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Debate House Prices
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Lenders target BTL ...
*MF*
Posts: 3,113 Forumite
Lenders target BTL
- was the headline in the FT
- but is it only the high value sector that may be targetted??
- or will this become more widespread?
Extracts:
Wealthy borrowers are being given as little as one month’s notice to pay £1m off their mortgages, as banks take ever more dramatic steps to cope with the housing downturn.
Charles McDowell, a prime property consultant in London, told the Financial Times that lenders had asked some of his clients with large buy-to-let property portfolios to come up with more cash after falling prices slashed the level of their equity.
Savills Private Finance, the mortgage broker, has seen evidence of banks unexpectedly demanding cash from clients, typically those with high-value, highly geared property portfolios.
Melanie Bien, director of Savills, said this was a new trend as the buy-to-let market was not established in the previous market downturn in the early 1990s. “It is really a feature of the buy-to-let boom and credit crunch.”
The banks’ requests have come as lenders start exercising little-known clauses that allow them to demand additional funds if the owner’s equity shrinks in relation to the value of the property.
Plummeting property prices mean landlords who paid little notice to these hidden clauses when the market was booming are falling foul of the rules.
Source:
http://www.ft.com/cms/s/2/cdc24a48-2078-11de-b930-00144feabdc0.html
- was the headline in the FT
- but is it only the high value sector that may be targetted??
- or will this become more widespread?
Extracts:
Wealthy borrowers are being given as little as one month’s notice to pay £1m off their mortgages, as banks take ever more dramatic steps to cope with the housing downturn.
Charles McDowell, a prime property consultant in London, told the Financial Times that lenders had asked some of his clients with large buy-to-let property portfolios to come up with more cash after falling prices slashed the level of their equity.
Savills Private Finance, the mortgage broker, has seen evidence of banks unexpectedly demanding cash from clients, typically those with high-value, highly geared property portfolios.
Melanie Bien, director of Savills, said this was a new trend as the buy-to-let market was not established in the previous market downturn in the early 1990s. “It is really a feature of the buy-to-let boom and credit crunch.”
The banks’ requests have come as lenders start exercising little-known clauses that allow them to demand additional funds if the owner’s equity shrinks in relation to the value of the property.
Plummeting property prices mean landlords who paid little notice to these hidden clauses when the market was booming are falling foul of the rules.
Source:
http://www.ft.com/cms/s/2/cdc24a48-2078-11de-b930-00144feabdc0.html
If many little people, in many little places, do many little things,
they can change the face of the world.
- African proverb -
they can change the face of the world.
- African proverb -
0
Comments
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Great news. Squeeze the chancers until the pips squeak.Krusty & Phil Madoff, 1990 - 2007:
"Buy now because house prices only ever go UP, UP, UP."0 -
All part of Gordons plan to drive down house prices further.Not Again0
-
Mostly, the terms they are using only exists in large BTL contracts, an ordinary investor probably isn't going to be affected. However, there is an ongoing tendency to tighten lending and reduce overdrafts / credit card lines to small businesspeople including landlords.“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
Pointless, because enforcing it could cost them more than leaving well alone. If an investor is servicing his debt and looks likely to continue to do so, then why force him to sell and accept a loss now? It would only be worthwhile for them if they were sure there was equity enough in the properties to recover their loans.0
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Pointless, because enforcing it could cost them more than leaving well alone. If an investor is servicing his debt and looks likely to continue to do so, then why force him to sell and accept a loss now? It would only be worthwhile for them if they were sure there was equity enough in the properties to recover their loans.
What you describe is exactly what is being enforced on thousands of viable, profitable businesses over the entire country.
I agree it doesn't make sense.....but when exactly did "Sense" govern an edict from above in Banking?
We are paying our facilites, always have done, never missed a payment, if we're left to our own devices we can continue to do so.....but out bank LloydsTSB are in a state of panic and want all their money now.
The irony of that is, they are likely to bust the business and not get paid...but leave us alone in the situation we are and have been for the past two years they get paid......
You're right it makes no sense at all.0 -
They probably have realised that prices are only going to fall further, and may not reach the current levels for another 10 years.
Therefore, if they suspect anyone of being unable to service their debt, or anyone of high risk, they would prefer to repo, and sell now for only 20% off peak.0 -
1984ReturnsForReal wrote: »All part of Gordons plan to drive down house prices further.
What on earth are you talking about?
Do you know anything about current events?0 -
themanbearpig wrote: »What on earth are you talking about?
Do you know anything about current events?
If you dont know try researching who is foreclosing.
&
YepNot Again0 -
1984ReturnsForReal wrote: »All part of Gordons plan to drive down house prices further.
If it is crash Gorons plan to drive down prices then why all the delaying tactics?
Crash Gordon is making it last a lot longer than it has to, making it far worse.
The sooner house prices get back to where the market wants them to be the better, the longer it takes the deeper the overshoot.0 -
If it is crash Gorons plan to drive down prices then why all the delaying tactics?
Crash Gordon is making it last a lot longer than it has to, making it far worse.
The sooner house prices get back to where the market wants them to be the better, the longer it takes the deeper the overshoot.
Cheap Social Housing Stock at the bottom.Not Again0
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