buy-to-let will lose money in 91pc of regions

mwpt

cells wrote: »

majority of BTL has no mortgage at all...

BTL sector has grown a lot in the last decade. They've managed to pay off all those mortgages?

Or does it mean BTL landlords, rather than BTL properties?

kinger101

Thrugelmir wrote:

Vast majority of BTL are highly leveraged.

cells wrote:

majority of BTL has no mortgage at all...

Are there any official stats on this? I guess HMRC would have data on the amount of deductions for mortgage interest, but the average value of a rental property might be difficult to find?

I think there will certainly be a subset of landlords who've always leveraged to the max, and own multiple properties. But at the same, some will have no leverage. And some will be own one or two properties and their leverage would have diminished through repayments and HPI.

Graham_Devon

cells wrote: »

majority of BTL has no mortgage at all...

Evidence? or just another made up statistic?

cells

kinger101 wrote: »

Are there any official stats on this? I guess HMRC would have data on the amount of deductions for mortgage interest, but the average value of a rental property might be difficult to find?

I think there will certainly be a subset of landlords who've always leveraged to the max, and own multiple properties. But at the same, some will have no leverage. And some will be own one or two properties and their leverage would have diminished through repayments and HPI.

You can not really get more than a 75% BTL mortgage. Some lenders do 80% and one lender does 85% however the 85% lender is only a tiny fraction of the market (it isnt one of the big players like BM or TMW)

So even a serial leverager will at most be at 75% LTV and likely lower than that.

Also over half the country has not gone up in price much at all some regions are down in price over the decade so there has been in half the country no option to leverage up because there has been no gain to leverage up on. The NE the NW the W and E midland and Y&H have all been leverage up free for more than a decade...

tkane

kinger101 wrote: »

I believe the average advance on a BTL is around 66% (which includes remortgages). I'm not sure how many are mortgage free or stuck on some really low SVR from say 10 years ago.

A lot of Buy to let properties are bought for cash. I remember reading a statistic that about 40% of all London transactions involve no mortgage.

Staggering amount of wealth about...

cells

Graham_Devon wrote: »

Evidence? or just another made up statistic?

there are aprox 5 million private rentals if not a bit higher now, vs about 1.7 million BTL loans

cells

tkane wrote: »

A lot of Buy to let properties are bought for cash. I remember reading a statistic that about 40% of all London transactions involve no mortgage.

Staggering amount of wealth about...

So over 400,000 properties bought cash in 2014 vs a bit under 800,000 with a mortgage. Most cash buyers are thought to be those near retirement downsizing or moving sideways

51% of transactions in kensington&Chelsea are cash so the most expensive part of the country is mostly cash transactions.

kinger101

The article is here;

http://www.ft.com/cms/s/0/556b3184-6c3b-11e5-8171-ba1968cf791a.html

Of course, as the article indicates, some of the BTL will be cash sales but financed via remortgaging another property. Which might for example happen if someone wants to take advantage of a lower rate on a residential mortgage, or they have another property on which they can more reliably get a BTL mortgage.

kinger101

cells wrote: »

there are aprox 5 million private rentals if not a bit higher now, vs about 1.7 million BTL loans

Some figures here;

BTL balances £200B

http://www.cml.org.uk/news/news-and-views/buy-to-let-the-past-is-no-guide-to-the-future/

Private sector rental properties (in 2011) 4.2 Million

http://www.ons.gov.uk/ons/rel/census/2011-census/detailed-characteristics-on-housing-for-local-authorities-in-england-and-wales/short-story-on-detailed-characteristics.html

Which puts the mean debt on a rental property at £47.6K.

Though some of the BTL debt will be on residential (re)mortgages, I think this also supports that we're not really in a situation where the majority of landlords are highly leveraged.

cells

kinger101 wrote: »

Some figures here;

BTL balances £200B

http://www.cml.org.uk/news/news-and-views/buy-to-let-the-past-is-no-guide-to-the-future/

Private sector rental properties (in 2011) 4.2 Million

http://www.ons.gov.uk/ons/rel/census/2011-census/detailed-characteristics-on-housing-for-local-authorities-in-england-and-wales/short-story-on-detailed-characteristics.html

Which puts the mean debt on a rental property at £47.6K.

Though some of the BTL debt will be on residential (re)mortgages, I think this also supports that we're not really in a situation where the majority of landlords are highly leveraged.

private rental is above 5 million now

A lot of BTL is cash purchase or at least equity transfer

The ONS seems to suggest the private rental sector is growing by ~300,000 units a year while the CML claims only about 100,000 new BTL loans for purchases are given each year. Therefore some 200,000 BTLs must be purchased cash (or let to buy or rent own their paid for home and buy another with a residential mortgage)


the CML also had a good table which shows the average loan size of BTLs and residential mortgages and the average LTV. I tried to find it just now but couldnt