How does Buy to Let END!

[Sue Lowe]

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https://www.thisismoney.co.uk/money/mortgageshome/article-11803073/One-three-landlords-struggling-remortgage.html#readerCommentsCommand-message-field

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The usual ignorant comments about private LLs. I have only ever owned my own property but if they keep selling up, rents will go up even more because there will be less property available.

Plenty of nonsense like this in the comments.

There must be quite a few "investors" like this who are worried that their main residence will be repossessed and they'll soon be renting themselves.

[spygirl]

53 minutes ago, Sue Lowe said:

Plenty of nonsense like this in the comments.

There must be quite a few "investors" like this who are worried that their main residence will be repossessed and they'll soon be renting themselves.

No they wont - all the LLs will have sold up ....

 

[eek]

53 minutes ago, Sue Lowe said:

There must be quite a few "investors" like this who are worried that their main residence will be repossessed and they'll soon be renting themselves.

That would be a level of knowledge and understanding well beyond your average landlord...

[Wight Flight]

8 hours ago, spygirl said:

Ive bolded + underlined a sentence in my post.

One in three landlords could be forced to sell up after failing their lender's affordability test to remortgage

• Letting agents report rise in number of private landlords selling properties
• Rates for homeowners have dipped but buy-to-let rates remain stubbornly high 
• A third of buy-to-let mortgage applications are now being rejected 
• Some buy-to-let investors being forced to accept variable rates as high as 9.5% 

https://www.thisismoney.co.uk/money/mortgageshome/article-11803073/One-three-landlords-struggling-remortgage.html?ico=mol_desktop_money-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fmoney%2Findex.html

 

 

 

Let's look at the numbers in simple terms.

A LL might be able to get a new fix at 5.5%.

Looking at our favourite leveraged to the eyeballs landlord, for every £100k of property they own, they will owe £75k.

Which will cost him £3,750 in interest.

That has to be 145% of his rent, so he needs to charge £5,437 for every £100k the house is worth.

A yield of 5.4%.

That is dreamland in the SE. 4% is seen as good. So £4k per year income. Which will allow him to pay £2,758 in interest, covering a loan of £50,100. 

To keep his best case interest rate he will need to pay down his debt by £25k for every £75k borrowed.

Good luck with that.

Of course he could try to sell to another landlord, who would also only be able to borrow £50k, meaning at full leverage he would only be able to pay £66k for this theoretical £100k asset.

Original landlord has lost his deposit and a further £9k for every £100k of property he owns.

So the question is, can he manage to pay off 33% of his borrowing, or face losing all his collateral plus 9% of his portfolio value?

 

 

 

[Heart's Ease]

Anecdotal.

 

Listings in my small postcode search area (around 60-70 at one time now 75) are picking up. Other than equity swopping in multiple £100ks, houses are mostly stone terrace, no garden, no parking. Solid 19c stock but EPC difficult to improve. £150-£180kish peak is in from last summer. 

 

Difference is rather than usual churn it's clearly BTL/landlords selling up. More by auction than I've seen before. I have never seen sales with sitting tenant. Now two in last week.

 

New one today - stone terrace. EPC 3, £67000, £495pcm rent. Long term tenant. By auction. I'd be surprised if it sells for that but who is going to be interested?

[MrXxxx]

14 minutes ago, Heart's Ease said:

Anecdotal.

 

Listings in my small postcode search area (around 60-70 at one time now 75) are picking up. Other than equity swopping in multiple £100ks, houses are mostly stone terrace, no garden, no parking. Solid 19c stock but EPC difficult to improve. £150-£180kish peak is in from last summer. 

 

Difference is rather than usual churn it's clearly BTL/landlords selling up. More by auction than I've seen before. I have never seen sales with sitting tenant. Now two in last week.

 

New one today - stone terrace. EPC 3, £67000, £495pcm rent. Long term tenant. By auction. I'd be surprised if it sells for that but who is going to be interested?

Well the EPC 3 is fine for a BTL, as that's the minimum requirement isn't it?...4 or above [especially if its stock that's difficult to improve] is where the BTL would want to get out.

[Heart's Ease]

1 hour ago, MrXxxx said:

Well the EPC 3 is fine for a BTL, as that's the minimum requirement isn't it?...4 or above [especially if its stock that's difficult to improve] is where the BTL would want to get out.

Yup 3 or C is fine (from 2025). A lot of the stock isn't that high - here's a typical stone terrace with a D. Different West Yorkshire search area (used to live in Shipley and still keep an eye on it) but similar properties. (Not clear from advert whether this is landlord owned but it's not the usual Saltaire boho).

https://www.rightmove.co.uk/properties/130682423#/?channel=RES_BUY

[MrXxxx]

5 minutes ago, Heart's Ease said:

Yup 3 or C is fine (from 2025). A lot of the stock isn't that high - here's a typical stone terrace with a D. Different West Yorkshire search area (used to live in Shipley and still keep an eye on it) but similar properties. (Not clear from advert whether this is landlord owned but it's not the usual Saltaire boho).

https://www.rightmove.co.uk/properties/130682423#/?channel=RES_BUY

I note that it says D with potential B...what would be required to get to C or B?...its a mid-terrace so should be fairly efficient anyway i.e. only two walls creating heat loss; I assume given its age its a single skin rather than cavity...would just insulating the loft with insulation bump it up to C?

