Starter homes being bought by BTL LLs

abankerbutnotafatcat

Firstly, about me. I'm not one of the usual suspects on this thread, when I do dip in and out of it it sometimes seems like everyone knows each other. But I noted something last night that I would be interested in discussing with others so thought i'd give it a go! Secondly, I have no particular axe to grind; I am actually a LL myself albeit of one property that I bought to live in but then moved overseas an didn't reoccupy when I returned. I have no problem with the concept of LLs, it fills a need. Now that's done:

Last night I walked home a different route as I'd been working late. I passed the edge of a new build (c4 years old) private estate which had the 25% or whatever social housing element. There is a terrace of 4 or 5 properties, modern 2 up 2 downs. I've seen one marketed online and it was rather nice internally and externally it's good looking for a new build. I presume that these are classic starter homes? 3 of the properties had 'let by' signs outside. It's a free market so if the LLs have the money and the FTBers don't then why not but it struck me as quite sad that these lovely little places aren't being loved as they were intended to be although I suppose the Ts or LLs might love them but it didn't quite seem the same. Am I being a bit over idealistic? It just seemed to be such a sign of the times.

Turnbull2000

Provide FTBs with cheaper, high LTV mortgages and they'll be able to compete better. Duel income buyers with access to a 4% rate 95-100% LTV mortgage would have a sniff, but current borrowing restrictions are leaving them sidelined. The government must step in and guarantee cheaper FTB mortgages.

shortchanged_2

Turnbull2000 wrote: »

Provide FTBs with cheaper, high LTV mortgages and they'll be able to compete better. Duel income buyers with access to a 4% rate 95-100% LTV mortgage would have a sniff, but current borrowing restrictions are leaving them sidelined. The government must step in and guarantee cheaper FTB mortgages.

How would they fare with future interest rate rises considering their initial capital outlay is likely to be very high?

Turnbull2000

shortchanged wrote: »

How would they fare with future interest rate rises considering their initial capital outlay is likely to be very high?

Interest rates will likely remain ultra low for many, many years. Raising them enough to hurt these buyers would be too politically toxic and detrimental to the banks and overall housing market.

IronWolf

Turnbull2000 wrote: »

Interest rates will likely remain ultra low for many, many years. Raising them enough to hurt these buyers would be too politically toxic and detrimental to the banks and overall housing market.

Yes because assuming interest rates will remain ultra low is a sensible thing to do.....

CLAPTON

Turnbull2000 wrote: »

Interest rates will likely remain ultra low for many, many years. Raising them enough to hurt these buyers would be too politically toxic and detrimental to the banks and overall housing market.

Once the economy starts moving again it's likely that inflation will start to motor. (QE plus all that pent up wish for higher wages)
The only tool in the toolbox is to raise interest rates.

So one either prays that the economy will flat line for years and years and years or one must plan for interest rates to return to more notmal levels.

HAMISH_MCTAVISH

CLAPTON wrote: »

interest rates to return to more notmal levels.

Mortgage interest rates of 4% to 5% are at normal levels.

Mortgage rates hit their high in the last cycle at 5.5% to 6.5%, at the absolute peak of the boom.

shortchanged_2

HAMISH_MCTAVISH wrote: »

Mortgage interest rates of 4% to 5% are at normal levels.

Mortgage rates hit their high in the last cycle at 5.5% to 6.5%, at the absolute peak of the boom.

Turnbull is asking for interest rates of 4% for FTB's with little or no deposit Hamish.

They are not normal levels.

Mr._Pricklepants

shortchanged wrote: »

How would they fare with future interest rate rises considering their initial capital outlay is likely to be very high?

I wonder how you manage to get out your front door in the morning, with all those things that could go wrong.

How would they fare continuing to rent?

shortchanged_2

Mr._Pricklepants wrote: »

I wonder how you manage to get out your front door in the morning, with all those things that could go wrong.

How would they fare continuing to rent?

Have you got any concept of risk?

Do you understand the concept of financial planning and the need to be able to adapt to changes in the market/circumstances?

Not to consider the possibility of future interest rate rises is a very dangerous position to take prickypants. Obviously yourself and Turnbull are more of the debt junkie mindset.

Hope and pray.

Mr._Pricklepants

shortchanged wrote: »

Have you got any concept of risk?
Do you understand the concept of financial planning and the need to be able to adapt to changes in the market/circumstances?

I do.

Therefore I think Turnbull's suggestion of providing high LTV's mortgage's to FTB backed by a state guarantee or whatever is a good one.

We currently have ridiculously low rates for low LTV lending and that should be extended to FTB's, especially low risk, dual income ones with a good credit file.

Look shorty, you either give FTB's a chance or you'll have the BTL LL's snapping them up, what do YOU prefer?