How does Buy to Let END!

[Guest]

4 hours ago, spygirl said:

Neil France, a 66-year-old business consultant, started investing in property a decade ago, having become disillusioned with pensions.

i.e. he reached 56 years old, finally ran the numbers and realised he had been massively undersaving into his pension over the previous 4 decades of his working life, then panicked and made a 6 figure leveraged gamble on BTL to try to fix the mess

[JoeDavola]

5 hours ago, spygirl said:

Sally, a self-employed business sustainability consultant, became a landlord in 2017

You couldn't script it could you.

[JoeDavola]

5 hours ago, spygirl said:

43

  

5 hours ago, spygirl said:

 I also plan to start paying into a pension as soon as I can afford to.'

[spygirl]

46 minutes ago, JoeDavola said:

You couldn't script it could you.

By sustainability she means wanky green stuff rather than bizzyness stuff.

https://www.kentlive.news/news/kent-news/meet-whitstable-group-fighting-disgusting-5783677

https://suite.endole.co.uk/insight/company/09762815-11-twenty-two-limited

I love how lefties always go down landlording n properdee scamming to make money.

 

Too old for kids if shes not got them.

[spygirl]

Massive carbon footprint

https://www.lensculture.com/sally-burtt-jones

[JoeDavola]

She's a living meme basically.

[spygirl]

Have higher interest rates broken buy-to-let? As mortgaged landlords feel the strain, we look at whether it is still worth investing in property to rent

• Some 8% of landlords at 'serious' risk due to higher rates, says Hamptons
• Mortgage interest above 5% landlords investments become loss-making liabilities
• Hamptons report lays bare the likely impact and which investors will survive 

https://www.thisismoney.co.uk/money/buytolet/article-11964545/Mortgaged-landlords-feel-strain-higher-rates-buy-let-worth-it.html?ico=mol_desktop_home-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fhome%2Findex.html&_gl=1*1dyhim9*_ga*MTE1Mzg3NjA1NC4xNjc0MjEwOTc2*_ga_XE0XLFFF16*MTY4MTcyMzI2Mi4yNzIuMC4xNjgxNzIzMjY1LjAuMC4w

Their numbers are out.

*ALL* IO BTL are fucked.

For example, someone coming to the end of a two-year fixed rate on a buy-to-let property worth £200,000, with a 40 per cent deposit mortgage at a rate of 2.2 per cent and a 25-year term, would likely have been paying £2,666 each year in interest, according to Hamptons.

With mortgage rates now closer to 5 per cent, their annual payments would more than double to £6,060.

5% is a good resi repyment mortgage SVR FFS.

IO BTL need to be looking at 8% at best, 10% soon.

Based on the typical 6 per cent gross yield in England and Wales, which would translate to £12,000 a year in rental income on an average-priced home, a basic rate taxpayer landlord would see their post-tax profit shrink from £4,490 to £1,780.

Ahahahahahahahahahaha my sides have just split.

IO BTL fcukwits have been buying houses on sub 4% since ~2002.

A lot since 2013ish in London/SE have been sub 2%.

 

Rising rents will cushion the blow… somewhat

The average UK rent is now £1,184 per calendar month, according to the HomeLet Rental index - almost 10 per cent higher than a year ago and almost 20 per cent higher than the typical rent in March 2021.

No they wont.

Higher rents will mena higher voids.

 

[JoeDavola]

11 minutes ago, spygirl said:

The average UK rent is now £1,184 per calendar month

Would be interesting to see that as a percentage of the average UK take-home pay. Looks like it's over 50% assuming the person is paying into a pension.

I'd move back in with the folks before I'd hand some fucking landlord £1200 a month.

Edited April 17, 2023 by JoeDavola

[JoeDavola]

15 minutes ago, spygirl said:

For example, someone coming to the end of a two-year fixed rate on a buy-to-let property worth £200,000, with a 40 per cent deposit mortgage at a rate of 2.2 per cent and a 25-year term, would likely have been paying £2,666 each year in interest, according to Hamptons.

With mortgage rates now closer to 5 per cent, their annual payments would more than double to £6,060.

5% is a good resi repyment mortgage SVR FFS.

IO BTL need to be looking at 8% at best, 10% soon.

Am I right in thinking IO BTL is increasingly uncommon over the last decade though i.e. since the 2008 financial crisis.

[spygirl]

5 minutes ago, JoeDavola said:

Would be interesting to see that as a percentage of the average UK take-home pay. Looks like it's over 50% assuming the person is paying into a pension.

I'd move back in with the folks before I'd hand some fucking landlord £1200 a month.

Outside of families, Rentals are very flexible, dynaimc.