[Heart's Ease]

21 minutes ago, MrXxxx said:

I note that it says D with potential B...what would be required to get to C or B?...its a mid-terrace so should be fairly efficient anyway i.e. only two walls creating heat loss; I assume given its age its a single skin rather than cavity...would just insulating the loft with insulation bump it up to C?

No detailed EPC report in that listing, but another Saltaire property has. 

https://www.rightmove.co.uk/properties/130166159#/?channel=RES_BUY

Snipped the relevant sections below.  Taking loft insulation to 250mm is the quick win.

Woah. I take that back. Had a look at this blog which shows the impact of taking insulation from 100mm to 270mm. 

It only gives you an additional 2 points towards re-rating the property.

https://www.london-epc.co.uk/will-loft-cavity-insulation-affect-epc-rating/

Edited March 2, 2023 by Heart's Ease
Looked up the impact of increasing loft insulation and had a surprise

[MrXxxx]

10 minutes ago, Heart's Ease said:

No detailed EPC report in that listing, but another Saltaire property has. 

https://www.rightmove.co.uk/properties/130166159#/?channel=RES_BUY

Snipped the relevant sections below.  Taking loft insulation to 250mm is the quick win.

This got me thinking...I think the next Government tax scam is going to be based on energy ratings, and be 'justified' around the climate issue and your properties pollution contribution to the environment; in a similar fashion to ULEZ type charging for vehicles.

Each property will not only have a Council tax rating, but applied to this will be an efficiency rating multiplier.Say your property is Council Tax band B, and this equates to £1200 pa. This will then multiplied for Energy efficiency [lower case], say a=1/b=1.1/c=1.2/d=1.4/e=1.8/f=2.6/g=3.2, so a property in Counci Tax band B with an energy efficiency rating of b would be £1320pa [£1200 x 1.1 (b rating)] whereas a property in the same  CT band with a poor energy efficiency of say g would be £3840pa [£1200 x 3.2 (g rating)]. Being a non-linear increase would me that it is punitive on those whose property causes more pollution; and would be justified as such, and would encourage people to improve their insulation to a minimum [say c] level.

Needless to say this additional revenue wont actually be used by the local council for environmental issues [as is already the case with ULEZ in London], but simply to subsidize spending elsewhere. It will also allow the government to reduce LA spending [or not increase it], and will simply be another 'stealth' tax on those who cannot avoid it.

[eek]

The EPC is at https://find-energy-certificate.service.gov.uk/energy-certificate/8917-0829-4150-0498-2202

Note that it suggests things such as double glazing (which in that area you are not going to get.

Internal wall insulation front and rear will give you what's need

[eek]

5 minutes ago, MrXxxx said:

This got me thinking...I think the next Government tax scam is going to be based on energy ratings, and be 'justified' around the climate issue and your properties pollution contribution to the environment; in a similar fashion to ULEZ type charging for vehicles.

Each property will not only have a Council tax rating, but applied to this will be an efficiency rating multiplier.Say your property is Council Tax band B, and this equates to £1200 pa. This will then multiplied for Energy efficiency [lower case], say a=1/b=1.1/c=1.2/d=1.4/e=1.8/f=2.6/g=3.2, so a property in Counci Tax band B with an energy efficiency rating of b would be £1320pa [£1200 x 1.1 (b rating)] whereas a property in the same  CT band with a poor energy efficiency of say g would be £3840pa [£1200 x 3.2 (g rating)]. Being a non-linear increase would me that it is punitive on those whose property causes more pollution; and would be justified as such, and would encourage people to improve their insulation to a minimum [say c] level.

Needless to say this additional revenue wont actually be used by the local council for environmental issues [as is already the case with ULEZ in London], but simply to subsidize spending elsewhere. It will also allow the government to reduce LA spending [or not increase it], and will simply be another 'stealth' tax on those who cannot avoid it.

Can't be done without trashing listed buildings so would never get past a civil service sanity check (although it does make sense).

[MrXxxx]

2 minutes ago, eek said:

Note that it suggests things such as double glazing (which in that area you are not going to get.

Is this because of the properties listed status OR just a fact that people have fitted it yet?

[eek]

1 minute ago, MrXxxx said:

Is this because of the properties listed status OR just a fact that people have fitted it yet?

World Heritage site from memory so listed status and you wouldn't be allowed to.

[MrXxxx]

2 minutes ago, eek said:

Can't be done without trashing listed buildings so would never get past a civil service sanity check (although it does make sense).

Well they could always have an 'exceptions' rule as they do with 40yr old + cars getting Classic status; these are exempt from VED, annual MOT tests, and ULEZ charging.

[Heart's Ease]

24 minutes ago, eek said:

World Heritage site from memory so listed status and you wouldn't be allowed to.

There's a whole load of conservation requirements set out for Saltaire. Can get double glazing but has to be in wooden frames.

