How does Buy to Let END!

[Wight Flight]

54 minutes ago, Option5 said:

How many Universities have borrowed vast sums to build student accommodation? 

Can they up the rent to cover their costs as they usually agree fees in advance?

Probably not.

Shame.

[Wight Flight]

40 minutes ago, Darude said:

Yes, good point. Many BTLers are renting out energy-inefficient properties to relatively low income households. I'm sure it will all work out fine for them.

They need an EPC of E or better so can't be too bad.I

Though the last place I rented had the staircase exiting the lounge. Has no effect on the EPC rating, but makes it bloody expensive as all your heat just escapes upstairs. Would never live somewhere with that design again.

 

[Guest]

3 minutes ago, Wight Flight said:

They need an EPC of E or better so can't be too bad.I

Though the last place I rented had the staircase exiting the lounge. Has no effect on the EPC rating, but makes it bloody expensive as all your heat just escapes upstairs. Would never live somewhere with that design again.

 

EPC of E or better or spend up to the cap (£3.5k inc VAT per property) and then register an exemption with the council, bob's your uncle and you are free to let it out. Could get up to £3.5k just putting in new double glazing.

[Wight Flight]

1 minute ago, Darude said:

EPC of E or better or spend up to the cap (£3.5k inc VAT per property) and then register an exemption with the council, bob's your uncle and you are free to let it out. Could get up to £3.5k just putting in new double glazing.

I thought it was £10k?

Which would be enough to rebuild the entire house in Stoke.

[Guest]

2 minutes ago, Wight Flight said:

I thought it was £10k?

Which would be enough to rebuild the entire house in Stoke.

£10k was the proposed cap for the proposed requirement to raise the minimum EPC for rentals to C or above but it's nowhere near becoming legislation, it's just been floated informally. E minimum or £3.5k cap is the law for now.

Edited July 27, 2022 by Guest

[Wight Flight]

Just now, Darude said:

£10k was the proposed cap for the proposed requirement to raise the minimum EPC for rentals to C or above but it's nowhere near becoming legislation, it's just been floated informally. £3.5k to get up to E is the law for now.

Thanks.

But for the first time ever I am looking at the EPC of possible rentals, and I guess others are too.

The rent will need to be low if you have an F.

[Guest]

2 minutes ago, Wight Flight said:

The rent will need to be low if you have an F.

Yes, similar to high council tax bands suppressing rents.

[Wight Flight]

1 minute ago, Darude said:

Yes, similar to high council tax bands suppressing rents.

I don't think that is quite so important. A higher band usually reflects a bigger property or better location, so is sort of priced in.

[Formerly]

On 27/07/2022 at 22:22, Wight Flight said:

I don't think that is quite so important. A higher band usually reflects a bigger property or better location, so is sort of priced in.

I had a great flat for a low rent as a student. It was band F so really high council tax and was a 2 bed/2 bath flat with a huge lounge and balcony overlooking the park with a secure entry car park. It was only £50 PCM more than the next flat I moved to which was a tiny 1 bed/1 bath in not so nice a location. The latter was council tax band A.

My point is council tax band can affect the rent.

 

.

Edited August 1, 2022 by Formerly
..does this forum delete the so from the beginning of sentences?

[spygirl]

https://www.thisismoney.co.uk/money/buytolet/article-11084499/Landlord-profits-turn-negative-base-rate-reached-2-5.html

Mortgage rate hikes halve profits of average UK buy-to-let landlord... and base rate rise to 2.5% could see them turn negative, according to Hamptons

Landlords have seen annual profits nearly halve in the past eight months alone

Rates among biggest lenders have risen from 1.25% to 3.12% since October 

On a £200,000 interest-only mortgage, that's a jump from £209 to £521 a month

Some landlords could sell up, piling on pressure for tenants seeking a home

The typical landlord has seen their annual profits halve since the start of the year due to higher mortgage rates, according to new research.

Interest rate hikes are eroding how much profit the average landlord is able to make, according to numbers crunched by estate agent Hamptons.

Following the base rate hike to 1.75 per cent last week, it also said that if the base rate was to reach 2.5 per cent, the average UK landlord could see their profits turn negative. 

 

The average IR over the last 40y is around 8%.

A 2% rise from 1.25% and they are squealing???

