Shocker Alert - The crash is worse than I thought!

brit1234 · 7 December 2008 at 1:47AM

Landlords demand relief on buy-to-let mortgages

Struggling tenants could be turfed out if scheme is not extended

Sunday, 7 December 2008

The Homeowner Mortgage Support Scheme should be extended to cover those who are behind on buy-to-let repayments, say groups representing landlords. :mad:

The government scheme, announced last week, is designed to underwrite, for up to two years, the mortgage payments of homeowners who have lost their jobs or suffered a sudden drop in income. The scheme was initially welcomed by commentators but is short on detail and reports have surfaced that only a fraction of the estimated 75,000 people who will face repossession next year will be helped.

Simon Gordon, head of communications at the National Landlords Association:mad:, says those who are in arrears with their buy-to-let mortgages should be covered by the scheme. "Seventy-one per cent of landlords expect rental arrears to be a major issue during 2009," he said. :eek:

Mr Gordon justified the extension of the scheme on the grounds that it would prevent hard-pressed tenants being turfed out on to the street.

"If the endgame is to prevent people losing their homes, then it makes no sense for buy-to-let mortgages to be exempt from these new measures. By giving landlords breathing space, they would have a chance to offer any struggling tenants a similar period to get their finances in order and prevent the homes being repossessed," he said.

http://www.independent.co.uk/money/mortgages/landlords-demand-relief-on-buytolet-mortgages-1055311.html

:eek:71% of landlords expect rental arrears to be a major issue during 2009 :eek:

That is truely shocking and far bigger than what my pesimistic self thought. Either the spokesman is over playing the issue to get asistance or buy to let is in a far worse state than we thought.

However and this is a big HOWEVER. Why should the tax payer bail out these investors when the governments actions are crippling other investors. Cash savers are having their funds crippled, shareholders have lost over a third of their value, short traders are being bankrupted because they had the nerve to highlight all the bad businesses.

No if you invest in property you should take the good with the bad. They were happy when prices were shootting up and pricing first time buyers out of the market. Now they want to keep their profits in the good years and tax payers to bail them out in the bad. What makes it worse is all the irresponsible practices they had, no money down, gift deposits, gearing, inerest only mortgages, massive fraud.

I say to the National Landlords Association as a tax payer, no to a bail out and go run off a cliff. I want my taxpayers money funding instead unemployment training, investment in green technology, supporting small businesses to generate jobs as well as all the hospital and school stuff. Not to The Wilsons :mad::mad: so they can buy another race hourse.

Cat695 · 7 December 2008 at 1:59AM

This thread will be interesting when people see it!!

As I've never been a renter or a BTLer I cannot make any other comment

Other than the govement cannot afford to bail every single person out whether a BTL or someone who rents or someone who just owns their home

So someone is going to take the fall and I'm guessing it will be the BTL market

matbe · 7 December 2008 at 2:01AM

I think the government should change the law so that if you are behind on rent you can be turfed out on the street with your family.

Then these landlords struggling with rent arrears can get decent tenants who can afford to pay for the rent.

I must pay my mortgage why should tenants think a free roof over their heads is a right ?

bo_drinker · 7 December 2008 at 2:03AM

I have a feeling I will be bailing out the masses for the rest of my life....

Zelie · 7 December 2008 at 2:51AM

The article appears to be conflating two distinct issues and to my mind seems poorly written.

On the one hand it talks about BTL landlords getting into arrears of mortgage payments due to the economic climate. Fair enough. But this is interspersed with comments about 'struggling tenants' and 'rent arrears'.

Now obviously if a tenant does not pay rent then this has an impact on the landlord. But why are all these tenants suddenly struggling? Why do the landlords assume the rent will not be paid? Yes there's a credit crunch but (I hope!) that the vast majority of people do not pay the rent from their credit cards. There have been job cuts but nothing to suddenly slash the income of millions of people. Hardly reason to panic and assume that everyone is going to suddenly get into rent arrears.

If the writers meant that landlords will get into mortgage arrears because they are on a high SVR and cannot change then that's a different issue. But it really could have been better written.

If BTL properties are repo'd then it's probably a good thing for tenants in general* as a heck of a lot of renters are only doing so while they wait for cheaper housing to arrive.

