1 in 8 mortgages now BTL

Graham_Devon

Britain is issuing the largest number of 'landlord loans' since records began, official figures have revealed.

One in eight mortgages now a buy-to-let loan deal - an all-time high, the report said.

Of the 11.3million mortgages in this country, 1.44million are buy-to-let loans, rather than standard residential mortgages.

A decade ago, there were only 275,500 buy-to-let loans, equal to just 2.4 per cent of the entire market.

Today the number of buy-to-let loans is equal to 12.7 per cent, according to the figures from the Council of Mortgage Lenders.

The change is partly because a generation of young people have been locked out of the housing market by soaring house prices.

With an average house price of nearly £160,000, which is more than six times higher than the average salary, a generation of young people cannot afford to buy their own home.

To make matters worse, the average monthly rent has climbed to £741 per month, which inhibits their ability to save money every month towards a deposit.

Last month, a report from the Financial Services Authority, the City regulator, said the buy-to-let boom has added to the problem of people trying to buy.

Will anything ever be done? Don't forget, BTL landlords are on much more favourable terms now over the FTB....they still have IO loans.

Mark Prisk, the Housing Minister has just basically said it's all dysfunctional and "can't be right"...but of course, theres no plans to actually deal with it....just words.

http://www.thisismoney.co.uk/news/article-2230036/Landlord-loans-reach-time-high-mortgages-buy-let-deals.html

ess0two

What needs to be done?

Lower / no deposit requirements?everything your against?

robmatic

Much more favourable terms? Have you seen the interest rates and eye-watering arrangement fees on BTL mortgages?

CLAPTON

I believe that most BTL properties have people living in them so banning BLT mortgages won't provide more homes.
Indeed it might be argued that rented properties have a higher occupancy level than first time buyer homes.

One might note that £160,000 is only three times two joint buyers on average salary.



Building more houses on the other hand would produce more homes for people; however they are handicapped by the absurd taxes on newbuilds making them poor value for money.

Graham_Devon

ess0two wrote: »

What needs to be done?

Lower / no deposit requirements?everything your against?

No, there are other things that can be done.

Rent controls like other countries impose would obviously make prospective BTLs think twice.

Higher rental regulation would do the same.

Removing some of the tax allowances or upping CGT. Maybe imposing a tax on BTL in it's own entity...there are plenty of products and services which attract their own tax.

We could create regulation for example that states any BTL property has to be held and let for 10 years (or any number) for tax purposes. I.e. if you sell beforehand, you pay back any tax allowances......or make it so that all BTL mortgages from this point forward are on a repayment basis (much like has happened to residential).

These are just examples, not proposals. It's highlighting that things could be done. Not necessarily highlighting what should be done.

Obviously, just building a glut of homes that can only be bought ona residential mortgage is probably the easiest way to do things.

Graham_Devon

robmatic wrote: »

Much more favourable terms? Have you seen the interest rates and eye-watering arrangement fees on BTL mortgages?

Interest rates which are indeed, tax deductable, unlike a residential mortgage.

coastline

80% of homes were rented just after WW1...which has been reversed in recent decades.
Another thing to add which is overlooked is theres 23m homes in the UK...around half are mortgage free...considering many of those will have reasonable debts so not all home owners are struggling..
I can't see BTL getting anywhere near the percentages from years ago..

http://news.bbc.co.uk/1/shared/spl/hi/guides/456900/456991/html/default.stm

CLAPTON

Graham_Devon wrote: »

Obviously, just building a glut of homes that can only be bought ona residential mortgage is probably the easiest way to do things.

bizarre use of the word 'glut'; I had in mind building desperately needed housing for hard working families.

Rinoa

Graham_Devon wrote: »

Will anything ever be done? Don't forget, BTL landlords are on much more favourable terms now over the FTB....they still have IO loans.

Mark Prisk, the Housing Minister has just basically said it's all dysfunctional and "can't be right"...but of course, theres no plans to actually deal with it....just words.

http://www.thisismoney.co.uk/news/article-2230036/Landlord-loans-reach-time-high-mortgages-buy-let-deals.html

Hmmm. Your glee at stricter mortgage lending clearly hasn't had the effect you had anticipated.

Graham_Devon

CLAPTON wrote: »

bizarre use of the word 'glut'; I had in mind building desperately needed housing for hard working families.

Eh?

I don't know what you are taking issue with. The definition of the word is:

glut [glʌt]n1. an excessive amount, as in the production of a crop, often leading to a fall in price
2. (Business / Commerce) to supply (a market) with a commodity in excess of the demand for it

Basically, I'm suggesting building on a large scale, large enough to reduce prices to solve the issues of increasing rents and increasing house prices.

Would have many other, much needed economic benefits too.

CLAPTON

Graham_Devon wrote: »

Eh?

I don't know what you are taking issue with. The definition of the word is:

I note the definition; I had missed the point that you consider there is an excess of properties in the UK in relation to the demand.