BTL landlords flourish as FTB's struggle

Graham_Devon

HAMISH_MCTAVISH wrote: »

It was always going to end up like this, that's what happens when you raise deposits and restrict lending so that only the wealthy can buy.

And it's not like we didn't warn them often enough...

Raising deposits is one thing.

Moving towards preferencial BTL lending is another.

That's what is happening. Two buyers could have a 20% deposit. The BTL would have an easier time getting a mortgage.

Graham_Devon

HAMISH_MCTAVISH wrote: »

The inevitable result of mortgage rationing.

"Be careful what you wish for".... Does that ring any bells Graham?

No it's not the inevitable result at all.

You are treating the BTL and FTB as the same borrower, which simply isn't the case.

The BTL buyer has specific products. The BTL can't use a FTB product. The FTB can't use a BTL product.

BTL products are easier to get, yes, due in part to BTL's sometimes having the deposit requirement already, but also because funding has been channeled that way. The co-op for example, removed some funding from residential and put a a billion into BTL lending.

You can still get interest only as a BTL, which you can't as a domestic buyer too.

It's not mortgage rationing at all. Its the products that exist and lenders preferring to offer products to the BTL, as it's easier money and less risk.

macaque_2

IveSeenTheLight wrote: »

As many have said before, the only real way to give opportinuties to more of the population is to increase the credit availability, otherwise it will need significant will power and determintation for the average FTB to build up the required deposits.

Many may have said it before but they were wrong. An asset bubble cannot be repaired with more loose credit. Globalisation has put a cap on UK wages and house prices have maxed out on affordability rather than need. Much as I disagree with him most of the time, Hamish is right on this. The only solution is to build a million more houses. It may not be a green and pleasant land afterwards but that is the only humane solution.

HAMISH_MCTAVISH

macaque wrote: »

Much as I disagree with him most of the time, Hamish is right on this. The only solution is to build a million more houses..

It is indeed.

And it's not going to happen until there is a significant increase in lending.

Builders won't build what they can't sell.

Emy1501

Home ownship rates have been falling since 2003 well before the credit crunch.

HAMISH_MCTAVISH

Emy1501 wrote: »

Home ownship rates have been falling since 2003 well before the credit crunch.

True, but misleading.

The percentage of homeowners peaked in 2003, but the absolute number of homeowners didn't peak until 2006.

Population increased faster than we could build homes for them after 2003, hence the percentage figure dropped, while the number of homeowners kept rising.

The_J

Graham_Devon wrote: »

Raising deposits is one thing.

Moving towards preferencial BTL lending is another.

That's what is happening. Two buyers could have a 20% deposit. The BTL would have an easier time getting a mortgage.

That is false.

80% LTV on a BTL is virtually impossible. There are 3 lenders from memory, all extremely expensive.

80% on residential is now close to the best rates on the market. As of 12 months ago you'd pay a hefty premium for going over 75% LTV.

Want to increase deposit to 25%? Nooooooooo. Still easier on the residential side. Very high fees and limited choice on BTL even there.

Want to increase the deposit to 30%? No no noooo. Very easy to get a resi at that level, best rates on the market. BTL rates at that level are maybe only 1% more than the equivalent resi but the fees are still high.

Increase it to 35%? OK, BTL is now easier. Coventry BS are a good lender, quick service and decent rates (still pushing 1% more than resi). Still require proof of income though.

macaque_2

HAMISH_MCTAVISH wrote: »

It is indeed.

And it's not going to happen until there is a significant increase in lending.

Builders won't build what they can't sell.

Builders could sell at a profit but they won't start meeting house building needs until the rules make it more profitable to use land banks rather than sitting on them. Roll on self build

nollag2006

macaque wrote: »

Many may have said it before but they were wrong.

As wrong as your 70% club?

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

Graham_Devon

The_J wrote: »

That is false.

80% LTV on a BTL is virtually impossible. There are 3 lenders from memory, all extremely expensive.

80% on residential is now close to the best rates on the market. As of 12 months ago you'd pay a hefty premium for going over 75% LTV.

Want to increase deposit to 25%? Nooooooooo. Still easier on the residential side. Very high fees and limited choice on BTL even there.

Want to increase the deposit to 30%? No no noooo. Very easy to get a resi at that level, best rates on the market. BTL rates at that level are maybe only 1% more than the equivalent resi but the fees are still high.

Increase it to 35%? OK, BTL is now easier. Coventry BS are a good lender, quick service and decent rates (still pushing 1% more than resi). Still require proof of income though.

Make BTL repayment, and then who would it be eaiser for?

Notice you decided to ignore the interest only part, conviniently!