Why do people resent buy-to-letters so much?

mwpt

cells wrote: »

why would you want to be so cruel.

if you put regulations in place that a property owner needs xyz and some people can not meet criteria xyz all you do is force Mr A to go to Mr B and say....look the government is stupid it wont let me get a self cert interest only mortgage for £800 a month, can you please help me out here and go buy that house over there and I will have to give you £900 a month because living under a bridge is not an option.

the crash-wishers have this crazy idea that if the government forces more regulations on banks and mortgages that it will result in lower prices and everyone can buy a house or two each. The reality is that if you force tough regulations into place you just make it so those with big deposits or very well paid jobs step in to fill this regulatory requirement by becoming landlords and the interest have rent to pay instead of a self cert IO mortgage

I think in 10 years time the government will look back at today and think what the hell did we do!


Also you probably do not know but last year was a record. the rental sector grew by >440,000 homes. Dam BTL parasites you might grind your teeth just ban BTL mortgages but only about a quarter of that 440,000 units were funded by mortgages the rest was savings

Or another way of looking at it, cheap credit to both OO and BTL has pushed prices up. Cheap credit and IO mortgages to BTL means they can outbid OOs. More effective demand = higher prices. No-one would dispute that statement if it didn't concern BTL, which is the sacred cow on this forum.

What we have is people unable to get mortgages, not because mortgage restrictions are too tight, but because prices are too high, which have been pushed up by supply and demand and effective demand and affordability through credit. So this boards solution.... just throw more credit at the problem. If I extrapolate that out, we end up precisely back in the same problem in a short course, but with higher prices. Very very convenient for the multiple property owners here....

Instead, I like to imagine a world where interest rates never went this low. Price would be lower and people would not be restricted by the lending multiples problem.

Our central bank sees a problem, and I expect that lending rates to BTL will increase in due course. I see Australia is doing the same. But this little corner of the internet knows that banks are wrong and the real problem is we just need more debt.

But Stoke on Trent is cheap so I must be wrong.

wotsthat

Jason74 wrote: »

Nope. It was a complete cluster!!!! that would have brought the whole system crashing down had the Americans note made an even worse job of things and crashed the system before our mess did. Subsequently, it's taken ultra low interest rates to stop those people defaulting and made a bad situation worse.

If the U.S. hadn't lit the blue touch paper UK mortgage lending would have brought the whole system down? I find that a little far fetched.

People were bumping along quite nicely at similar house prices and higher interest rates. There was some nonsense going on like 120% mortgages and people downright lying without redress but I don't think that was the norm.

I keep hearing about low interest rates rescuing households but I reckon the vast majority, like me, just saw my mortgage rate halving over the course of three months as nothing more than an unneeded, but most welcome, gift from heaven.

As it was decided, wrongly IMO, that mortgage lending was to blame poor FTB's were excluded and had to watch through the sweet shop window as current owners and BTL's ate their fill. A bit like the second place in a game show - here's what you could've won.

Graham_Devon

wotsthat wrote: »

If the U.S. hadn't lit the blue touch paper UK mortgage lending would have brought the whole system down? I find that a little far fetched.

People were bumping along quite nicely at similar house prices and higher interest rates. There was some nonsense going on like 120% mortgages and people downright lying without redress but I don't think that was the norm.

I keep hearing about low interest rates rescuing households but I reckon the vast majority, like me, just saw my mortgage rate halving over the course of three months as nothing more than an unneeded, but most welcome, gift from heaven.

As it was decided, wrongly IMO, that mortgage lending was to blame poor FTB's were excluded and had to watch through the sweet shop window as current owners and BTL's ate their fill. A bit like the second place in a game show - here's what you could've won.

If UK lending was fine, it wouldn't have been caught up in all the problems.

Other countries weren't caught up in it all - because they didn't have the same lending issues we had.

What you are doing is a bit like a hospital saying "we didn't bring norovirus into the hospital" as the virus spreads like wildfire as they haven't protected themselves against is. Other hospitals though, have prepared and do contain it as they have risk assessed and protected themselves against it spreading - regardles sof who actually bought the virus in.

CLAPTON

Graham_Devon wrote: »

If UK lending was fine, it wouldn't have been caught up in all the problems.

Other countries weren't caught up in it all - because they didn't have the same lending issues we had.

What you are doing is a bit like a hospital saying "we didn't bring norovirus into the hospital" as the virus spreads like wildfire as they haven't protected themselves against is. Other hospitals though, have prepared and do contain it as they have risk assessed and protected themselves against it spreading - regardles sof who actually bought the virus in.

the UK banking system did indeed fail: UK mortgage leading was NOT the cause however.