I jacked in a semi pad for by compnay 2br flat, which I had to myself, so a 4 people shared house.

The rent paid dropped from ~600m/ to 250/m. And my travel cost dropped 200/m.

 

[spygirl]

1 minute ago, JoeDavola said:

Am I right in thinking IO BTL is increasingly uncommon over the last decade though i.e. since the 2008 financial crisis.

No, its very much common.

The fuckwits still borroed and fuckwwit banks still lent after S24 was established.

Although the later (2012+) entrants paid a hefty deposit  40%+ rather than the sub 5% of pre 2008.

 

[JoeDavola]

3 minutes ago, spygirl said:

No, its very much common.

The fuckwits still borroed and fuckwwit banks still lent after S24 was established.

Although the later (2012+) entrants paid a hefty deposit  40%+ rather than the sub 5% of pre 2008.

 

'kinell - and that's 6% gross yield, take away your letting agent costs, maintenance costs etc...not the greatest business plan any more.

[spygirl]

18 minutes ago, JoeDavola said:

'kinell - and that's 6% gross yield, take away your letting agent costs, maintenance costs etc...not the greatest business plan any more.

Before IR rose, most of the BTL were skimming 50/100m over the mortgage payments.

Some were skimming ~400/m bu they have to have been very klucky at buying early on and raising rent and not losing tenants.

All that has gone now.

Pretty much every IO BTL Ive come across and asked about teir finances will be haivng to put severall £100 a month into the mortgage now.

The swing has been that fast and dramatic, as these various anecdotes show 

He says the property in jeopardy has an interest-only mortgage of £200,000. Originally, it cost £280 a month, offset by a rent of £700, so he was making a reasonable profit. Now, he lets it for £250 a month more, but his mortgage payments have gone up to £880.

 

 

[sancho panza]

2 hours ago, JoeDavola said:

Am I right in thinking IO BTL is increasingly uncommon over the last decade though i.e. since the 2008 financial crisis.

There are laods of elgacy laons from 06/07 let alone the stuff issued since.Som have folded others have used the quity to rotate onto reapyment( ie becuase tehir LTV wuill have dropped through to 2021)

The ones left will be dross I suspect @spygirl presumably the ones that cant migrate due to LTV

Edited April 17, 2023 by sancho panza

[JoeDavola]

14 minutes ago, sancho panza said:

There are laods of elgacy laons from 06/07 let alone the stuff issued since.Som have folded others have used the quity to rotate onto reapyment( ie becuase tehir LTV wuill have dropped through to 2021)

The ones left will be dross I suspect @spygirl presumably the ones that cant migrate due to LTV

That's shocking. They're mostly fucked surely.

Any indicator of how many repayment mortgages there are in the UK then? (Google wouldn't tell me.)

EDIT: And yes I know of one Owner Occupier who has been IO since he bought at the peak before the '08 cash. House still isn't worth what it was in £££ back then 15 years later.

Edited April 17, 2023 by JoeDavola

[AlfredTheLittle]

3 hours ago, JoeDavola said:

Would be interesting to see that as a percentage of the average UK take-home pay. Looks like it's over 50% assuming the person is paying into a pension.

I'd move back in with the folks before I'd hand some fucking landlord £1200 a month.

I was paying around this much as a single guy on a very average wage, because I needed to have my own place so my son could stay. I managed a few years but eventually something just had to change and I moved to house shares, it's not sustainable to pay all of your disposable income in rent every month long term, yet this is the position a lot of people are being sucked into.

[JoeDavola]

11 minutes ago, AlfredTheLittle said:

I was paying around this much as a single guy on a very average wage, because I needed to have my own place so my son could stay. I managed a few years but eventually something just had to change and I moved to house shares, it's not sustainable to pay all of your disposable income in rent every month long term, yet this is the position a lot of people are being sucked into.

Agreed - basically a single person working full time on an average wage in the UK can't afford to rent their own place any more.

[sancho panza]

40 minutes ago, JoeDavola said:

That's shocking. They're mostly fucked surely.

Any indicator of how many repayment mortgages there are in the UK then? (Google wouldn't tell me.)

EDIT: And yes I know of one Owner Occupier who has been IO since he bought at the peak before the '08 cash. House still isn't worth what it was in £££ back then 15 years later.

you're looking at aobut 1mn IO or partial IO.the numbers on mrotgages are hard to find for total mortgages weirdly.UK fiance is industry body and BoE publish data but their site is crap.Also,I'm not sure whetehr all buy to let mrotgages are inclued as some LL's have incroproated.