 

[spygirl]

https://www.telegraph.co.uk/property/buy-to-let/landlords-left-scrambling-loans-banks-cull-deals/

Landlords have been left scrambling for mortgages as lenders have pulled buy-to-let deals from the market as interest rates soar.

The number of available buy-to-let deals has plunged by a third since June as lenders withdrew 1,100 deals in two months, according to data from Moneyfacts, an analyst. In July alone, the number of available mortgages fell by 14pc.

Experts warned that banks are ditching their best buy-to-let deals as rising interest rates squeeze their margins.

Jeni Browne of Mortgages for Business, a buy-to-let broker, warned that lenders were scrapping their least profitable deals – those which are best for consumers – as interest rate rises increase their costs. “They are trying to preserve their margins, and that means trimming buy-to-let mortgages that are less profitable,” Ms Browne said.

The Bank of England announced its sixth consecutive decision to raise the Bank Rate on Thursday, to 1.75pc. It had already jumped from 0.1pc in December to 1.25pc.

If I was an io btl ll I'd not worry about riding rates. I'd be sorry if I could remortgage.

Banks are going to exit io btl, then screw the btl aprs.

6 minutes ago, spygirl said:

https://www.thisismoney.co.uk/money/buytolet/article-11084499/Landlord-profits-turn-negative-base-rate-reached-2-5.html

Mortgage rate hikes halve profits of average UK buy-to-let landlord... and base rate rise to 2.5% could see them turn negative, according to Hamptons

Landlords have seen annual profits nearly halve in the past eight months alone

Rates among biggest lenders have risen from 1.25% to 3.12% since October 

On a £200,000 interest-only mortgage, that's a jump from £209 to £521 a month

Some landlords could sell up, piling on pressure for tenants seeking a home

The typical landlord has seen their annual profits halve since the start of the year due to higher mortgage rates, according to new research.

Interest rate hikes are eroding how much profit the average landlord is able to make, according to numbers crunched by estate agent Hamptons.

Following the base rate hike to 1.75 per cent last week, it also said that if the base rate was to reach 2.5 per cent, the average UK landlord could see their profits turn negative. 

 

The average IR over the last 40y is around 8%.

A 2% rise from 1.25% and they are squealing???

 

Typical landlord 'would make loss' if mortgages hit 4%  

Hamptons' data shows that the average landlord could see their buy-to-let investment become loss-making if mortgage rates continue to rise.

The calculations are based on a typical landlord owning a property worth £222,000, generating £13,098 a year in rent,  with an interest-only mortgage covering 75 per cent of a property's value.

Hamptons has estimated that if the base rate reached 2.5 per cent, the average UK landlord would see their profits turn negative

[spygirl]

Which bit about buying a sub yield 4% didn't they grasp?

A business model that relies on IR staying at ~300 year lows....

Edited August 8, 2022 by spygirl

[Harley]

On 01/08/2022 at 11:04, Formerly said:

I had a great flat for a low rent as a student. It was band F so really high council tax and was a 2 bed/2 bath flat with a huge lounge and balcony overlooking the park with a secure entry car park. It was only £50 PCM more than the next flat I moved to which was a tiny 1 bed/1 bath in not so nice a location. The latter was council tax band A.

My point is council tax band can affect the rent.

 

.

Which, as a (full time?) student, uou didn't have to pay?  Any more increases (to pay golden pensions) and my partner and I are going back to college!

Edited August 9, 2022 by Harley

[eek]

9 hours ago, spygirl said:

Which bit about buying a sub yield 4% didn't they grasp?

A business model that relies on IR staying at ~300 year lows....

There was a reason why landlords used to insist on a 8-10% yield.

And as sanity returns to that part of the market it should filter down to the rest of the housing market over time as there won't be idiotic landlords seriously overpaying for properties.

I had a very interesting job spec through yesterday for a Yorkshire based building society - looking at Open Banking for payments..

Now I know open banking and thought I knew of all the sane use cases - mortgages ain't one of them .

[BurntBread]

35 minutes ago, Harley said:

Which, as a (full time?) student, you didn't have to pay?  Any more increases (to pay golden pensions) and my partner and I are going back to college!

Perhaps a business opportunity to set up the "Harley Academy of Resilience, Life Experience & Yield"?