But current MMR rules practically guarantee a continuing fall in the number of owner occupiers and the rise in renting: some would say this is a price worth paying, some would say not.

wotsthat

Graham_Devon wrote: »

If UK lending was fine, it wouldn't have been caught up in all the problems.

I suppose one way to assess whether something is fine is to see whether it's affected by other problems as they arise. It's a bit simplistic and !!!! about face though.

I'd say UK lending was fine (with a few qualifiers) because it didn't cause any problems.

Graham_Devon

CLAPTON wrote: »

the UK banking system did indeed fail: UK mortgage leading was NOT the cause however..

I'm not so sure why so many of you are hung up on defining one singular cause as if nothing else matters.

UK mortgage lending was certainly part of the issue, and a rather large one at that. You can deny that should you wish, but it's clearly documented and has been clearly defined by the BOE.

Going back to the analogy regarding norovirus. The cause of norovirus spreading throughout a hospital isn't the hospital itself. It's someone having norovirus within the hospital. However, no hospital can keep pointing the finger to the patient. It has it's own responsibilities and failings too.

As I say, the cause is neither here nor there really. Though it seems highly important to others who want to see lax lending again. The fact is that, whatever the cause, it caused carnage to OUR financial markets. It didn't to others as they had protected themselves. We hadn't.

cells

mwpt wrote: »

Or another way of looking at it, cheap credit to both OO and BTL has pushed prices up. Cheap credit and IO mortgages to BTL means they can outbid OOs. More effective demand = higher prices. No-one would dispute that statement if it didn't concern BTL, which is the sacred cow on this forum.

What we have is people unable to get mortgages, not because mortgage restrictions are too tight, but because prices are too high, which have been pushed up by supply and demand and effective demand and affordability through credit. So this boards solution.... just throw more credit at the problem. If I extrapolate that out, we end up precisely back in the same problem in a short course, but with higher prices. Very very convenient for the multiple property owners here....

Instead, I like to imagine a world where interest rates never went this low. Price would be lower and people would not be restricted by the lending multiples problem.

Our central bank sees a problem, and I expect that lending rates to BTL will increase in due course. I see Australia is doing the same. But this little corner of the internet knows that banks are wrong and the real problem is we just need more debt.

But Stoke on Trent is cheap so I must be wrong.

the problem with that idea is that it assumes mortgages are the only driver

something like 440,000 homes went to the private rental sector last year. ~330,000 of which were not funded by mortgages. Do you think prices would be cheap and you can buy two ha penny if there are 330,000 equity/cash buys just in the BTL sector?

also mortgage rationing is not just about lending multiples which will limit the price people can bid. without self cert you limit I think ~5% of the population (about 1.5 million homes) who have non standard lives eg they just started a business or their business has shown a tiny dip in profit one year or the bank thinks it is unaffordable by £1 per week as the computer said no. These people have no option but to go to a person who can jump those hoops and pay them rent rather than pay a bank for an IO mortgage

[Deleted User]

Amateurs that rent out property from inheritance or a BTL from their pension pot are the ones to watch out for. They treat the rent as cold hard cash for their back pocket. Then when maintenance and repairs need doing e.g. broken boiler, they drag their feet as this eats into their cold hard cash.

seven-day-weekend

Deleted_User wrote: »

Amateurs that rent out property from inheritance or a BTL from their pension pot are the ones to watch out for. They treat the rent as cold hard cash for their back pocket. Then when maintenance and repairs need doing e.g. broken boiler, they drag their feet as this eats into their cold hard cash.

Not necessarily true; it is also their major investment so they want to keep it in good order, therefore repair the boiler asap.

CLAPTON

Graham_Devon wrote: »

I'm not so sure why so many of you are hung up on defining one singular cause as if nothing else matters.

UK mortgage lending was certainly part of the issue, and a rather large one at that. You can deny that should you wish, but it's clearly documented and has been clearly defined by the BOE.

Going back to the analogy regarding norovirus. The cause of norovirus spreading throughout a hospital isn't the hospital itself. It's someone having norovirus within the hospital. However, no hospital can keep pointing the finger to the patient. It has it's own responsibilities and failings too.

As I say, the cause is neither here nor there really. Though it seems highly important to others who want to see lax lending again. The fact is that, whatever the cause, it caused carnage to OUR financial markets. It didn't to others as they had protected themselves. We hadn't.

I would welcome a reference to the UK mortgage market being a major cause of the financial collapse. Certainly HBOS, RBS and Lloyds didnot need a bail due to UK mortgage lending. If there had been no crisis in US then it's very unlikely that the UK mortgage market would have caused any significant financial issue.

As always the reaction to a problem is to solve the wrong problem with a massive over-reaction.
The consequences are a falling number of OOs and a rise in renting (not the only cause of course but a significant contribution).
A price not worth paying.