BTL LL's hit harder...

mvengemvenge

http://news.bbc.co.uk/1/hi/business/8092407.stm



Buy-to-let landlords are losing their properties at over three times the rate of other homeowners, research shows.
Council of Mortgage Lenders figures show 1,700 buy-to-let properties were repossessed by lenders in the first three months of this year.
But landlords lost 4,100 properties when cases of lenders appointing a receiver of rent are included.
A receiver of rent collects rent on behalf of a lender when the landlord defaults on the mortgage.
The recession is also making buy-to-let mortgages much harder to come by.
Popular process
As the downturn bites, lenders are appointing more receivers of rent.
In this process, a tenant is allowed to remain in a property instead of losing their home.
It also gives the lender time to decide what to do with the property, whilst offsetting the mortgage interest against the rent. That in turn can help reduce the arrears faced by the landlord.
In the first three months of 2008, there were just 300 receivers of rent appointed, compared with 900 repossessions.
In the first three months of this year 2,400 receivers of rent were appointed - an eight fold increase and far more than the number of buy-to-let repossessions.

City centre flats were popular among buy-to-let investors
This mean that 0.35% of buy-to-let properties were taken back by lenders - more than three times the
rate in the owner occupier markets where 0.11% of mortgaged properties were lost.
Many landlords got into trouble after paying too much for buy-to-let flats.
Estate agents talk of investors buying places which they hadn't seen, or which hadn't been built yet in a desperate race for property riches.
But for many that race has been well and truly lost.
Rents have often not lived up to expectations, and landlords have struggled to pay the mortgage.
And with falling house prices - which have often hit city centre flats especially hard - many could not afford to sell either.
Lenders get tougher
The situation has been made more difficult by lenders getting tougher over mortgages, with buy-to-let loans particularly badly affected.
Figures from the financial comparison company, Moneyfacts, show at the peak of the boom in September 2007 there were 3,662 different buy to let mortgages available.
Last month there were just 218 - a fall of 94%.
And those mortgages that are available need bigger deposits.
At the beginning of last year it was easy to get a buy to let mortgage with a 15% deposit. Now borrowers need a 25% deposit to have any chance.
All of this is hitting the number of buy-to- let mortgages taken out. In the first three months of this year there were 22,400 new buy to let mortgages.
Even if the decline halted and each subsequent quarter were the same that would mean a total of 89,600 new buy to let mortgages being taken out in 2009.
Compare that with the height of the boom two years ago - when 346,000 buy to let mortgages were snapped up in just twelve months.

chucknorris

I just watched this on the news, this is more or less about fools who didn't know what they were doing and without a HPI environment were doomed to fail. IMO opinion they would have failed eventually at whatever business they entered into anyway

brit1234

"buy-to-let properties were taken back by lenders - more than three times the rate in the owner occupier markets"

Well as a first time buyer I shed no tears. Over the last 5-6 years I have gone looking for a home to find the deveopements have been bought up by investors and priced me out of the market.

Remember property prices can only go up said the estate agent :rotfl:.

chucky

brit1234 wrote: »

"buy-to-let properties were taken back by lenders - more than three times the rate in the owner occupier markets"

Well as a first time buyer I shed no tears. Over the last 5-6 years I have gone looking for a home to find the deveopements have been bought up by investors and priced me out of the market.

Remember property prices can only go up said the estate agent :rotfl:.

to be fair Brit and i don't think that you're being totally honest here.
your accomodation is very, very cheap as you're in police quarters so you've taken advantage of this situation. if you had been to pocket HPI i'm sure that you would be a bit more humble.

many people and wannabe home owners aren't and won't be as lucky as you to have the opportunity to be able to have saved a large deposit and be able to go and buy a home as you have.

ad44downey

Great news. The buy-to-let rats are fleeing the sinking ship at an alarming rate .They don't like it up 'em.

Harry_Powell

I won't be shedding tears for BTLers either. Hopefully some of em will go bust in my area and we'll be able to pick up a bargain.

chucky

Harry_Powell wrote: »

I won't be shedding tears for BTLers either. Hopefully some of em will go bust in my area and we'll be able to pick up a bargain.

i do understand what you're saying but if you're expecting to pick up a cheap BTL don't forget the issues that come with it and tenants being evicted and thrown out of their home.

so that you know - i have a few BTL's and am don't have issues with repayments, tenants, over-leveraging etc... i'm saying that before anyone has a go

ad44downey

Hopefully the government will introduce a proper tax regime and even more of the rats would be forced to jump overboard.

ad9898_3

chucky wrote: »

i do understand what you're saying but if you're expecting to pick up a cheap BTL don't forget the issues that come with it and tenants being evicted and thrown out of their home.

I'm not sure totally of the validity of this argument, granted, a significant number of people like to to rent or have little choice but to rent, however I would hazard a guess a significant number of people wanted to buy but have found BTL'rs hoovering up FTB'r properties since 2001, forcing prices up and pricing them out.

And lets not forget, I would imagine 90% of BTL landlords were able to buy portfolios by buying cheap properties in the past and using HPI to mew. All that is different now is many people just want to buy a home for themselves when prices are cheap, if this is at the expense of some LL's, so be it, when the LL's bought there first properties they were doing it at the expense of the FTB'r, or even repo'd OO's at auction.

Swings and roundabouts, what goes around comes around I guess.

Harry_Powell

chucky wrote: »

i do understand what you're saying but if you're expecting to pick up a cheap BTL don't forget the issues that come with it and tenants being evicted and thrown out of their home.

so that you know - i have a few BTL's and am don't have issues with repayments, tenants, over-leveraging etc... i'm saying that before anyone has a go

If they were decent landlords then they wouldn't be going out of business. I'd hazard a guess that the ones who are going bust are the ones who cant keep tenants for any length of time because they so inept. Reposession takes a while and the tenants would be given plenty of notice to get a new place. Some might even be quite please to get out of a AST early without penalty if the landlord is so shoddy. They're not getting "thrown out of their home", because it was never their home in the first place.

lemonjelly

ad9898 wrote: »

I'm not sure totally of the validity of this argument, granted, a significant number of people like to to rent or have little choice but to rent, however I would hazard a guess a significant number of people wanted to buy but have found BTL'rs hoovering up FTB'r properties since 2001, forcing prices up and pricing them out.

And lets not forget, I would imagine 90% of BTL landlords were able to buy portfolios by buying cheap properties in the past and using HPI to mew. All that is different now is many people just want to buy a home for themselves when prices are cheap, if this is at the expense of some LL's, so be it, when the LL's bought there first properties they were doing it at the expense of the FTB'r, or even repo'd OO's at auction.

Swings and roundabouts, what goes around comes around I guess.

Ad I do see a lot of sense in a lot of what you say, but I think there are too many assumptions here. I also think your assertion about "90%" is probably too high.

I don't doubt it has happened, but not to the extent you assert.

I actually think there are probably quite a lot of people who have bought one or two flats or similar, secured on the home they occupy, as pension pots, who have been caught out by this.

I'd be very intruiged to know what percentage of the 4100 were these horrible town centre flats.