*Though obviously not the specific tenants in the property unless they happen to want to buy it and have the money available.

neverdespairgirl · 7 December 2008 at 3:50AM

matbe wrote: »

I think the government should change the law so that if you are behind on rent you can be turfed out on the street with your family.
?

Eh?

They are. Evictions after 2 months in arrears.

lynzpower · 7 December 2008 at 8:50AM

A few issues here to my mind.

1) I wonder if the new LHA has anything to do with this. I understand that now the LHA has to be paid to claimant and not to LL. Therefore the LHA could be used to live on- instead of paying the rent.

2) if this is because people are losing thier jobs/overtime then the situation will get a lot worse. But this is what HB/LHA is for- isnt it?

3) If you asked a LL why they are behind on thier BTL mortgage chances are they will simply blame the tenants- and say that have not been paid rent. Certianly that would be what one would say to the lender- if you did not want to tell the truth to your lender - over extended etc. If you are a BTL LL who has over extended and we do see so many of them on here who supplement the rent on the BTL from thier own pocket - what happpens when there is nothing left in the pocket of the LL? I have lost count of the amount of threads on here of people who have paid thier rent as tenants but still recieve the repo letter from the bank.

I think this is LLs trying to get the gov to bailout, when it is thier fault.

I do not know what the answer is to this,. but always wondered about the practicalities of LHA.

This is always the risk when you privatise a need into private hands. Government cannot tell what the truth really is. If you find out the LL is to blame, then what are the consequences?

PasturesNew · 7 December 2008 at 11:56AM

BTL is a business. BTL landlords bought property to make a profit, to become welathy. To become better than you/us/them/anybody.

It's a business like the local chip shop, or the local pub. One person's drive or greed.

It needs a business plan, a marketing strategy. An understanding of the risk and the legislations.

If you are a cr4p business, if you make cr4p business decisions, that's YOUR FAULT.

Through lies or greed or already being better off, BTL has allowed thousands of amateurs to bumble about playing with the lives of hard working people.

I say to landlords who need a bail out: PFFFFFFFFFFFFFFFFFFFFT

I will repeat that for people who can't cope with long words (i.e. LLs): PFFFT PFFFT PFFFT PFFFT

olly300 · 7 December 2008 at 12:58PM

lynzpower wrote: »

3) If you asked a LL why they are behind on thier BTL mortgage chances are they will simply blame the tenants- and say that have not been paid rent. Certianly that would be what one would say to the lender- if you did not want to tell the truth to your lender - over extended etc. If you are a BTL LL who has over extended and we do see so many of them on here who supplement the rent on the BTL from thier own pocket - what happpens when there is nothing left in the pocket of the LL? I have lost count of the amount of threads on here of people who have paid thier rent as tenants but still recieve the repo letter from the bank.

I think this is LLs trying to get the gov to bailout, when it is thier fault.
.

The answer is for the bank/building society to reprocess and work out whether due to the number of unsold properties in the area whether it's worth them taking the tenancy on or putting the property up for auction. Apparently only one lender (according to a report I heard on Friday) considers doing this with BTL properties.

I do have sympathy for the tenants in this case but none for the LL.

Gingernutmeg · 7 December 2008 at 1:07PM

As I tenant I'd rather see help for tenants, not landlords ... I've NEVER EVER paid my rent late (in fact, in my current property we changed the date so we pay early as we asked the landlady when her mortgage went out, and whether she'd prefer us to pay to correspond with that) and it annoys (and frightens) me that, should my landlord default on his/her mortgage, I could be out on the street in a matter of weeks, particularly if they haven't told their lender that they're renting the property out. It costs a b****y fortune to move - last time, when we added up deposits, fees, moving costs, time off work etc it came to about 4k, and because of a bad landlord we've had to do that twice in the last 12 months - and to have to find that amount of money and time 'suddenly' because my landlord can't run his/her business properly is a terrifying thought. I'd rather there was some money to help tenants who loose their 'homes' through no fault of their own, rather than help landlords who have been imprudent.

nickj_2 · 7 December 2008 at 2:56PM

the only shocking thing about this is that people find it shocking and are surprised by it
house prices have been overvalued for the last 8-9 years
at the last house price crash i think the average h/p was not above
90k , certainly not over £100k
banks have over lent and people have borrowed and lived way beyond their means
it was only a matter of time before it all came tumbling down
the higher you climb - the further there is to fall

Debate House Prices

Shocker Alert - The crash is worse than I thought!

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