BTL: "... a ticking time bomb."

chucky

Pobby wrote: »

Excuse me being a bit uninformed. If a buy-to-let investor bought at say £100k, comes to the end of a fix and the property is now worth £70k do they just get transferred to the svr or do they have to come up with extra cash to bolster up the equity. Daft question.

depends on what kind of loan they take out.

a standard BTL for example from Mortgage Express would switch to SVR.
a Commercial loan/facility would more than likely not, they would either be extended or re-financed. these are probably a minority in the market and would quite easily cover or suit a number of properties in a portfolio.

i've never had a commercial loan long enough or needed to re-finance but would like to know if any one has an experience of these.

botchjob

ad9898 wrote: »

I disagree, I think he was a very lucky speculator, just because someone is lucky, doesn't necessarily mean they are professional......... not by a long chalk.

Er, to own 8 buildings of multiple flats with no mortgages whatsoever does rather suggest he’s gone about his business in a professional manner. To be successful in business may require a bit of luck now and then but that’s not what makes a business successful. Credit where credit is due, even it’s with a boo-hiss landlord….

ukcarper

These BTL landlords are terrible it would be much better if there weren’t any. But then. who would we rent are houses from.

dopester

mitchaa, cop a load of this, seeing as you think C&G are lending money out more easily than other lenders.

We were re-mortgaging our property. Had done everything [wage slips, accounts, perfect credit record etc]. Even had our entire portfolio 'stress-tested' at 8% which we passed [that was a later hurdle they decided to add 6 weeks after we made the initial application]. Now after a valuation [which was 10k higher than what I had written] we have been rejected by the senior underwriter. My broker has managed to find out from someone inside its because we have a large portfolio and the bank [C&G] don't want the risk!!! They have advised that whatever we try and put in, they will find a way of rejecting us so give up now! I know I shouldn't be - but I am lost for words!

http://www.landlordzone.co.uk/forums/showthread.php?t=18811

IveSeenTheLight

PasturesNew wrote: »

I do know, because he told me his financial position once when he was round fixing stuff. His pension had gone completely to the wall and he bought 4 BTLs.... so I'd guess he was maxing out when he did it.


I was basing my figures on what he paid, what two sold for last year, what one has gone onto the market for last month. So the figures are correct for this actual flat.

So you say "IF he had a 90% mortgage" and you'd "guess he was maxed out" yet he disclosed his full financial position once when he was fixing stuff.

If he did you wouldn't be guessing and pondering if as to his deposit

The two don't add up sorry

dopester

ukcarper wrote: »

These BTL landlords are terrible it would be much better if there weren’t any. But then. who would we rent are houses from.

If they had been limited in their activities in the first place, house values wouldn't have been pushed up to extreme levels, and more people could have bought.

Landlords were competing amongst themselves, borrowing more money and pushing values ever higher, year-on-year, and some landlords amassing staggering numbers of properties.

Including brain-dead middle-age men and women, with no real intelligence but having 10 or more homes via borrowed money. MEW, pay-more for another property, and repeat.

They are now finally serving some sort of purpose, as renters can rent as capital values crash hard.

ukcarper

dopester wrote: »

If they had been limited in their activities in the first place, house values wouldn't have been pushed up to extreme levels, and more people could have bought.

Landlords were competing amongst themselves, borrowing more money and pushing values ever higher, year-on-year, and some landlords amassing staggering numbers of properties.

Including brain-dead middle-age men and women, with no real intelligence but having 10 or more homes via borrowed money. MEW, pay-more for another property, and repeat.

They are now finally serving some sort of purpose, as renters can rent as capital values crash hard.

In the early seventies you couldn’t find a property to rent yet house prices went up. I’m sure BTL had an effect on pushing property prices up especially city centre flats but I don’t think that if there weren’t any BTLs house prices would have been as cheap as a lot of people on here wish they were.

dopester

Alan_M wrote: »

A builder freind of mine started his "BTL Pension" back in the early 90's just after the last great pop. It wasn't exactly fashionable back then and the best deals he could get were 10 year commercial mortgages which is what he did.

He now owns 15 buildings (some of which are 8 or more flats)....and has no mortgages at all.

He will be wholly unaffected by any of this crash......all his properties are occupied and these aren't exactly what you'd consider "Executive apartments".....

He's what I consider a professional landlord or BTL landlord.

He still will be heavily affected by the crash. The capital values will have fallen for a start from peak - and have a long way to go. Not "executive apartments?" Don't rely on housing benefits to keep paying up lots of money as values continue to fall.

Where are these buildings? Some places might be near abandoned as big employers close down and opportunities are limited and government isn't paying up money to your landlord hero.

geoffky

Alan_M wrote: »

A builder freind of mine started his "BTL Pension" back in the early 90's just after the last great pop. It wasn't exactly fashionable back then and the best deals he could get were 10 year commercial mortgages which is what he did.

He now owns 15 buildings (some of which are 8 or more flats)....and has no mortgages at all.

He will be wholly unaffected by any of this crash......all his properties are occupied and these aren't exactly what you'd consider "Executive apartments".....

He's what I consider a professional landlord or BTL landlord.

I once heard a cab driver talking about the stock market, He had a stock broker in the back of cab previous fare t me...the stock broker said "when members of the general public are piling into the stock market, it's time for the professionals to get out"...same applied to BTL.

Many professionals started offloading a couple of years back.

I somewhat understand the dislike of amatuer BTL landlord in the context of these forums, but I feel the number that will truly be effected is overstated and certainly not a catastrophic amount in it's own right, really its only those that bought near peak highly levarged and relying on HPi that will suffer.

As a percentage of properties bought with mortgages I'd be surprised if that was much more than 2-3%...which means 97-98% should be just fine.

Sure I'm all for house prices adjusting to a sensible level, but I feel the bias given towards non professional BTL's is overstated in the grand scheme of things

alan m how it going m8.. i think you will find that if you ask most estate agent they will tell you since 2005 ftb have been very very thin on the ground due to affordability costs (hence the term the market run out of mugs) and that it was btl buyers that was holding the market up. so i think btl was a very major player in gthe market in the last few years of the bubble..

mewbie_2

ukcarper wrote: »

These BTL landlords are terrible it would be much better if there weren’t any. But then. who would we rent are houses from.

Same people you rented from pre 2001. Old style landlords, who bought with inherited money, or had property kicking around for some reason. It's a living but not a great one.

BTL mania from 2001 onwards, everyone was dreaming of it, or doing it. Forget yield, some of these properties weren't even rented out. No need with 20% HPI. There are a LOT of these 'amateur' landlords who have yet to unwind their 'portfolios', or go bankrupt.