How does Buy to Let END!

[Wight Flight]

7 minutes ago, JohnnyB said:

Mortgage renewals are increasingly shifting away from 5y and to 2y and svr according to the Times.

Seems the people are betting that interest rates will be heading down shortly. That's what those clever economists are saying!

Perhaps they will be vindicated. But if that isn't proved to be correct and in 2 years the rates are higher, many will be double-fucked

My guess is they know they can't afford the current rates for long. Going 5 years is guaranteed failure, so you might as well go svr and cross your fingers.

[GTM]

1 hour ago, spygirl said:

I had a property for a buy to let

Well, at least they seem properly appraised of what is soon to occur. 

Edited July 3, 2023 by GTM

[tank]

21 hours ago, Wight Flight said:

But is that effective demand? I don't think so.

Unless they all plan to live under a bridge, it results in excess demand for housing whilst supply is very low hence the sky high rents. 

Rent is counted for GDP purposes and private rentals form a big part of the UK property market and its overall economy.

Owner occupier prices - i.e for detached or semi detached housing -  are generally determined by how many capital rich boomers there are directly or indirectly - i.e. via their subbed adult children - influencing the local markets. Put immigration and cashed up boomers together and I doubt prices will fall significantly over the next 12 to 24 months unless there is an external shock worse than 2008. 

Edited July 4, 2023 by tank

[spygirl]

1 hour ago, tank said:

Unless they all plan to live under a bridge, it results in excess demand for housing whilst supply is very low hence the sky high rents. 

Rent is counted for GDP purposes and private rentals form a big part of the UK property market and its overall economy.

Owner occupier prices - i.e for detached or semi detached housing -  are generally determined by how many capital rich boomers there are directly or indirectly - i.e. via their subbed adult children - influencing the local markets. Put immigration and cashed up boomers together and I doubt prices will fall significantly over the next 12 to 24 months unless there is an external shock worse than 2008. 

Theres supply, demand, and the ability to pay for something.

The dingy drivers will fall far far short of the last one.

 

 

[Rare Bear]

20 hours ago, JohnnyB said:

Mortgage renewals are increasingly shifting away from 5y and to 2y and svr according to the Times.

Seems the people are betting that interest rates will be heading down shortly. That's what those clever economists are saying!

Perhaps they will be vindicated. But if that isn't proved to be correct and in 2 years the rates are higher, many will be double-fucked

Might be a case of brokers advising a 2 year fix instead of 5 to increase churn.

[Long time lurking]

[tank]

21 hours ago, spygirl said:

Theres supply, demand, and the ability to pay for something.

The dingy drivers will fall far far short of the last one.

 

 

The dinghy brigade are a miniscule number and a distraction. 

The official net immigration intake, in other words those arriving in the UK by legal means and with Home Office issued visas, has been doubled since 2021. Many are here on temporary student or short stay visas from the third world and experience would suggest that 80%+ will overstay. 

These people are not going to be living under bridges or in hotels owned by Tory donors and flunkies. They will mostly rent 8 or 10 to a 2 bed flat and keep the BTL market in the major cities propped up. As noted by a few on here, a disproportionate number of the leveraged BTLers in England are South Asian. Indians tend to rent to fellow Indians, Pakistanis to Pakistanis and so on. 

Edited July 5, 2023 by tank

[spygirl]

https://www.bbc.co.uk/news/uk-england-london-66070462

London's housing market is enduring a tough time due to extortionate rent increases and some mortgage rates spiralling to new heights. The situation has led to some landlords leaving the market - a move that could further exacerbate the capital's rental crisis, say property commentators.

When the Bank of England raised the base rate in June, landlord Paul Bradley saw the cost of his interest-only variable tracker mortgage go up by £46.

Mr Bradley's mortgage has tripled in the past three years - from £304 to £932 a month.

The 74-year-old has been renting his flat in Enfield, north London, to a tenant for just over £1,000 a month.

Mr Bradley says that this, coupled with other costs including tax, mean he is "well out of pocket" and is in effect subsidising the tenant to live in the property.

"I'm losing about £250 at the moment so it's going to be £300 a month," he says.

Mr Bradley wants to sell the flat but says the tenant has refused to leave so he has to go to court to get the property back.

• 'We've got £1,750 and can't find anywhere to rent'
• 'I can't rent anywhere affordable as a single mum'

Mr Bradley lives in the Midlands with his family but said he kept the Enfield flat as a "nest egg".

However he is now in arrears and says "it's tough" to manage.

He says he knows of other landlords with mortgages that are also selling up.

