2019? From the pricing did they just sell a few off seperately?

[Option5]

10 minutes ago, BWW said:

That's an ad for a "4-unit nationwide portfolio", not the [building in the pic] block of flats.

How many units was it in 2019? From the pricing did they just sell a few off seperately?

Well, according to the listing history it's the same advert, but you could be right.

[One percent]

This way, through pisspoor tenants. 
https://www.dailymail.co.uk/femail/article-9897485/Tenant-hell-turns-flat-sea-8-000-cans-4ft-high-toilet-paper-tower.html

Tenant from hell who 'didn't pay rent for a year' trashes two-bedroom flat and leaves behind 8,000 empty beer cans, rotten food and a toilet overflowing with excrement

[UmBongo]

2 hours ago, One percent said:

This way, through pisspoor tenants. 
https://www.dailymail.co.uk/femail/article-9897485/Tenant-hell-turns-flat-sea-8-000-cans-4ft-high-toilet-paper-tower.html

Tenant from hell who 'didn't pay rent for a year' trashes two-bedroom flat and leaves behind 8,000 empty beer cans, rotten food and a toilet overflowing with excrement

The toilet!

[Hancock]

4 hours ago, One percent said:

This way, through pisspoor tenants. 
https://www.dailymail.co.uk/femail/article-9897485/Tenant-hell-turns-flat-sea-8-000-cans-4ft-high-toilet-paper-tower.html

Tenant from hell who 'didn't pay rent for a year' trashes two-bedroom flat and leaves behind 8,000 empty beer cans, rotten food and a toilet overflowing with excrement

I "almost" felt sorry for the landlord such is the state of it, how is it even possible to be that dirty.

Surely there  must have been signs when it was initially let.

[spygirl]

https://www.telegraph.co.uk/property/buy-to-let/landlord-20-years-everything-learnt/amp/

 

The Secret Landlord is a new monthly column by an anonymous buy-to-let investor, pulling back the curtain on the highs and lows of renting property and answering readers' questions

Owning property is a peculiarly English obsession. When people find out I own property that I rent out, the first question they ask is: how many? It’s a question I tend to avoid, because nobody really likes to talk about how much they earn, another quirk of the English.

For the purposes of setting out my stall, let’s say it’s enough. More than enough. I am what you would call a "portfolio" landlord. I have properties up and down the country of all shapes and sizes. This is my full-time job and has been for almost twenty years.

It’s a job which, like most others, has its ups and downs. If I’m being honest, the last couple of years has been more down than up, on account of increasing regulations and rules. Plus, after this amount of time in the same job, it’s fair to say my enthusiasm has started to wane a little.

Advertisement

This spring, given the hot property market, I decided the time had come to sell one third of my portfolio. It didn’t go as planned.

It started off well: the properties received plenty of attention and got buyers into a frenzy, but getting an offer is different to getting to completion. I was messed about by buyers (saying they were going to buy it and then pulling out a few weeks later), and messed about by tenants, with agents struggling to gain access – even when the next buyer will most likely be another investor.

The whole debacle gave me time to reflect and rethink: why am I landlord? 

I accidentally fell into renting property when a sale fell through. Instead of selling, I rented it, and actually enjoyed the process. So much so I bought many more, often at auction and usually needing refurbishment. I love bringing properties back to life. I love providing homes for people.

The problem I have found, over the years, is people’s perception of what I do. And while other people’s opinions shouldn’t really matter, it’s difficult when you want to feel proud of what you do. Being a landlord is like being a stain on a magnificent oak table. From every angle you are seen as being a problem, a parasite.

Advertisement

I’ve had time to think about the business I have built and how I want to shape my future. I have been hit by recent challenges for buy-to-let, such as tax changes that have squeezed profits, the eviction ban and the arrears that have built up in the last 18 months. 

And I'm well-versed on the upcoming changes planned by Government, such as the likely removal of Section 21, and how landlords readjust to the new landscape; the proposed EPC changes and the huge capital investment this will require (especially for lower end); and likely further changes to taxes and Making Tax Digital, which could mean having to report income every quarter.

While many are negative about the future of the sector, I’ve rubbed my crystal ball and polished my halo of optimism and realised buy-to-let is a brilliant business to be in, and there are massive opportunities for those who want to remain in this business long term. 

The fact remains: people need somewhere to live. Demand is very strong, and rental prices post-Covid are increasing to much higher than anticipated levels.

Advertisement

But I want to future-proof my business. You and I may not know about how to best retrofit properties and boost energy efficiency – but we can learn together. In this column, I'll be sharing tips on issues I have encountered, such as the ways I’ve managed to get money out of non-paying tenants. I’m happy to tell you all about buying at auction, about how to work out if a property is a good deal, how to find reliable tradespeople, or if you’ve even got the makings of a landlord.

This job isn’t for the faint-hearted. Being a landlord does mean you get to collect monies on assets you own, but there’s a lot more to this than just cashing a rent cheque.

Many of my tenants have stayed with me for years, some almost as long as I’ve been a landlord. I like to think that says something about the service levels I provide. And this is a service business – don’t forget that.

I know there are rogue landlords out there, but I’m not one of them. I’m not perfect, and sometimes I get it wrong. I want the opportunity to be honest and share the good, the bad and, hopefully, the useful.

 

Anyone who falls into LL as they were not able to sell their house should not be a LL ffs.

In terms of a portfolio LL, who's houses up n down the country and lives off the income...

Hes going to be leveraged to the moon and have a huge tax bill. The limited interest relief io btlget requires it to be offset against non property income.

Its mental he raises s21 and not s24, which, assuming this is real, means hes fucking clueless.

S21 wint be removed. It'll exist in one form or another.