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How does Buy to Let END!


macca

What happens when generation rent retire with tiny pensions and massive rent bills!  

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sleepwello'nights
3 hours ago, Wight Flight said:

Disagree. A house is either to rent for as long as the tenant wants to be there or you are not a professional landlord. The chances of someone actually WANTING to rent for 10 months are remote.

Yes the chances of someone wanting to rent for 10 months is remote. However I know of two families both of whom only want to rent for 6 months. They accept that the exact timing of their plans might involve renting for a few months more.

In fact my son rented for 8 months a year or two ago whilst the bungalow he bought was being enlarged into a two storey house and updated. 

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Wight Flight
1 hour ago, sleepwello'nights said:

Yes the chances of someone wanting to rent for 10 months is remote. However I know of two families both of whom only want to rent for 6 months. They accept that the exact timing of their plans might involve renting for a few months more.

In fact my son rented for 8 months a year or two ago whilst the bungalow he bought was being enlarged into a two storey house and updated. 

That's fine. They take a standard six month contract and don't renew.

It is their choice. 

This kind of rental isn't one that anyone would choose. Unless they were absolutely desperate because in 10 months time they will be homeless.

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BTL has ended.

Im surprised that theres any LL still doing.

People cannot take out high LTV IO mortgages for BTL any more.

Anyone who's got an IO BTL will be finding that the S24 changes mean they are paying some or most ofth their rental income in tax.

If the BTLer only has a single BTL and average (25k) income then they'll get some breathing room ... However ...

IO BTL came about by idiot EAs lobbying the banks n BS's to lend on rentals. The contract they were waving under their nose was the AST law, created in 1988,. which allows a bank to repo a rental property relatively quickly. Of course that means Ftachers to blame for BTL .....  Shes not. The BTL sector did not exist in any form til about ~2000/2001 when the high LTV IO BTL kicked off and then went massive 2004-2008.

The main reasons BTL went massive are:

1) Banks started lending money to IO BTL.

2) Banks had run out of OO to lend to in 2002 - prices being too high, saw OO mortgages dropping off.

3) Gormless oversight, allowing LL to offset mortgage IR against rental income.

4) AST gave banks a framework of beign able to get the house back on default, like an OO mortgage.

Again, S24 has finished IO BTL.

Now, as a result of IO BTL, the rental sector is political - no one likes a LL. Absolutely noone likes a LL who gets given cheaper money.

Basel3 and its evolving ought to have killed all IO Lending dead - no regulated bank should be doing IO Lending, purely special product, domain of financial companies i.e. not banks.

There will be a point where either Cons or Lab or whoever introduces new laws, rolling back the AST change i..e a tenant cannot be evicted for a few years.

ON that change happening, the banks will have to mark down their entire BTL book as impaired i.e. theres a risk they cannot get back their money/asset.

Remember, as its IO lending, the loan is non amortising i..e nto paid padi. In 10 years time, the bank will still be on the hook all the money lent. Compare to repayment mortgage where, after 10 years and a 20% deposit, the lending is pretty low risk to the bank, having a good 50% equity to protect against falls.

On this change, IO BTL loan will have to be sold off to specialist financial companies, who will charge the loans for what they are - non amortising commercial bridging loans - 3 to % a month compounding.

You'll see this in place when the banks BTL SVR starts cranking up massively going above 8%.

Any bank with  large IO BTL book is probably bust. Thats Cov B and Nationwide.

Any IO BTL LL with 2+ property is probably bust.

 

 

 

 

 

 

 

 

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Is BTL only interest only maxed out leveraged loons buying shitpads in Boro? What about cash purchases or capital repayment? Middle classes buying property to rent out as their pensions? A whole swathe of property programs pumped out daily by the MSM says otherwise imo.

Plenty of interest only mortgages for BTL with some big names

https://www.moneysupermarket.com/mortgages/results/#?goal=4&types=1&types=2&types=3&types=4&types=5&borrow=120000&method=1&page=1

 

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Wight Flight
25 minutes ago, A_P said:

Is BTL only interest only maxed out leveraged loons buying shitpads in Boro? What about cash purchases or capital repayment? Middle classes buying property to rent out as their pensions? A whole swathe of property programs pumped out daily by the MSM says otherwise imo.

Plenty of interest only mortgages for BTL with some big names

https://www.moneysupermarket.com/mortgages/results/#?goal=4&types=1&types=2&types=3&types=4&types=5&borrow=120000&method=1&page=1

 

No. I think there are also a lot of 'inherit to rent' and even more 'don't sell when we upsize' landlords out there.

