C & G tighten BTL lending criteria.

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Not a massive story as they don't have much BTL business, however it could be the thin end of the wedge. What I found interesting is the eye-watering mortgage deals at the bottom of the page. The best rate being 3.89%, fixed only for a year with a 3.5% fee !! on a 75% LTV.

Are these typical BTL deals ?, if so, these deals are likely to be the best they will ever be with the base rate so low. With capital values falling and unemployment rising causing tenants to miss rental payments, who'd get into BTL ??, I'd sooner have my money in the bank earning no interest, at least this time next year I'd still have the same money I put in.

C&G restricts its lending criteria, but who will be next?

It's no secret that buy-to-let landlords are having a tough time with tenant arrears rising, property prices falling and growing layers of red tape making investing in property something of a headache for many.
What they certainly don't need after 18 months of tightening criteria, is for the lending rules to get even tougher. But this has happened following changes to Cheltenham & Gloucester's buy-to-let criteria last week.
Not only are the changes themselves a setback for landlords, they have also raised fears that other lenders will start to squeeze lending policies too.

http://www.lovemoney.com/news/mortgages/buytolet-tightens-further-3363.aspx

1984ReturnsForReal_2

C&G are way over exposed.

VfM4meplse

1984ReturnsForReal wrote: »

C&G are way over exposed.

Meaning....? Another one for AD to rescue? Might that mean reasonable rates in future?

1984ReturnsForReal_2

VfM4meplse wrote: »

Meaning....? Another one for AD to rescue? Might that mean reasonable rates in future?

Owned by Lloyds TSB already

Rick62

ad9898 wrote: »

Not a massive story as they don't have much BTL business

They have masses of BTL business. C&G, BM Solutions, Bank of Scotland, Lloyds, TMB, you do a search for BTL mortgages and the Lloyds group is now about two thirds the results.

Most BTL landlaods are fine now due to the low rates, once rates go up they will have massive problems getting decent mortgage products.

The best rates right now are from the commercial arms of Lloyds, RBS etc, however they require large income covers, so typically you can only borrow about 40% of the property value.

Thrugelmir

ad9898 wrote: »

Are these typical BTL deals ?, if so, these deals are likely to be the best they will ever be with the base rate so low. With capital values falling and unemployment rising causing tenants to miss rental payments, who'd get into BTL ??, I'd sooner have my money in the bank earning no interest, at least this time next year I'd still have the same money I put in.

BTL is like any other business. It needs to be run on a sound commercial basis. Comparing BTL to cash on deposit is very misleading.

Reading the article you wonder if LloydsHBOS is getting its act together. As across the group its obviously got exposure to individuals with multiple properties.

chucky

Professional landlords are beginning to expand their property portfolios again as they make the most of house price falls, research has shown.

"The data shows that there are bargains to be had in the property market at the moment for those with a keen eye. This substantiates our belief that buy-to-let remains a viable long-term investment vehicle.

"And while in general it appears that there is an oversupply of rental properties to let, this does not mean that in certain areas of the country there isn't a shortage of property."

Rental returns remained largely unchanged during the three months to mid-March at 4.9pc on flats and 4.8pc on houses, the survey found.

http://www.telegraph.co.uk/finance/personalfinance/investing/5075392/Buy-to-let-investors-start-buying-again.html

Thrugelmir

By professional landlord I assume it refers to those that have capital available.

Rental returns remained largely unchanged during the three months to mid-March at 4.9pc on flats and 4.8pc on houses, the survey found.
Mr Potter said: "With interest rates at an all-time low the figures speak for themselves. Flats clearly offer a sound return on investment against saving rates, particularly if you're not looking for quick capital uplift.

As if these market yields are correct those who are leveraged are in for difficult times ahead.

ad9898_3

chucky wrote: »

http://www.telegraph.co.uk/finance/personalfinance/investing/5075392/Buy-to-let-investors-start-buying-again.html

For pro's like yourself chucky;), I'm sure there is no problem, but there are plenty of knob jockeys out there who first dabled in the market from 2006 onwards, most of these are doomed.

chucky

ad9898 wrote: »

For pro's like yourself chucky;), I'm sure there is no problem, but there are plenty of knob jockeys out there who first dabled in the market from 2006 onwards, most of these are doomed.

pros?? what certification do you need to be professional
professional landlord is so over used by the media.

anyone leveraged too far will struggle - i'm not convinced by the volume though, as the number of defaults haven't really materialised yet and we're 18 months into a credit crunch i know rates have helped here but if you're ovr-levaraged you still need to be service that debt and defaults aren't widespread (yet).

chucky

Thrugelmir wrote: »

By professional landlord I assume it refers to those that have capital available.




As if these market yields are correct those who are leveraged are in for difficult times ahead.

to be fair to that comment about the yield - i wouldn't mind having a 4.8% yield on any investment during a recession.

people and landlords need to realise that there are good and better times with any investment. now isn't a good time.