Buy to Let collapse - Now Chelsea Building Society

brit1234

Chelsea waive ERC on buy-to-let

Lee Jones - 16-Jan-2009 Chelsea Building Society is waiving its Early Redemption Charge on buy-to-let deals as it looks to reduce the size of its mortgage book.

The mutual has confirmed that if a better buy to let deal can be found, and the mortgage adheres to certain factors, Chelsea will waiver the ERC.This comes after Mortgage Express, the intermediary lender of Bradford & Bingley, which was one of the UK’s largest buy to let lenders, also revealed it was waiving the ERCs on its mortgages for the next seven months.

Chelsea had previously offered borrowers an ERC waiver where fixed borrowers, moving onto the Chelsea SVR, could find a better mortgage.
A spokeswoman for Chelsea says: “There have been circumstances where a buy to let loan has been allowed to leave. This is decided on a case-by-case basis and depends on a variety of factors."

Chelsea admits that this strategy may continue, if the circumstances are right, but would not pass on to other types of loan.

http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=179284&d=340&h=341&f=342

Yet another provider wanting to get rid of its toxic buy to let toxic debt. I believe that the weakness in buy to let will permit faster and bigger property falls.

Is there any one here still getting buy to let mortgages now (not re mortgages)?

I predict the demise of buy to let purchases will result in the failure of the big property builders especially as they are not dropping prices.

:eek::eek::eek::eek:

fatpig_2

How much more evidence does the government need before it outlaws the spivery of Buy to Let. It attracts nothing but liars, cheats, fraudsters - the most undesireable sorts in society

Geenie

Blimey, Buy to Let gets a hard time on here, for such a small proportion of the housing market!

PasturesNew

Geenie wrote: »

Blimey, Buy to Let gets a hard time on here, for such a small proportion of the housing market!

And on a forum about the war, how much of a mention would Hitler get?

ad9898_3

I'm all for anything that brings on the demise of BTL, in moderation it could have been seen as a 'service'. However it's just got totally out of hand, with the hoovering up of a huge amount of FTB'r housing stock.

If indeed it does all but disappear, we will also will see the 'lie' that Brown pedals about there being a housing shortage, there isn't, and never was, but when you have the likes of Bovey, The Wilsons and thousands more (albeit on a smaller scale) it gives the impression of a shortage.

econo_2

A few points. Chelsea have probably analyzed their inventory and seen negative equity looming on many outstanding loans. Terrified they've come up with this.

Furthermore, lack of mortgages available for just about everyone at the moment who is not in the top echelons of society can someone please tell me where all the people who rent at present from BTL owners are going to live? Oh, run down council estates. Any takers? Thought not.

Secondly, I love the way the building societies and banks now appear to be turning it into the man in the streets fault. "Oh, it wasn't us who lent to all and sundry to buy a house with no assessment of risk being done. Bad old man in the street. How dare you accept our loans and get us and yourself in this position," pathetic. Even more pathetic are those who are now trying to box up and put a ribbon on the minuscule UK BTL market as the reason the whole world economy has collapsed. Might be nice and easy to do, but sorry gentleman, it's complete garbage. The government is as much to blame here for letting consumers get addicted to cheap credit as the banks too.

It's like spiking the punch bowl at a party and blaming the guests for getting drunk.

What about a new thread Fatpig. I'll start with:

How much more evidence does the government need before it outlaws the spivery of buying a house without at least a 20% deposit regardless of its use. Otherwise it attracts nothing but liars, cheats, fraudsters - the most undesirable sorts in society who bought to use as family homes in the last 2 years so they could jump on the bandwagon along with everyone else?

baby_boomer

A bit of context and a bit of SchadenFreude.

Chelsea's scope for these loans in the eyes of the FSA will have been reduced by its "unfortunate" [stupid?] loss of £50 million of members' money in Iceland - which means its capital buffer against things going wrong has fallen.

When Chelsea took over the Catholic BS, I nearly choked when I read the blurb about how they shared similar values :rotfl:

The Catholic BS tried to help struggling people into the home-market.
Chelsea BS tried to help its directors to higher bonuses by gambling members' money on buy-toilet.

chucky

not sure if this is a collapse of BTL as the title says but full marks to Brit for effort.

that's excellent news for BTL landlords - they can move off an uncompetitve rate to a better one from another lender increasing profit.

Gorgeous_George

I'm with NatWest and don't have an ERC. Maybe they will offer me a few grand to move away from my lifetime tracker. I could be tempted to pay the mortgage back.

GG

stevetodd

Gorgeous_George wrote: »

I'm with NatWest and don't have an ERC. Maybe they will offer me a few grand to move away from my lifetime tracker. I could be tempted to pay the mortgage back.

GG

Similar situation for me with other lenders, they would have to offer me a huge bonus to get rid of me, it would take a lot more than a few grand though.

Kenny4315

Don't see why they'd want to shift off the quality clients. What's the point, you need to look to the solid clients, who have strong asset bases, equity, and liquidity, along with secure rents, to prop your own business if you a bank or BS.

BTL mortgages present as much risk as non BTL, there are plenty of FTB liars who have secured mortgages on the back of dodgy estimations of salaries, etc. On the other hand there are plenty of BTLers and normal buyers who have been sensible and the market risk will be the same. Probably less for the BTL, as he can selll the asset without losing his residence, so it is easier to release the asset & liability.