Buy-2-Let Mortgage Help!

RedfernProp

Hi,

I own 6 properties in the North East and looking to add more in the current climate.

Problem is, although my current portfolio all pays for itself and are on reducing LTV's (none higher than 60%), really struggling to find a competitive product in the market.

Due to the nature of what and where I buy, they're mostly 1 bed flats that are under the £50k mark and a lot of the high street lenders wont look at these properties, even with 30-40% deposits.

Those that will tend to charge ridiculous fees that I refuse to pay just to lend the money.

Does anyone know anywhere that specialises in lower value property in the B-2-L market? It's not that there's anything wrong with the flats targeted, they're at market rate.

Any help appreciated.

happybroker

30% to 40% deposits and high fees or rates are pretty much the norm in the btl sector unfortunately. Would love to tell you something different.

socrates

The ship has sailed!

RedfernProp

The ship may well have sailed, but for every muppet that got suckered into buying new build, off plan flats for way over the odds without even visiting the site(!) there are genuine B-2-L investors in for the long haul.

Accept fees and rates will always be high now, but the problem I have is that lenders don't seem interested in what they class as 'low value' property.

It's not that there's anything wrong with the properties, it's just that they're not at London/Edinburgh/South East inflated prices.

When the sums add up, e.g. rent more than covers mortgage plus other expenses and void periods are low, it's so frustrating when you can't borrow.

It's not always practical to pay cash

socrates

RedfernProp wrote: »

The ship may well have sailed, but for every muppet that got suckered into buying new build, off plan flats for way over the odds without even visiting the site(!) there are genuine B-2-L investors in for the long haul.

Accept fees and rates will always be high now, but the problem I have is that lenders don't seem interested in what they class as 'low value' property.

It's not that there's anything wrong with the properties, it's just that they're not at London/Edinburgh/South East inflated prices.

When the sums add up, e.g. rent more than covers mortgage plus other expenses and void periods are low, it's so frustrating when you can't borrow.

It's not always practical to pay cash

In your first post you say that you CAN borrow but you are not prepared to pay the ridiculous arrangement fees and rates.

Unfortunately the 'game' has changed.

Cash purchases seem to be the only way forward but as you know its virtually impossible to find 10% yields which is what the figures need to be for the deal to stack up.

Have you been to a good broker - I would assume you know one.

Other than that its comparing the extortionate fees and repayments with the reduction in prices over the last six months and comparative rents.

RomansProperties

If it helps I can give you the details of my broker?
I have not bought any property now for 6 months so no currently aware of the deals.
Although a lot less people offer buytolet mortgages now.

Could you not look at commercial mortgages?
I know Natwest and RBS are still doing these.

silvercar

Other option owuld be to use other assets as securities. Are all your BTL tiddlers? Could you take a residential mortgage on your main home to finance the BTLs.

happybroker

RomansProperties wrote: »

If it helps I can give you the details of my broker?
I have not bought any property now for 6 months so no currently aware of the deals.
Although a lot less people offer buytolet mortgages now.

Could you not look at commercial mortgages?
I know Natwest and RBS are still doing these.

Natwest & RBS are pretty much out of the market just now on this I'm afraid which is a shame as they were very good at it. It's only in the last couple of months that this has happened.

Lloyds TSB will look at a commercial proposition for btl but the yield has to be massive for them to entertain it so deals very, very rarely fit I'm afraid. The majority of commercial funding is pretty much closed to property based deals, even if it isn't your main source of income despite the quality of some of the propositions put in front of them.

jingle68

sorry to hijack this thread, my BTL mortgage is with Abbey,has come to end of 2yr 5.99% fixed rate and has reverted to Abbey SVR of 4.34%.
Should I leave it on this Abbey SVR rate for now or try to fix again?

thanks for any advice

happybroker

depends on loan amount, value, rent being achieved and your plans for the property really.

socrates

jingle68 wrote: »

sorry to hijack this thread, my BTL mortgage is with Abbey,has come to end of 2yr 5.99% fixed rate and has reverted to Abbey SVR of 4.34%.
Should I leave it on this Abbey SVR rate for now or try to fix again?

thanks for any advice

Personally I would leave it as is for the time being - its a fair rate for BTL (ignoring the unrealistic base rate)