I don't mean to boast but...

Antispam

Lets hope OP doesn't fall flat on his face.

LittleMissAspie

LandlordLee wrote: »

Is anyone else seeing benefits?

Yes, we should be able to negotiate a lower rent when we renew our contract.

toonfish

LittleMissAspie wrote: »

Yes, we should be able to negotiate a lower rent when we renew our contract.

on what basis?

This is the second time today I've heard this

savemoney

Would you pay more if Landlords mortgage went up

LittleMissAspie wrote: »

Yes, we should be able to negotiate a lower rent when we renew our contract.

Gorgeous_George

I calculate that your BTL mortgages total £1,040,000 and that is if your extra £1,300 is pre tax.

I assume that you are a higher rate taxpayer (40%) and that means, if the £1,300 is after tax, that you have BTL mortgage debt of £1,733,333.

A basic rate taxpayer would need a £1,300,000 of BTL mortgage to profit by £1,300 per month from a 1.5% cut.

With house prices falling at unprecedented rates, you may need that £1,300 to file for bankruptcy.

And I lilke BTL!

GG

Gorgeous_George

Rents are charged at the market rate or lower. If a LL charges higher then he will suffer long voids.

The market rate is a function of many factors with interest rates being just one of them. Some LLs will be highly geared and some of these will be on fixed rates and some on trackers/SVRs. Those on fixed rates will not see any benefit from recent rate reductions. Those on SVRs may see that their BTL mortgages do not fall in line with residential mortgage rates, especially if their LTV is high.

I think market rates will fall slightly - maybe by 10%. This is a very different view from the one I had a month or so ago. My change of opinion is based on the extraordinary MPC decision of 6 Nov 08.

GG

piglet74

you should have entitled the post......

"I dont mean to boast, but i think i will do it anyway"

LandlordLee

Old git - I bought in the last year. Why would i sell when i earn very good money from my rentals? if you read my post reply its 10%+ yield on each. I am not in it for the short term if you read my reply. Mortgaged up to the neck? Yes i have 85% mortgages but they offer me a return, so it doesn't matter.

In a normal area with standard rentals you may have falling prices.. This is because the investment does not offer a good return. For example a 2 bed flat bought for £180k - rental £750 -£800 pm = no profit. People were blinded by prices rises.

And littlemissaspie how will you negotiate a lower rent? Rental demand is high and not all landlords are saving money..

LandlordLee

Mortgages of £900,000 actually. I have a yield of around 11.33% over my portfolio. Ltd company which means tax is calculated a little differently to your way off the mark calculations George.

People need to understand not ALL areas are hit by massive reductions. It depends on the local economy of each town/city area. For example where i have invested no big reductions are being seen as they sell well due to the yields. But literally 5 miles away prices have reduced because the area is not where people want to rent.

And when people hit back saying the values are falling it doesn't make a difference to me.. I am not selling and rentals are strong. I have the investments now making money. If i had to start from today i wouldn't manage it with the LTV on BTL's required. I would rather have paid the price i have with 15% deposits than with prices a little lower and a 30% deposit.

Gorgeous_George

LandlordLee wrote: »

Mortgages of £900,000 actually. I have a yield of around 11.33% over my portfolio. Ltd company which means tax is calculated a little differently to your way off the mark calculations George.

In that case, 1.5% of £900,000 is £1,125 before tax (however it's calculated). To 'save' £1,300 per month before tax you need a cut of 1.73%.

House prices are falling. That is not disputable.

If your portfolio averages 80% LTV, you will lose £1,300 per month if house prices fall by 1.39% per year. There are not many experts that think prices will fall by less than 10 x that for at least the next two years. Put another way, you may gain £1,300 by interest rates being cut but house prices falling by 13.9% per year will see the value of your portfolio crash by £11,700 per month.

Make sure that you are on lifetime deals. You may not have an option of remortgaging.

Good luck!

GG