"Thousands" with BOE trackers face mortgage interest rate rise

Graham_Devon

Head of the landlords association rages!

The head of the National Landlords Association has hit out furiously at the Bank of Ireland’s decision to hike increase rates for some 13,500 mortgage borrowers.

Chief executive Richard Lambert warned that the rise could trigger repossessions, making tenants homeless.

Bank of Ireland customers – of whom buy-to-let customers will bear the immediate full brunt of the increases – have tracker mortgages and, on online forums, some say the rise will add as much as £500 to their monthly mortgage payments.

Most affected, however, will be those with several Bank of Ireland loans, where the cost of the mortgage payments could be higher than rental income – thus contravening the Bank’s own terms and conditions.

A buy-to-let mortgage holder who is currently paying 2.25%, made up of the Bank of England Base rate plus 1.75%, will see their rate climb to 4.99% from May 1.

Bank of Ireland says the average monthly increase will be £145 a month.

Lambert said: “The NLA is dismayed that any lender is prepared to introduce such a substantial hike in its tracker rate without considering the impact that it will have on borrowers’ ability to meet the cost.

“This represents a substantial increase in the payments landlords will have to make on a monthly basis and is likely to have an enormous impact on their businesses and the security of their tenants’ homes.

“At best, the provision of homes will become more expensive, at worst, this may lead to repossessions and homelessness.

Bluff? Or are landlords really going to pushed over the edge by this? I'd say it's bluff, if not, it says a lot about the risks landlords took and the state of the business.

wotsthat

Graham_Devon wrote: »

Head of the landlords association rages!

Bluff? Or are landlords really going to pushed over the edge by this? I'd say it's bluff, if not, it says a lot about the risks landlords took and the state of the business.

Bluff? Look a few posts back - you heard via 5 random internet posts that there was a real chance that this would lead to significant repossessions. What changed your mind?

Of course it's bluff and if it isn't who cares? If you can't cope with rates at 4.5% then you shouldn't be a home owner or BTL.

Mr._Pricklepants

shortchanged wrote: »

Which camp do you come under prickypants?

The prickypants camp

Dribley

Mr._Pricklepants wrote: »

The prickypants camp

I thought you were in the MrRee Camp? In fact you two are so close you could even be the same Person :rotfl:

Mr._Pricklepants

Dribley wrote: »

I thought you were in the MrRee Camp? In fact you two are so close you could even be the same Person :rotfl:

Hmmm...as soon as I post, you seem to appear.

andy.m_2

I was with the Skipton when they pulled this move a couple of years back.
We went through all the shock/horror, all the cries for action and suing and the like.
Nothing came of it.
The world cried about "dangerous" precedent being set, nothing came of it, not may (if any?) followed suit after they got away with it and the get out of jail card was that I got to leave and remortgage without any penalty.

Same as now, except they have targeted landlords who all appear to be MSEers

It was there in the T&Cs clear as day, as it was in the Skipton T&Cs, and the exceptional circumstances is that they are being forced to readjust the capital held ratio, simple enough to grasp really.

I have stayed out of the other thread as it seems to be full of self pity and woe and I don't have the answers, just seems to be a moan-fest with threats of this or that probably none of which will come to fruition.

As I see it:

1) however much the BTL crowd don't want to see it, the circumstances are exceptional.
2) however much the BTL crowd don't want to see it, the clause has been there in the T&C's but they either didn't get advice, got poor advice or decided it wouldn't happen to them.
3) running to max credit lines based on BOE BR + 1.75% is lunacy.
4) BTL is a business, run with the good times prepare for the bad or suffer the consequences, you may be a nice guy/girl, but you are in business and so are all the others, they also have an innate desire to make money.

I feel for the resi crowd I genuinely do and I hope that BOI has a change of heart in that direction.

Thrugelmir

andy.m wrote: »

I feel for the resi crowd I genuinely do and I hope that BOI has a change of heart in that direction.

Given their financial position BOI cannot afford to lose money on what should be profitable activity. Total lunancy to think otherwise.

I would guess that BOI has a pretty poor lending book with above average risk.

Graham_Devon

The pigs are squealing...

Last week, Andrew Montlake, of mortgage broker Coreco, said: "This is a shocking move by the Bank of Ireland and, it could be argued, shows a blatant disregard for the fortunes of their customers," said Andrew Montlake, of Coreco.
"One of our clients has been hit with a sudden rise of 2.74% on a rental property that was ticking along nicely, which increases payments by £776 per month.

http://www.bbc.co.uk/news/business-21720212


Funny really. Savers can be screwed. FTB's can be screwed. The next generation have to bend over and seperate their cheeks.


But BTL's start squealing and answers are demanded. Wonder what interest this particular MP has. Reading up and him he appears to stand behind landlords on quite a few matters, including avoiding second home tax etc.

He's also fought to protect landlords who rent out to students having to pay council tax as it would "put pressure on the landlord who would have to pass it on to the tenants". Apparently no tax is due if you let your property out to students. Infact the more you read, the more you find he's against the landlord doing anything or being charged anything....pretty much ever.

Thrugelmir

Graham_Devon wrote: »

He's also fought to protect landlords who rent out to students having to pay council tax as it would "put pressure on the landlord who would have to pass it on to the tenants". Apparently no tax is due if you let your property out to students. Infact the more you read, the more you find he's against the landlord doing anything or being charged anything....pretty much ever.

Probably owns property himself.

wotsthat

Graham_Devon wrote: »

The pigs are squealing...

Funny really. Savers can be screwed. FTB's can be screwed. The next generation have to bend over and seperate their cheeks.

A mortgage broker wants low rates because it's good for his business & clients - no s**t.

You do get excited about the bleeding obvious.

Graham_Devon wrote: »

He's also fought to protect landlords who rent out to students having to pay council tax as it would "put pressure on the landlord who would have to pass it on to the tenants". Apparently no tax is due if you let your property out to students. Infact the more you read, the more you find he's against the landlord doing anything or being charged anything....pretty much ever.

I remember him when he chaired the Bob Diamond questioning - he seemed a bit of an idiot. He was so busy posturing and bank bashing that he didn't notice until a week later that Mr. Diamond hadn't actually answered any questions.

That's all this is - populist posturing.

That said I can't really see a problem with trying to prevent additional costs being applied to the housing markets. If margins are reduced for landlords then they'll want to repair them - that's going to put pressure on rents.