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19 minutes ago, A_P said:

Is BTL only interest only maxed out leveraged loons buying shitpads in Boro? What about cash purchases or capital repayment? Middle classes buying property to rent out as their pensions? A whole swathe of property programs pumped out daily by the MSM says otherwise imo.

Plenty of interest only mortgages for BTL with some big names

https://www.moneysupermarket.com/mortgages/results/#?goal=4&types=1&types=2&types=3&types=4&types=5&borrow=120000&method=1&page=1

 

The number of people buying houses for cash, no debt, is tiny.

Rentals fully onwed are not the problem. Idiots IOBTL is.

The disaster that is BTL has always been high leverage IO BTL. All 2001 onwards.

IO BTL was always people without a pot ,leveraging up like loons.

Regulated banks should not be touching non amortising debt with a bagre poll. And the BoE should be banning them - which, to be honest, it has.

Buying a house, with cash, to rent out, is nuts. The yeild is just not there.

The only way BTL i,.e. IO BTL works is with sod all  down and a lot of leverage and no capital repayment.

At the mo, the UK has reached a point where theres basically no new IO BTL. Theres a bit of shuffling, as people remortgage - this takes the form of the LL being forced  to massively increase the equity. Ive heard of cases of where a 90% LTV could only remortgage with a 40% equity pay in, which the idiots did, drawing money from their OO.

Dont be fooled by the 'Oh you can still get an IO BTL mortgage' Try and find out how many IO BTL they are selling - barely any.

Look at the LTV - 75%. Realistically they'll want 60%. Look at the SVR - 5-6%. Most IO BTKL are stuck on the SVR of ~6% as they cannot put money in.

Do the maths:

200k IO BTL rented at 800m = ~10k/rent.

200k @ 5% mortgage = 10k/mortgage.

Basic taxpayer? 20% of that 10k rent paid in tax, 2k shortfall.

Higher rate? 5k tax. 5k shortfall.

No assume the end game, which is limits on evictions for a tenant.

All those loans needs to be classified as impaired i.e. bank canot easily get the cash back.

Any bank selling IO BTL needs shooting. And they probably will.

 

 

 

 

 

 

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@spygirl you're all over the place

ignore the initial rate? Won't be able to go onto a new rate or switch provider?

Yes they advertise the LTV product not to sell it

Any data to back up no (or very few) IO mortgages are being written? 

It sounds like to me you're talking from anecdotal and wishful thinking. Undoubtedly the barriers of entry and some of the benefits to your everyday layman have been reduced, however to say BTL is dead is very far from a clear picture you would like to paint. Where is that Professor Werner video again....

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sleepwello'nights

The private rental sector has been in existence since Roman times if not earlier. Various forms of tenancy evolved through the dark ages, the Norman conquest, medieval times, the reformation, the enclosure acts and the industrial revolution. Major changes came about in the 20th Century when tenants were given stronger rights. Various reforms were introduced giving tenants more protection. 

What most recent protests centre on is the surge in the private rental sector in the late 1990s brought about by the widened definition in the Housing Act 1996. This encouraged many more to purchase dwellings for the purpose of renting them to tenants. The taxation of land and buildings were advantageous to landlords and the boom in prices enabled some to leverage their capital gains and greatly expand the number of properties they rented. 

Naturally there was resentment from those who saw themselves as being priced out of home ownership. Forgetting of course that the increase in home ownership from the 60s onwards was a recent phenomenon; in earlier years where the majority of the population were unable to purchase and renting was the norm.

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Wight Flight
12 minutes ago, sleepwello'nights said:

resentment from those who saw themselves as being priced out of home ownership.

You mean those who actually have been priced out, surely?

It is not imaginary.

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sleepwello'nights
6 minutes ago, Wight Flight said:

You mean those who actually have been priced out, surely?

It is not imaginary.

No I mean those who foresaw a house price crash and sold so they could purchase a bigger house for less than they sold their existing home for.

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Wight Flight
2 minutes ago, sleepwello'nights said:

No I mean those who foresaw a house price crash and sold so they could purchase a bigger house for less than they sold their existing home for.

Straw man.

I don't think I have actually met one of those in real life.

I do know a lot of priced out having never bought, and probably never will though.

 

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sleepwello'nights
Just now, Wight Flight said:

Straw man.

I don't think I have actually met one of those in real life.

I do know a lot of priced out having never bought, and probably never will though.

 

Yet my son, and many of his friends, without help from their parents bought houses. They aren't whinging about being priced out.

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Wight Flight
Just now, sleepwello'nights said:

Yet my son, and many of his friends, without help from their parents bought houses. They aren't whinging about being priced out.

Put some numbers on that. Date / Age / Area / Income?

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sleepwello'nights

I'm surprised you're not asking for names so you can properly verify my assertionst!!