[Ash4781b]

On 01/03/2023 at 15:31, Sue Lowe said:

Plenty of nonsense like this in the comments.

There must be quite a few "investors" like this who are worried that their main residence will be repossessed and they'll soon be renting themselves.

“Vanessa Warwick's buy-to-let mortgage payments increased from £450 to £1,100 last year. Co-founder of online landlord forum Property Tribes, Vanessa cannot currently remortgage from her lender's SVR of 5.75 per cent because she does not charge enough rent to satisfy its lending criteria.

Vanessa, 60, charges her tenants £1,100 a month for a house in Basingstoke, Hampshire.

'When the mortgage payments went up, I spoke to my letting agent, who told me the going rate for the area is £1,700,' she says.

'I've issued the tenants with an increase to £1,350, which I think is fair,' she adds. 'But if they cannot afford to pay, I'll have to sell.'

 

Even if the tenants accept the increase, Vanessa will still be unable to pass her lender's checks for a remortgage, so will have to look for a new deal.

 

'I've been a landlord since 1992 and this is the toughest environment I've experienced,' she says. 'It's no longer an attractive investment for new landlords.'”

 

Wow. Crazy.

And that’s an experienced landlord!

[Chewing Grass]

5 minutes ago, Ash4781b said:

Wow. Crazy.

And that’s an experienced landlord!

I think she might be more of an internet-shyster who needs to pass the begging bowl around for her 'legal costs'.

[spygirl]

52 minutes ago, Ash4781b said:

“Vanessa Warwick's buy-to-let mortgage payments increased from £450 to £1,100 last year. Co-founder of online landlord forum Property Tribes, Vanessa cannot currently remortgage from her lender's SVR of 5.75 per cent because she does not charge enough rent to satisfy its lending criteria.

Vanessa, 60, charges her tenants £1,100 a month for a house in Basingstoke, Hampshire.

'When the mortgage payments went up, I spoke to my letting agent, who told me the going rate for the area is £1,700,' she says.

'I've issued the tenants with an increase to £1,350, which I think is fair,' she adds. 'But if they cannot afford to pay, I'll have to sell.'

 

Even if the tenants accept the increase, Vanessa will still be unable to pass her lender's checks for a remortgage, so will have to look for a new deal.

 

'I've been a landlord since 1992 and this is the toughest environment I've experienced,' she says. 'It's no longer an attractive investment for new landlords.'”

 

Wow. Crazy.

And that’s an experienced landlord!

Thats the MTV vjay.

Shes experienced as in shes shagged all tte roadies.

I'd doubt the going rate in Bstoke is anywhere near that.

It's a jobless shithole where tghe cost to commute into London makes it worth moving to London.

[One percent]

8 hours ago, Heart's Ease said:

No detailed EPC report in that listing, but another Saltaire property has. 

https://www.rightmove.co.uk/properties/130166159#/?channel=RES_BUY

Snipped the relevant sections below.  Taking loft insulation to 250mm is the quick win.

Woah. I take that back. Had a look at this blog which shows the impact of taking insulation from 100mm to 270mm. 

It only gives you an additional 2 points towards re-rating the property.

https://www.london-epc.co.uk/will-loft-cavity-insulation-affect-epc-rating/

I always thought that stone walls were very goofy insulators, as long as there’s no damp of course.  

[One percent]

11 minutes ago, spygirl said:

Thats the MTV vjay.

Shes experienced as in shes shagged all tte roadies.

I'd doubt the going rate in Bstoke is anywhere near that.

It's a jobless shithole where tghe cost to commute into London makes it worth moving to London.

Someone was telling me that the rental cost of a three bedroom in t’ord spot is nudging 1k.  

[spygirl]

11 minutes ago, One percent said:

Someone was telling me that the rental cost of a three bedroom in t’ord spot is nudging 1k.  

Theres little to no stock.

All fhls.

Well over LHA allowances.

 

[One percent]

4 minutes ago, spygirl said:

Theres little to no stock.

All fhls.

Well over LHA allowances.

 

Yes but still, it shows rentals can be crazy money.  

[Chewing Grass]

8 hours ago, eek said:

Can't be done without trashing listed buildings so would never get past a civil service sanity check (although it does make sense).

Another problem is peoples perception of Cold, we have no heating on in Chez Chewy oop north and we would be lucky to scrape a C. Paying £4000 to £14000 as quoted to save £150 per annum as per sheet 2 is fucking insane when it could be invested.

Another problem is ethnics who have to live at +22C minimum.

If you want to punish energy use it should be done via the price, not something people either have no control over or don't currently need.

[MrXxxx]

55 minutes ago, Chewing Grass said:

Another problem is peoples perception of Cold, we have no heating on in Chez Chewy oop north and we would be lucky to scrape a C. Paying £4000 to £14000 as quoted to save £150 per annum as per sheet 2 is fucking insane when it could be invested.

Another problem is ethnics who have to live at +22C minimum.

If you want to punish energy use it should be done via the price, not something people either have no control over or don't currently need.

What you mean like an EPL?.....hope your pension provider has not committed your funds to any stocks in the energy sector and invested wisely in ESG stocks, otherwise how would you live with yourself'? :-)