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1 in 8 mortgages now BTL
Comments
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I would suspect that the rise in BTL is that it is nigh on impossible to get an above inflation return on savings accounts.You're right Graham - they don't account for the majority of BTL mortgages.
And I haven't said otherwise.
What I have said (and this is 100% fact) is that the RISE in the number of BTL mortgages is due to people using BTL as front in order to obtain an IO mortgage for their own residence.0 -
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Thrugelmir wrote: »A source would be useful.
What?
You mean, like, "official" figures?
Or some undercover whistle-blower?
Or a "proper" journalist saying it?
It really is hard to know who to believe these days.0 -
What?
You mean, like, "official" figures?
Or some undercover whistle-blower?
Or a "proper" journalist saying it?
It really is hard to know who to believe these days.
There's plenty of proper reports if one takes the time and trouble to read them .
The FSA published a comprehensive mortgage market review at the end of October. Which encompassed BTL lending. In particular set out standards for anybody connected in selling mortgage products such as lenders and brokers. So will kick the rogues into touch.0 -
Thrugelmir wrote: »There's plenty of proper reports if one takes the time and trouble to read them .
The FSA published a comprehensive mortgage market review at the end of October. Which encompassed BTL lending. In particular set out standards for anybody connected in selling mortgage products such as lenders and brokers. So will kick the rogues into touch.
Well that's alright then.
I can sleep well tonight.
Goodnight mate.0 -
What?
You mean, like, "official" figures?
Or some undercover whistle-blower?
Or a "proper" journalist saying it?
It really is hard to know who to believe these days.
Do you have a source?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Graham_Devon wrote: »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.
Your blinkers probably won't allow you to see that in the main these are cost additive. A business owner will try to pass these to the customer, absorb them or sell up. A rent regulator wouldn't be trying to ensure that rents are low but that they are fair taking into account the costs associated with providing a service. The energy market has a regulator - what happens when the wholesale price of energy goes up? If they sell up who do they sell to? All the skint people you keep telling us about that can't afford to save?
The prejudice is obvious from the suggestion that BTL's be held for 10 years. What's the current holding period - are you trying to resolve a problem that isn't there?
Don't like the pitch about building a glut of houses either that can only purchased with residential mortgages. Feel free to put up your own capital though.0 -
Graham_Devon wrote: »
If BTL landlords had to take repayment mortgages, it would make the yield far lower, and therefore, not quite as worth it.
However, this isn't the case for the BTL landlord who can tale a product and make smaller mortgage payments, cashing in on the difference between a repayment mortgage and an IO mortgage. As interest on the mortgage is also tax deductible, it increase the amount the BTL owner is better off by, and this continues throughout the loan. They don't particularly want to pay down the loan, as that's less to deduct the tax on.
So for instance, these are just example figures.
FTB needs to pay £750 a month for the repayment mortgage.
BTL needs to pay £400 a month for the BTL mortgage. BTL
Using a rate of 4% with 90%LTV gives I/O of closer to £500 per month.
Whilst this is tax deductible it still has to be paid away.
Out of the net income expenses have to be met.
Insurance
Safety Inspections Gas/Electricity
Agents Fees
Professional Fees
Buying/Selling Costs
Repair/Maintenance Costs -which can quickly eat into profits
Void periods
For an off the shelf average buy to let with a full loan the figures aren't exactly stimulating.
Unless there is capital growth, or you can pick up property cheap and "renovate" cheaply, thus building in your own capital appreciation it isn't that much of a winner.
Don't dispute you may be able to "claim" certain personal "expense" in the mix and or be in a particularly high rent/return area but these are limited."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Your blinkers probably won't allow you to see that in the main these are cost additive.
Already seen, and commented on it.A lot of BTL investors on forums would simply turn around and just suggest they would have to charge £1000 rent, but the market simply wouldn't allow that.
http://forums.moneysavingexpert.com/showpost.php?p=57124161&postcount=210 -
Aren't people having to rent out their original property in order to buy the next place and move up the ladder because they simply can't sell in the current climate?
It would be nice to do things in the right order but that's not always possible I guess.0
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