Buy to Let Mortgage Mis-selling??? Help please.

shazshazc

Hi, I took on a Buy to Let mortgage in 2007 putting down a 15% deposit. I have now long since gone back onto standard variable interest rate. When I approached my bank about possible product change, they advised they no longer do BTL's so I would need to remain on the standard variable rate. When I enquired elsewhere with a regard to move the mortgage to a more competitive rate, all other lenders seem to want extra deposit money because their BTL's now have a much higher deposit requirement than my original 15%.
I feel I have been mis-sold my BTL. My lender has ceased to offer such products obviously realising they are toxic so left me with 3 options: Try selling in a depreciated market, stay with them and forever pay SVR until they can feel safe offer something else or find a lot of money to move to another lender - money I do not have. These are not options and I feel I have been trapped. Has anyone got any thoughts on this?
All help appreciated. Thanks

holly_hobby

Firstly Buy To Let mortgages are generally not regulated. (I say generally - with the only exception being if the property was to be let to an immediate family member or intended to be occupied by the borrower at some stage - with disclosure by the borrower of such arrangements at application stage).

Secondly, even if regulated, the lender can not be blamed for amendments to their own and general market lending practices (max LTVs), as a result of subsequent changes in the market since you made your purchase in 2007.

FYI - there are BTL mortgages at 85% with Kensington (min earned income 30k) - fees on the high side, and there are other fee free BTL remortgage deals about (albeit not at 85% lending if this remains your LTV since purchase in 2007, due to a static market).

I would suggest there is no merit in any complaint, and that you instead wisely spend your time with a whole of market broker, in sourcing the most suitable BTL lender and product available that meets your specific requirements.

Hope this helps

Holly

dunstonh

I feel I have been mis-sold my BTL.

Nothing you have said indicates and sort of mis-sale.

I feel I have been trapped. Has anyone got any thoughts on this?

You went into a commercial arrangement with a view to turning a profit. As a commercial arrangement, it is your responsibility to make the commercial decisions and seek advice where you do not know what you are doing. Typically, from a solicitor or some accountants or professional business advice advisers.

Any commercial arrangement can go bad and there is no-one else to blame for that other than yourself. It is part of the risk you accept when you enter such a transaction.

The other thing is that a mortgaged buy to let is typically a high risk transaction that is meant to run over 10-20-30 years or so. You have only had it 4 years.

To be honest, it sounds like you were unprepared and didnt seek the advice you needed and didnt have sufficient capital behind you. None of those things can be blamed on anyone else. Even if it could, buy to lets are unregulated (as its a commercial arrangement) and therefore you cannot complain about mis-sale even if you did have someone to blame.

shazshazc

Holly - thank you for your help.
dunstonh - Thank you for the frank reply. You are correct, I was obviously underprepared, didn't do my research, didn't fully understand what I was getting myself into and didn't have sufficient capital behind me. There was a time where BTL's were the fashion - an alternative to pensions and sold as such. I was stupid. You appear to be in the Financial Industry and it has taken you a second to pick up my inexperience/lack of knowledge in the post above. That is my point. If you are able to do that, then someone should have picked up the fact that I was not aware of all the risks and didn't fully understand what I was embarking on when I took the plunge. It shouldn't be a 'nanny state' however the title Financial Advisor assumes there is advice in their service even if it is a 'commercial, business' arrangement, ensuring responsible, informed lending. I do not remember any such advice and am certain there are thousands who fell in the same fluffy, lucrative, TV endorsed trap as myself. I'm not trying to start some sort of band wagon with disgruntled BTL customers trying to get compensation, it is more annoyance of banks hand-washing of a situation which I believe they are equally to blame for through irresponsible lending. Responsible lending would be to try and help people witha way out not just sit back and say 'Tough....stupid'. We could argue all day about the proportion of blame but it would be pointless. Apparently I have no case to complain and have only myself to blame for going in blind. I didn't really need the classroom smacking though.

dunstonh

There was a time where BTL's were the fashion - an alternative to pensions and sold as such.

Easy credit and property !!!!!! on tv didnt help.

I was stupid. You appear to be in the Financial Industry and it has taken you a second to pick up my inexperience/lack of knowledge in the post above.

You and hundreds of thousands, if not millions of others.

If you are able to do that, then someone should have picked up the fact that I was not aware of all the risks and didn't fully understand what I was embarking on when I took the plunge.

The problem is that the banks are not geared to giving that advice. They are almost order taking in that you say what you want, they say what they have to offer and then you fill in the paperwork.

It shouldn't be a 'nanny state' however the title Financial Advisor assumes there is advice in their service even if it is a 'commercial, business' arrangement, ensuring responsible, informed lending. I do not remember any such advice and am certain there are thousands who fell in the same fluffy, lucrative, TV endorsed trap as myself.

Did you actually see a financial adviser? Most financial advisers dont actually get involved in mortgages nowadays. They will employ a mortgage adviser. If you used a bank, and not a local adviser, then you just see a bank clerk with a mortgage exam. If you did ask a financial adviser for advice then you would have been given the pros and cons.

shazshazc

Did you actually see a financial adviser? Most financial advisers dont actually get involved in mortgages nowadays. They will employ a mortgage adviser. If you used a bank, and not a local adviser, then you just see a bank clerk with a mortgage exam. If you did ask a financial adviser for advice then you would have been given the pros and cons.[/QUOTE]

If that's the case, probably not a financial advisor then and more likely a mortgage advisor proving my point - someone, albeit a mortgage advisor in this case, wasn't I believe adequately ensuring client understanding of a financial commitment and consequently aiding responsible lending.

It's done now, I'll learn from it. I'm selling the TV lol

GMS

If a mortgage adviser had told you it was not for you and refused to arrange it would you simply have found one who would do it?

Many people were getting into Buy to Let on the back of Sarah Beeny etc. The never to end price rises made it look easy. Unfortunately the market collapsed leaving people stuck at best, ruined at worst.

As long as the rent covers the mortgage then you may need to sit tight for a while.

Thrugelmir

So why not just sell the property?