[Wight Flight]

5 minutes ago, spygirl said:

Mr Bradley lives in the Midlands with his family but said he kept the Enfield flat as a "nest egg".

In which case why does he have a mortgage?

[spygirl]

37 minutes ago, Wight Flight said:

In which case why does he have a mortgage?

Reading between the lines - - Cashing out equity on a London council flat, moving to (cheaper) Midlands then renting it.

 

[Heart's Ease]

14 hours ago, Long time lurking said:

 Thought I'd have a click around Halifax on the BTL mortgage page.

First paragraph:

"After the fixed period, all of our mortgages revert to a tracker rate (currently 9.34%) that tracks at +4.34% above the Bank of England Bank Rate, for the remainder of the term. Product fees can be paid up-front or added to your mortgage."

2yr LTV 70-75% initial rate 7.12%

https://www.halifax.co.uk/mortgages/buy-to-let/current-rates.html

Just for the record.

Been following this thread and Bland Insights previously on TOC for 84 years (and that countdown by Jilted Jen?). Surely it's over, now?

[Boon]

1 hour ago, spygirl said:

Reading between the lines - - Cashing out equity on a London council flat, moving to (cheaper) Midlands then renting it.

 

You're right. 

Googling the complainant as always brings up more details:

https://www.landlordzone.co.uk/news/mortgages-landlord-tells-bbc-how-payments-have-tripled-over-past-year/

As usual the media don't really ask any tough questions that jump out, just try and distort it.

Why the fuck does he have a mortgage at his age? 

And considering he has had £1000+ rent vs £304 mortgage costs for the past decade until last year, why the fuck is he in arrears?

Answer is probably that he remortgaged to buy elsewhere. It is almost like people doubling down at the casino and then complaining when it goes wrong. 

[spygirl]

Via TOS

Please give generously.

 

 

[Wight Flight]

2 hours ago, spygirl said:

Mr Bradley says that this, coupled with other costs including tax, mean he is "well out of pocket" and is in effect subsidising the tenant to live in the property.

Seems fair. The tenant has been subsidising his lifestyle for years.

[Long time lurking]

1 hour ago, Heart's Ease said:

 Thought I'd have a click around Halifax on the BTL mortgage page.

First paragraph:

"After the fixed period, all of our mortgages revert to a tracker rate (currently 9.34%) that tracks at +4.34% above the Bank of England Bank Rate, for the remainder of the term. Product fees can be paid up-front or added to your mortgage."

2yr LTV 70-75% initial rate 7.12%

https://www.halifax.co.uk/mortgages/buy-to-let/current-rates.html

Just for the record.

Been following this thread and Bland Insights previously on TOC for 84 years (and that countdown by Jilted Jen?). Surely it's over, now?

Well looking at the LTV requirement up until rates started rising most were 80% so to get from the 9.34 they are going to have to find £5-10K for every £100K of debt plus fees which i`m guessing are £2k + 

When anyone with two brain cells to rub together will know equity is always the first casualty so that money  could be gone within a months once prices start to fall 

 

The only problem with this situation is will the lenders reposes as that will be the determining factor when it comes to supply, IMO 

I can remember the late 80`s early 90`s  where those that were deep in negative equity had no choice but to sit tight providing they could afford the payments 

I think the real question is can/will the government QE to bail out the banks as that`s the only thing that will now stop repossessions ,i have the distinct feeling they wont ,as they have finally seen the elephant in the room

I also get the feeling the banks are about to fill the void in the BTL sector ,they look to be buying new build perhaps we will see bank owned housing estates in the future which will replace what used to be council estates,if that is the case HPC would also fit their agenda 

[Option5]

25 minutes ago, Long time lurking said:

I also get the feeling the banks are about to fill the void in the BTL sector ,they look to be buying new build perhaps we will see bank owned housing estates in the future which will replace what used to be council estates,if that is the case HPC would also fit their agenda 

The banks probably already own the new build estates through financing. Just wait for the builder to start running out of money then make them an offer they can't refuse.

[Long time lurking]

1 minute ago, Option5 said:

The banks probably already own the new build estates through financing. Just wait for the builder to start running out of money then make them an offer they can't refuse.

Yep but on the BTL front i still think we need to see a significant drop before the shit really hit`s the fan considering how mental the price rises have been in the last few years ,that will have to be wiped out before D day arrives 

My bell weather is in the street i live three places went sold in January ,yet no one has moved into any of them  one was put back on the market and sold again but i see people still viewing it ,all were BTL

[sancho panza]

2 hours ago, Heart's Ease said:

 Thought I'd have a click around Halifax on the BTL mortgage page.