Punters wanting to drop out of the rat-race and become entirely self-sufficient pay you £10 a year for a full-time online course. For the duration they no longer need to pay council tax. The course itself is entirely practical in nature, as you just leave them to get on with being self-sufficient.

Or, does the student thing not work like that?

Edited August 9, 2022 by BurntBread
.

[Formerly]

28 minutes ago, Harley said:

Which, as a (full time?) student, uou didn't have to pay?  Any more increases (to pay golden pensions) and my partner and I are going back to college!

Correct. Thinking about it, as a Scottish/EU resident, it's actually worth becoming a full-time student on a mickey mouse course and just do the bare minimum to stay enrolled. You could save more on council tax than the <£2k pa fees. Judging by the amount of work done by my flatmate at the time, you could hold down a nearly full-time job as well.

[eek]

5 minutes ago, BurntBread said:

Perhaps a business opportunity to set up the "Harley Academy of Resilience, Life Experience & Yield"?

Punters wanting to drop out of the rat-race and become entirely self-sufficient pay you £10 a year for a full-time online course. For the duration they no longer need to pay council tax. The course itself is entirely practical in nature, as you just leave them to get on with being self-sufficient.

Or, does the student thing not work like that?

Nope it needs to be full time (at least 21 hours a week) and run by an accredited establishment. 

[Formerly]

6 minutes ago, BurntBread said:

Perhaps a business opportunity to set up the "Harley Academy of Resilience, Life Experience & Yield"?

Punters wanting to drop out of the rat-race and become entirely self-sufficient pay you £10 a year for a full-time online course. For the duration they no longer need to pay council tax. The course itself is entirely practical in nature, as you just leave them to get on with being self-sufficient.

Or, does the student thing not work like that?

Let me know if anyone manages to set this up. It would be even easier than my suggestion above.

[Formerly]

1 minute ago, eek said:

Nope it needs to be full time (at least 21 hours a week) and run by an accredited establishment. 

There's no way my flatmate was doing 21 hours a week. 2 hours a month of attendance at lectures and tutorials would be closer. Of course they were meant to study at home and probably attend about 6 hours of lectures a week but they seemed to progress fine without doing so.

[Bus Stop Boxer]

3 hours ago, Formerly said:

There's no way my flatmate was doing 21 hours a week. 2 hours a month of attendance at lectures and tutorials would be closer. Of course they were meant to study at home and probably attend about 6 hours of lectures a week but they seemed to progress fine without doing so.

I would imagine the coof regs and bed wetting lecturers has made it an even greyer area.

I dont need to do this now, but its been noted. Cheers.

[Formerly]

12 minutes ago, Bus Stop Boxer said:

I would imagine the coof regs and bed wetting lecturers has made it an even greyer area.

I dont need to do this now, but its been noted. Cheers.

I'm starting to wonder if it's viable to do 2 further degrees from age 55 in Scotland.

Two student loans of ~£6k per year = £48k (4 year degrees). 8 years free council tax - say £12 to 16k. Access to all the student offers and facilities (cheap gym etc).

Of course you build up a debt, but only have to pay 9% of income above £25k per year.

[Formerly]

Just now, Formerly said:

I'm starting to wonder if it's viable to do 2 further degrees from age 55 in Scotland.

Two student loans of ~£6k per year = £48k (4 year degrees). 8 years free council tax - say £12 to 16k. Access to all the student offers and facilities (cheap gym etc).

Of course you build up a debt, but only have to pay 9% of income above £25k per year.

Of course, if you have a partner you could both do this. Looks like a way to get £100k while learning something of interest.

[Guest]

Today's forecast that average annual gas+electric bills will be £4.2k from early next year is surely very bad news for BTL. That's £3k less money tenants have in hand to pay rent with each year than they had in early 2022. My guess is rents will fall by hundreds of £ a month in 2023, and this at a time of rising interest rates too.

Any BTLers who are holding properties that currently barely/don't quite wash their face once the mortgage is paid are going to find themselves with rental incomes falling thousands of pounds a year short of the mortgage. Then house prices start falling, and the LTV creeps up, and so the interest rate does too...

Edited August 9, 2022 by Guest

[janch]

Shaun Richards on scarce rental property especially in London.  Have some of the LLs sold up already?

https://notayesmanseconomics.wordpress.com/

[No One]

15 hours ago, spygirl said:

https://www.telegraph.co.uk/property/buy-to-let/landlords-left-scrambling-loans-banks-cull-deals/

Landlords have been left scrambling for mortgages as lenders have pulled buy-to-let deals from the market as interest rates soar.