We live in North Hampshire, my son is now in his mid 30s as are most of his friends. Some went to Uni others didn't. Some are in professional jobs others are in trades. Some are married, some not, some have children, some not.

I wonder if your business had been more successful whether you would have entered into BTL  as a way to use your capital to enhance your income or pension provision?

As I've said before private rentals are legal and I have no moral or ethical objections. I personally did well from it, I lucked in. Does that make me evil?

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Noallegiance
2 hours ago, sleepwello'nights said:

I'm surprised you're not asking for names so you can properly verify my assertionst!!

We live in North Hampshire, my son is now in his mid 30s as are most of his friends. Some went to Uni others didn't. Some are in professional jobs others are in trades. Some are married, some not, some have children, some not.

I wonder if your business had been more successful whether you would have entered into BTL  as a way to use your capital to enhance your income or pension provision?

As I've said before private rentals are legal and I have no moral or ethical objections. I personally did well from it, I lucked in. Does that make me evil?

No.

It's makes you a leech. They're not evil. They just do what they're here to do.

The difference is that I have no evidence to suggest that leeches think they're awesome and inspiring business people worth emulating, considering that conditions in which leeches thrive are also handed to them on a plate and they also need to apply almost zero thought.

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Wight Flight
2 hours ago, sleepwello'nights said:

I'm surprised you're not asking for names so you can properly verify my assertionst!!

We live in North Hampshire, my son is now in his mid 30s as are most of his friends. Some went to Uni others didn't. Some are in professional jobs others are in trades. Some are married, some not, some have children, some not.

I wonder if your business had been more successful whether you would have entered into BTL  as a way to use your capital to enhance your income or pension provision?

As I've said before private rentals are legal and I have no moral or ethical objections. I personally did well from it, I lucked in. Does that make me evil?

Mid thirties - so probably bought 10-12 years ago?

Things are just that little bit different now.

I do think you need to actually open your eyes and see how arse-raped the current crop of university leavers will be compared to even 10 years back. And I am sorry to say that BTL has been a very large part of this. (the policy, not necessarily the landlords)

 

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Nothing to do with me. Ive just seen the article posted.

https://www.telegraph.co.uk/investing/buy-to-let/could-finish-buy-to-let-landlords-renters-lock-horns-no-fault/amp/

As it stands - LL defaults, bank repos, tenant evicted. Bank can get assets back, no problem, few months.

LL dealt with by bankruptcy, tenant has fuckall rights, on street.

Io btl is so politically dumb and leveraged, tgat ukgov is bringing in more regulation.

As soon as a tenant has rights - bang, thats it, bank cannot get a claim repo on their debt. and their loan book becomes much more complex and expensive.

Agdin, from a banking point io btl is a stuoid stupid idea. Effectively its a bank hnding its capital out to moron ll to run sub scale rentsls for the bank. Its fucking insane banking.

 

 

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sleepwello'nights
1 hour ago, Wight Flight said:

Mid thirties - so probably bought 10-12 years ago?

Things are just that little bit different now.

I do think you need to actually open your eyes and see how arse-raped the current crop of university leavers will be compared to even 10 years back. And I am sorry to say that BTL has been a very large part of this. (the policy, not necessarily the landlords)

 

Mind you the current crop of university leavers chose to go to university. Did they really expect to get an education that would enhance their earning prospects?

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1 hour ago, spygirl said:

Thats totally meaningless.

Percentage of what? Mortgages sold?

 

 

How is it meaningless? Why not go look at the data yourself, I'm not doing all the leg work for you.  Please supply the "meaningful" data to back up your assertions that BTL is dead rather than wishful thinking and trumped up pay to view (lol) msm puff pieces.  

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Wight Flight
1 hour ago, sleepwello'nights said:

Mind you the current crop of university leavers chose to go to university. Did they really expect to get an education that would enhance their earning prospects?

Yes they fucking did.

They can't even become a copper or a nurse without first incurring a £60k debt.

You probably think if they hadn't bought an iPhone they would have a BTL portfolio by now.

 

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One percent
6 minutes ago, Wight Flight said:

Yes they fucking did.

They can't even become a copper or a nurse without first incurring a £60k debt.

You probably think if they hadn't bought an iPhone they would have a BTL portfolio by now.

 

Who the fuck would want to get into 60k worth of beat for the privilege of being a nurse or a copper?  o.O

me thinks they will struggle to recruit 

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Wight Flight
1 minute ago, One percent said:

Who the fuck would want to get into 60k worth of beat for the privilege of being a nurse or a copper?  o.O

me thinks they will struggle to recruit 

Yep. A good excuse to bring in more furriners. I wonder if the same rules apply?

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