First paragraph:

"After the fixed period, all of our mortgages revert to a tracker rate (currently 9.34%) that tracks at +4.34% above the Bank of England Bank Rate, for the remainder of the term. Product fees can be paid up-front or added to your mortgage."

2yr LTV 70-75% initial rate 7.12%

https://www.halifax.co.uk/mortgages/buy-to-let/current-rates.html

Just for the record.

Been following this thread and Bland Insights previously on TOC for 84 years (and that countdown by Jilted Jen?). Surely it's over, now?

Just had a quick chat with the family friend who has 25 BTL's hitting the wall(was making £5k pcm last year,now losing £5k pcm)

They're finding in out in the next week if they can remo their £3mn portfolio.Looking at thsoe rates its unlikely.LTV was circa 100%.

I think they'll be a lot who are LTVed at 60% + finding out the bad news about the SVR in the next year.

[spygirl]

2 hours ago, Option5 said:

The banks probably already own the new build estates through financing. Just wait for the builder to start running out of money then make them an offer they can't refuse.

Two banks - Natiowide n HBOS.

The rest mainly avoided HTB loans.

Spent a few 10k on posters. made sure the hurdle saw fuckall qualify.

 

 

[spygirl]

1 hour ago, sancho panza said:

Just had a quick chat with the family friend who has 25 BTL's hitting the wall(was making £5k pcm last year,now losing £5k pcm)

They're finding in out in the next week if they can remo their £3mn portfolio.Looking at thsoe rates its unlikely.LTV was circa 100%.

I think they'll be a lot who are LTVed at 60% + finding out the bad news about the SVR in the next year.

Back shcool hooror friendfoMrs spy starter her BT Lempire ~6years ago - post S24, just to show how loon she is.

Went in at 80% LTV.

Scapping a margin of ~£100 - £1k/m rent v £800/m rent

Remotgage 2 years down the line. Had to throw in another 20% to keep the SVR n APR down.

Bought 2 more. SImialr low yield.

last time I heard from her IO BTL SVRs weer 5%.

I expect that each hosue is now needs ~1k/m of cash to be put in.

No chance of rent increase.

 

 

[sancho panza]

56 minutes ago, spygirl said:

Back shcool hooror friendfoMrs spy starter her BT Lempire ~6years ago - post S24, just to show how loon she is.

Went in at 80% LTV.

Scapping a margin of ~£100 - £1k/m rent v £800/m rent

Remotgage 2 years down the line. Had to throw in another 20% to keep the SVR n APR down.

Bought 2 more. SImialr low yield.

last time I heard from her IO BTL SVRs weer 5%.

I expect that each hosue is now needs ~1k/m of cash to be put in.

No chance of rent increase.

 

 

Bet she dpesnt realsie that if the BTLs are in her name then the family home is in the line of fire....

Genuinely,I do wodner what the banks were doing lending to these people.....

[Innkeeper]

1 hour ago, sancho panza said:

Bet she dpesnt realsie that if the BTLs are in her name then the family home is in the line of fire....

Genuinely,I do wodner what the banks were doing lending to these people.....

Presumably playing a numbers game - same as they did when giving credit card limits of 10k to people on little more than the minimum wage.  

I knew one bloke who ran up multiple credit card debts totalling 50k, got them basically wiped out (paying nominal monthly sum back) and he then managed to repeat the process all over again for another 50k!  The banks won’t see most of the cash again - the courts seem to take a dim view of over enthusiastic lenders.

[spygirl]

From TOS

Cant be arsed to fight twitter

https://www.housepricecrash.co.uk/forum/index.php?/topic/250074-btl-property-investor-goes-into-meltdown/

Leverage is great - til IR go up.

 

 

https://www.youtube.com/@SamuelLeeds/videos

[sancho panza]

33 minutes ago, spygirl said:

From TOS

Cant be arsed to fight twitter

https://www.housepricecrash.co.uk/forum/index.php?/topic/250074-btl-property-investor-goes-into-meltdown/

Leverage is great - til IR go up.

 

 

https://www.youtube.com/@SamuelLeeds/videos

Surreal.Thats a great mix of vids.Exemplifies the euphoria and insanity at the top.

'Bank of Englands fault that I borrowed to excess to the point that I couldnt afford a rise from 2% to 3% let alone 6%'

Glad Im not a bank shareholder

 

Edited July 6, 2023 by sancho panza

[AWW]

I'll add the twitter link because this is absolute gold. He redefines "nice money" as "a couple of hundred pounds a month" then goes on to accept all the blame because he thought that was a good return for massive IR risk. Oh wait no, he blames the BoE.