Looks about 10% is still IO,the rest repyment

https://www.finder.com/uk/mortgage-statistics

some good stats here more generally

https://www.money.co.uk/mortgages/uk-mortgage-statistics-and-facts

[Guest]

2 hours ago, JoeDavola said:

Any indicator of how many repayment mortgages there are in the UK then? (Google wouldn't tell me.)

I believe there are about 8 million mortgaged owner occupier households. English Housing Survey is probably a good source (though it's England only of course).

[spygirl]

17 hours ago, sancho panza said:

There are laods of elgacy laons from 06/07 let alone the stuff issued since.Som have folded others have used the quity to rotate onto reapyment( ie becuase tehir LTV wuill have dropped through to 2021)

The ones left will be dross I suspect @spygirl presumably the ones that cant migrate due to LTV

I think that might be just resi IO mortgages.

Ive looked but cant find for a tally of outstanding IO BTL loans.

Its going top be more than 1m.

Resi IO slowed down after 2007 then were banned going into MMR.

IO BTL continued at ~250k/y.

I cant stress how much IO BTL has been *the* market in a lot of Northern town. Prob in London too.

And I cant stress how many houses ar on the chop when a IO loan goes bad - all the BTls plus the LL resi house.

 

 

 

 

 

[JoeDavola]

1 hour ago, spygirl said:

I cant stress how much IO BTL has been *the* market in a lot of Northern town. Prob in London too.

We'd need some proof of that I guess, but if that is true then that sector of the market is a whole house of cards that will collapse in coming years if IR's don't drop.

Don't think it's the case in NI, plenty of residential mortgages and rich boomers buying stuff for cash.

What I will say is that of my peers who bought their first houses during the crash (through sheer luck; they just happened to be of 'house buying age' at about 2012) have mostly just remained in the first houses they bought - i.e. there is no ladder for them any more and as we all reach the big 4-0 this year it looks increasingly unlikely they will have the appetite (or ability) to take on another £150K+ of debt at 5% at this age to move 'up the ladder'.

Edited April 18, 2023 by JoeDavola

[spygirl]

25 minutes ago, JoeDavola said:

We'd need some proof of that I guess, but if that is true then that sector of the market is a whole house of cards that will collapse in coming years if IR's don't drop.

Don't think it's the case in NI, plenty of residential mortgages and rich boomers buying stuff for cash.

What I will say is that of my peers who bought their first houses during the crash (through sheer luck; they just happened to be of 'house buying age' at about 2012) have mostly just remained in the first houses they bought - i.e. there is no ladder for them any more and as we all reach the big 4-0 this year it looks increasingly unlikely they will have the appetite (or ability) to take on another £150K+ of debt at 5% at this age to move 'up the ladder'.

IO BTL: has priced out/remove ~20years of FTBs.

FTBs have been forced into expensive rental, whilst the bank n LL skim their money.

These FTB have not built up any equity in the 20y.

When these FTBs come buy, the only mortgage they can get will be based on theior earnigns. There will be no 20y of equity to put into the purchase.

This is going to hammer non BTL house prices. as OO come to sell.

Again, tis not going to be just renters out for IO BTL blood.

 

 

 

[JoeDavola]

1 minute ago, spygirl said:

FTBs have been forced into expensive rental, whilst the bank n LL skim their money.

These FTB have not built up any equity in the 20y.

When these FTBs come buy

I actually don't think that demographic ever will buy sadly.

I think there'll always be bigger money willing to snap up the homes, unless there's a complete change in how people view property in this country i.e. start viewing it as a liablity.

[spygirl]

5 minutes ago, JoeDavola said:

I actually don't think that demographic ever will buy sadly.

I think there'll always be bigger money willing to snap up the homes, unless there's a complete change in how people view property in this country i.e. start viewing it as a liablity.

OAPs die.

You can piss around with the market timing but you cant hold a housing postion for long.

bear in mind that ~30%-50% of houeholds udner 40 dependign on bennies fro the blk of their income.

Theres a huge demographis timebomb heading forthe pythohs arse. Its goign to dump.

 

 

[Wight Flight]

1 hour ago, JoeDavola said:

I actually don't think that demographic ever will buy sadly.

I think there'll always be bigger money willing to snap up the homes, unless there's a complete change in how people view property in this country i.e. start viewing it as a liablity.

We hear 500k landlords are due to sell up.

I do wonder who is going to buy these houses?

The landlords are selling because the numbers no longer stack up, so why would another landlord buy?

Tenants are currently paying a lot less in rent than they would for a mortgage on their home - so probably can't afford to buy, but also why would they when they currently have a good deal and are looking at buying in to a falling market?

I think we have a proper stalemate at current prices.

Edited April 18, 2023 by Wight Flight