Buy to Let landlords face extra Margin Call payments

Generali

Gorgeous_George wrote: »

I know but there's no harm in charging a little more rent to cover the margin call risk.

GG

In the short term, rents will reflect supply of and demand for rental properties. As the property market is illiquid supply and demand are unable to adjust rapidly, a problem made worse in the UK by idiotic planning policies meaning it's very hard to build places people want to live in where they want to live!

Longer term, if costs and perceived risk to BTL LLs increases, BTLers will want a larger rent on any given property. Generally, I would expect that to happen through reduced supply and reduced demand with supply falling by more than demand. That means more expensive rents and less choice for tenants and cheaper houses for buyers.

Buyers and remaining BTLers win. Tenants, sellers and the marginal BTLers that were forced out of business lose.

shaven-monkey

ad44downey wrote: »

Pimps and drug dealers make profits too. That doesn't mean they're doing right though

Very few of them pay tax directly other than in money laundering costs.

Money_Saving_Dude

Once upon a time there was something called social housing, that was provided via the public purse. It seemed to go out of fashion in the 80s. The disgraceful policies that prevented the money from the sale of council houses being used to fund replacements has meant that the rented sector is more and more provided by the private sector, and BTL is a major part of this. Further BTL have reduced the available housing stock available for normal purchase, thus pushing up prices to the ridiculous levels we have today.

So what should be done? Well the public purse needs to significantly increase the social housing stock. This will have the effect of reducing rents, making it much more affordable for most people (and obviously the lower paid).

Whilst it is very satisfying seeing the BTL brigade suffering as they undoubtedly are, this does increase the risk that their tenants may be thrown out as the landlords default on their payments. This is not America (thank god!). The state must provide such a basic need so that no one is potentially left homeless, and forced to doss on the floors of friends or family.

There will be another election in the near future. I'm keeping my fingers crossed.

Generali

Money_Saving_Dude wrote: »

Once upon a time there was something called social housing, that was provided via the public purse. It seemed to go out of fashion in the 80s. The disgraceful policies that prevented the money from the sale of council houses being used to fund replacements has meant that the rented sector is more and more provided by the private sector, and BTL is a major part of this. Further BTL have reduced the available housing stock available for normal purchase, thus pushing up prices to the ridiculous levels we have today.

So what should be done? Well the public purse needs to significantly increase the social housing stock. This will have the effect of reducing rents, making it much more affordable for most people (and obviously the lower paid).

Whilst it is very satisfying seeing the BTL brigade suffering as they undoubtedly are, this does increase the risk that their tenants may be thrown out as the landlords default on their payments. This is not America (thank god!). The state must provide such a basic need so that no one is potentially left homeless, and forced to doss on the floors of friends or family.

There will be another election in the near future. I'm keeping my fingers crossed.

What do you propose shouldn't be paid for instead? The UK Government is spending massively beyond its means already.

IveSeenTheLight

brit1234 wrote: »

That was Abbey not HBOS and Bradford & Bingley. Don't let the facts get in the way of your reply.

It is also specifically for Buy to Let rather than residential. Margin Calls are common in the business world and buy to let is a business after all.

There are no margin calls in either of my BTL mortgages.
I've checked with the lenders previously when this was brought up months ago, maybe even about a year ago.

People were confusing margin calls, with the effects during re-mortgaging if the equity was insufficient.
Short answer was that they could stay on the SVR instead of re-mortgaging.
Definately not a margin call

silvercar

IveSeenTheLight wrote: »

There are no margin calls in either of my BTL mortgages.
I've checked with the lenders previously when this was brought up months ago, maybe even about a year ago.

People were confusing margin calls, with the effects during re-mortgaging if the equity was insufficient.
Short answer was that they could stay on the SVR instead of re-mortgaging.
Definately not a margin call

No margin call on mine either. This has been pointed out before, but why let the truth get in the way of a good story?

Money_Saving_Dude

Generali wrote: »

What do you propose shouldn't be paid for instead? The UK Government is spending massively beyond its means already.

Yes, I would like it to stop spending on the wars in Iraq and Afghanistan. I would like it not to consider a third Heathrow runway, but actively encourage businesses to move away from the South East (and so generate more economic activity in other parts of the UK). I would like them to change the tax system so the bottom end pay less tax, and offset that by increasing tax on the middle and higher earners.

Yes, yes, yes. But housing is a basic human need. It must not be made into another market so a few can profit at the expense of the rest. For those that don't want to, or can't afford to buy their own home, they must still have a right to affordable rented housing.

It was 90 years ago, 90 years!, when the mantra was homes fit for heroes. 90 years, and yet we still haven't managed to resolve the housing need.

We have the red herring of the green belt ('oh, you can't build on there, mate') and a massive pent-up demand for housing. If you think the green belt is so under threat as a former pilot I recommend you get into a light aircraft and have a 'tour' round your local area. You will see there is rather a lot of it, and any large-scale building will only scratch the surface. Google Earth would be a second best option.

As I said in my previous post the only thing I'm enjoying about the current downturn is seeing the greedy, selfish, get-rich-quick BTL brigade now thrashing around in water that's too deep for them.

mysterybadger

There is a possiblity that lenders could make margin calls.

Is there? No-one ever seems to have found such a claus in any BTL agreement. This is something of an urbanmyth, methingks.

IveSeenTheLight

mysterybadger wrote: »

There is a possiblity that lenders could make margin calls.

Is there? No-one ever seems to have found such a claus in any BTL agreement. This is something of an urbanmyth, methingks.

Maybe you should have let the thread drop down the list instead of re-highlighting what was already dismissed and the last post was over a month ago

Thrugelmir

Alternatively lenders could raise interest rates to reflect increased risk. More than one way of skinning a cat.