The number of available buy-to-let deals has plunged by a third since June as lenders withdrew 1,100 deals in two months, according to data from Moneyfacts, an analyst. In July alone, the number of available mortgages fell by 14pc.

Experts warned that banks are ditching their best buy-to-let deals as rising interest rates squeeze their margins.

Jeni Browne of Mortgages for Business, a buy-to-let broker, warned that lenders were scrapping their least profitable deals – those which are best for consumers – as interest rate rises increase their costs. “They are trying to preserve their margins, and that means trimming buy-to-let mortgages that are less profitable,” Ms Browne said.

The Bank of England announced its sixth consecutive decision to raise the Bank Rate on Thursday, to 1.75pc. It had already jumped from 0.1pc in December to 1.25pc.

If I was an io btl ll I'd not worry about riding rates. I'd be sorry if I could remortgage.

Banks are going to exit io btl, then screw the btl aprs.

Typical landlord 'would make loss' if mortgages hit 4%  

Hamptons' data shows that the average landlord could see their buy-to-let investment become loss-making if mortgage rates continue to rise.

The calculations are based on a typical landlord owning a property worth £222,000, generating £13,098 a year in rent,  with an interest-only mortgage covering 75 per cent of a property's value.

Hamptons has estimated that if the base rate reached 2.5 per cent, the average UK landlord would see their profits turn negative

From FT, seems LL are either selling or banging up the rents innit

Private tenants in London are facing “increasingly unaffordable” rents, the homeless charity Shelter has warned, as high demand and a shortage of properties in the capital have led to intense competition to secure accommodation. The shortage has led to landlords demanding that prospective tenants compete in a bidding process for properties, while others were being asked for up to 12 months’ rent in advance, according to Ruth Ehrlich, Shelter’s policy manager. “We are hearing from people every day who are battling increasingly unaffordable private rents, who are struggling to find somewhere to live,” Ehrlich told the Financial Times’s Money Clinic podcast. “And when they do, they’re being forced to jump through really extreme barriers just to access that home.” Research from property site Zoopla found that rents increased by nearly 20 per cent in inner London in the first quarter of 2022, and by 10 per cent in outer London. That compares with growth of about 2 per cent in the first quarter of 2019. But agents said that in many cases much higher rent increases were being pushed through. “We’re seeing reports of 40 per cent rent increases year on year, and on top of the cost of living crisis, it’s pushing a lot of families into financial hardship,” said Greg Tsuman, director of lettings at Martyn Gerrard estate agents in north London and president-elect of trade body Propertymark. He added that he had “never seen anything like it for the 20 years that I’ve been in the business”. Supply of private rented accommodation has fallen sharply in London to a five-year-low after buy-to-let investors sold up or reduced their exposure during the coronavirus pandemic. On average, letting agencies had 11.8 homes to rent in the capital in the year to date, compared with 21.8 in the five years to 2021, a fall of 48 per cent, according to Zoopla. Richard Donnell, research director at Zoopla, said: “A lot of the focus has been on the sales market, but there’s actually an even greater supply squeeze in the lettings market and it’s worst in London.” Will, a 28-year-old renter based in east London, who did not want his full name used, said that trying to find a new place to live after being forced out of his previous flat earlier this year when the rent was put up had been “really hard work”. One letting agent asked how much he was willing to offer on a property for rent, warning him that others were offering £300 over the asking price. He said he went to seven viewings last week, adding that about half the properties he saw listed online had been snapped up by the time he responded. “I called for a property I saw listed the same day, and the estate agent said ‘I’ve already given out 30 spots for viewing.’” Some prospective tenants said they were being charged simply to view properties. Daniel, 25, who also did not want his surname used, said he was asked to pay a £600 deposit to view a three-bed home in the London Fields area, equivalent to one week’s rent. Tsuman said a lack of housebuilding and landlords selling up — initially because of the introduction of a stamp duty surcharge in 2016 and then to take advantage of soaring house prices during the pandemic — meant demand was far outstripping supply. “In May 2020, we had approximately five people competing for each property . . . May this year, that figure jumped to 35 people,” he said.