A Boost in Buy to Let Property

Conrad

RomansProperties wrote: »

. Investors need to be looking for 8%-10%

Exactly my sentiment.
I have to say though, few 'investors' share this view and I still; constantly have clients that have not an inkling of yield, and tedntowrds the view - it's just a long term pension thing, sort of

Thrugelmir

IveSeenTheLight wrote: »

Some reposession stats for Q4
http://www.cml.org.uk/cml/media/press/2116

BTL Repossession in Q4 = 1,300
This equates to 0.11% of all BTL's and 12.5% of all properties reposessed

Also interesting to note that BTL lending shrank from 12.3% of all total lending in 2007 to 10.6% in 2008, meaning BTL's mortgages are being paid down at a faster rate than OO mortgages.

With these facts, its hard to understand why people state on here that BTL is in trouble when its only 10% of mortgages, the other 90% are OO mortgages

Some further information.

Many buy-to-let borrowers will now be benefiting from significantly lower mortgage costs than when they first took out their loan. With tenant demand remaining strong in most areas, many landlords will therefore be experiencing an improvement in their net income.
However, at the end of 2008, 2.32% of buy-to-let mortgages were over 3 months in arrears (without a receiver of rent in place), while a further 0.23% were over 3 months in arrears with a receiver of rent in place. The comparable arrears rate for the wider market (including buy to let) was 1.88%. There are several factors likely to have influenced this arrears rate, including:
• Interest-only mortgages - in contrast to owner-occupiers, most buy-to-let lending is interest-only, and in a falling interest rate environment this type of borrowing shows up as a greater number of months in arrears than equivalent capital-repayment borrowing;
• Fraud - some buy-to-let fraud involved over-valuation to achieve a larger loan than the sale price of the property, with no rent or mortgage ever being paid;
• Payment problems on the part of landlords - landlords are not immune from wider economic
problems, and some are diverting the rental income received from tenants to servicing other
commitments (perhaps their own owner-occupier mortgage) instead of paying their buy-to-let
mortgage; and
• Voids - there is an over-supply of rental property in some locations, so some landlords will not be receiving a rental income on empty properties in current market conditions, and may be unable to pay their mortgage as a result.

It's not possible to compare directly Residential and BTL repossessions as with commercial loans a Receiver of Rent (RoR) can be appointed to collect rents directly from tenants (though this is in effect the same as a repossession).


To expand on the stats you stated from the CML.

BTL Mortgages over 3 months in arrears :-
2007 - 7,500 - 0.73% of all mortgages

2008 - 26,800 - 2.82% of all mortgages

BTL Repossesions
2007 - 2,000 - 7.7% of all repossessions

2008 - 4,000 - 10% of all repossessions

In fact in last quarter of 2008 BTL repo's accounted for 12.5% of total.


On basis that property market has still not reached bottom, with possibly another 1 million people on the dole. The overall trend shows a detoriating situation. Home owners can sit tight and weather the storm. BTL investors are exposed to both falling prices and rising interest rates.


Property investment is like any other business. Commercially run fine. Currently the property market though is infested with "get rich individuals" who have no comprehension of risk and lack business sense.

IveSeenTheLight

I dont discount the above, I was pointing out your statement that reposessions rapidly rose in Q4 was factually incorrect when the reposessions reduced in total from 11,100 in Q3 to 10,400 in Q4

Originally Posted by Thrugelmir
Repossessions in the last quarter for 2008 rose sharply for BTL borrowers as more tenants were unable to afford their rent. None of which bodes well for hitting the bottom.

Thrugelmir

IveSeenTheLight wrote: »

I dont discount the above, I was pointing out your statement that reposessions rapidly rose in Q4 was factually incorrect when the reposessions reduced in total from 11,100 in Q3 to 10,400 in Q4
[/i]

Remember though the NR changed its stance on respossion under the Governments influence in the autumn. Also with Xmas break courts would have handled less cases. So difficult to compare qtr to qtr figures.

IveSeenTheLight

Thrugelmir wrote: »

Remember though the NR changed its stance on respossion under the Governments influence in the autumn. Also with Xmas break courts would have handled less cases. So difficult to compare qtr to qtr figures.

:rotfl: :rotfl: :rotfl:
then why state that it rapidly rose in Q4, unless of course you thought it was true without checking the facts, wanted / wished it to be true and hoped nobody else chacked on the facts or wanted to create a rumour that spreads out to be taken as fact although factually untrue

Thrugelmir

IveSeenTheLight wrote: »

:rotfl: :rotfl: :rotfl:
then why state that it rapidly rose in Q4, unless of course you thought it was true without checking the facts, wanted / wished it to be true and hoped nobody else chacked on the facts or wanted to create a rumour that spreads out to be taken as fact although factually untrue

The BTL repossesion numbers are those quoted by the CML. Whilst overall repossesions dropped BTL's increased.

Total facts. People can decide for themselves how to read this data.

housesitter

Can one obtain a 25yr fixed rate on a BTL mortgage?

Or is the belief that interest rates are not going to rise above 1% in the next decade or so?

IveSeenTheLight

Thrugelmir wrote: »

The BTL repossesion numbers are those quoted by the CML. Whilst overall repossesions dropped BTL's increased.

Total facts. People can decide for themselves how to read this data.

I don't believe you had any facts until I linked them.

The CML are showing 0.11% of all BTL properties were reposessed in Q4
I'd love you to show me the percentage in Q3 to justify such a rapid rise

Thrugelmir

IveSeenTheLight wrote: »

I don't believe you had any facts until I linked them.

The CML are showing 0.11% of all BTL properties were reposessed in Q4
I'd love you to show me the percentage in Q3 to justify such a rapid rise

http://www.politics.co.uk/opinion-formers/press-releases/economy-and-finance/cml-buy-to-let-lending-in-the-fourth-quarter-of-2008-$1271095$364298.htm

As you appear to do little more than read headlines hope this helps.

IveSeenTheLight

Thrugelmir wrote: »

http://www.politics.co.uk/opinion-formers/press-releases/economy-and-finance/cml-buy-to-let-lending-in-the-fourth-quarter-of-2008-$1271095$364298.htm

As you appear to do little more than read headlines hope this helps.

:rotfl: You say I only read headlins and then include a link to a website that quotes the info I gave you from the source 13 posts ago

I will give you that it would appear (without knowing the Q3 data) that the number of BTL reposessions has increased.
To 1300 out of 1.182 million

If we estimate that the 2700 reposessions in the first three quarters were 700, 900 & 1,100 (produces a nice linear line ) then your rapidly increasing BTL reposessions went from 0.093% to 0.11%

If you are getting your knickers in a twist about less than 0.02%, then my god, you are going to be strung up by your knackers with all the larger data available.