BTL, one with lower LTV or three with 75% LTV?

wolfplayer

SavingSteve wrote: »

I actually don't care about what happens to BTL, my initial comment, which I stand by, is that I find any person who actively wishes ill of another contemptible. My second view is I feel you're grossly overplaying the impact s24 will have, IMHO.

I come on these forums to learn (hence my question on the impact of the new rules) and help where I can. You obviously come on to make yourself feel better about yourself. I would laugh at you, but deep down I just feel sorry for you. Carry on ranting, hope it gives some meaning to your life.

And BTLers have actively caused harm to my real world position by repeatedly buying houses at higher prices than I can afford, then putting them on rental market. So there is cause and reason. They chose their sides.

Where I wish correction and S24 to bite them, they actively went into people-farming to cause as societally damaging housing problem, in pursuit of profit, playing that role in causing ill on my position and many younger people, denying them opportunity at affordable homeownership.

Those with more than 1 house, where my family has to rent vs these mad prices, have to take the market when it begins to go against them. And Section 24 going to dramatically change the financial position of many BTLers.

Well good work, you've finally learned that there's a lot more to Section 24 than you previously just assumed, some 16-18 months after it was announced in Budget 2015.

Still got 1 or more 'investment properties' ??

SavingSteve
12-12-2012, 6:49 PM

Partial transfer of equity without a conveyancer
Hi all, hoping for some guidance, most of the research done, one query remains!

1) Own investment property with spouse, as Joint Tenants
2) Want to transfer ownership 99% to spouse & keep 1% myself
3) Property is mortgaged

continues https://forums.moneysavingexpert.com/discussion/4341497

SavingSteve

How very clever of you to dig out a post from nearly 4 years ago (really, so very pathetic). I am very comfortable with the investment decisions I've made between then and now thank you very much, hence "don't care what happens to BTL". But that's frankly none of your business.

Seems like you've been dying for a house price crash since you've joined this forum (yes, two can play this game). And one has happened in that time, still wasn't enough for you? I see lots of joy in seeing potentially seeing BTLers fail, but not much progress on your own front from what I can tell.

Yes, it's all someone else's fault of course isn't it? There comes a point (maybe 8 years after you've been banging the same drum?) that you need to come to terms with your own reality.

I constantly remind myself not to feed the trolls on forums, so this will be the last I say on the matter. I wish you luck.

wolfplayer

Progress on my own front being continuing to add to substantial savings, whilst so many BTLers 'spread the risk' by buying lots more BTLs.

I'm ready for the future, and Section 24.

What amuses me is BTLers actively position to claim houses via BTL mortgages, then hold houses off the market leading to fewer transactions and lower supply, farm younger people for rent, and then cry foul when those they farm admit they couldn't care what happens to those BTLers in the wake of Section 24 and everything else kicking in against BTL.

Like the BTLers give a **** about the home-ownership hopes and dreams of the tenants they've outbid, held sale transaction supply away from, and positioned to farm. The vast majority of BTLers only want HPI/rent whatever the cost to others.

Anyway, Section 24 is fast coming up. Astonishing how so many BTLers and property investors totally oblivious to it. They should have known all about it within 30 days of announcement in 2015. Deserve to be purged for tax.

BTL interests and renter would-be homeowners interests are totally opposites. Troll out yourself property investor. Enjoy Section 24.

getmore4less

wolfplayer wrote: »

And BTLers have actively caused harm to my real world position by repeatedly buying houses at higher prices than I can afford, then putting them on rental market. So there is cause and reason.

The problem is the renters are willing to pay enough to support the prices the investors are willing to pay.

Given investors costs to buy are generally higher than an OO purchase it just points to you having unrealistic expectations of where prices should be.

wolfplayer

getmore4less wrote: »

The problem is the renters are willing to pay enough to support the prices the investors are willing to pay.

Given investors costs to buy are generally higher than an OO purchase it just points to you having unrealistic expectations of where prices should be.

That's complete nonsense imo.

And this doesn't even account for BTLers Mewing their deposits from other properties, vs renters who have to save their deposits, and BTLers having access to IO mortgages.

I'm paying my rent because I'm willing to allow the BTLers take the crazy balance sheet risks at these house prices, with S24 and everything else looming, including BTLers stuck because to sell means they have to pay big CGT bills that they already spent via MEW and buying more properties. Hello bankruptcy for many BTLers imo.

There is a more complex chicken and egg situation and that the growth of mortgaged buy-to-let (BTL) itself accounts for much of the tenant demand.

First time buyers are priced out and this is largely as a result of high house prices and also by strict affordability criteria that banks impose following the FCA’s Mortgage Market Review (MMR). The result of the latter is that a potential borrower must usually demonstrate that they can afford the payments on a 7% repayment mortgage. This is clearly a challenge at current prices.

By contrast, a BTL borrower has typically only needed to demonstrate that a 75% LTV interest-only mortgage, the expected rent exceeds the interest payment by 25% at a stressed rate of 5.49% (although some lender’s conditions vary slightly).

This means that a BTL borrower will always be able to outbid a first time buyer for a property, even if they have the same deposit. For example, with a £150,000 mortgage on a £200,000 property, the potential owner-occupier must show that he or she can meet monthly payments of £1,060 on a repayment mortgage at 7%. By contrast, the BTL investor would only need to meet interest-only payments of £686 at 5.49%.

BTL investors are demonstrably able to outbid first-time buyers and clearly have been doing so in great numbers – nearly all of the net increase in mortgage lending post-crisis has been to BTL investors, as noted in the Financial Stability Report last year. Given that the UK has a fairly fixed housing supply, every purchase of an investment property for rent creates ensures that there is at least one more individual who must rent for the foreseeable future. In effect, the very existence of BTL has created the demand.

AnotherJoe

Seems you have an over exaggerated idea of what S24 will do;

From Hansard; Only one in five individual landlords are expected to pay more tax as a result of this measure. The Government do not expect the change to have a large impact on either house prices or rent levels due to the small overall proportion of the housing market affected. The Office of Budget Responsibility has endorsed this assessment. It believes that the impact on the housing market will be small and, taking account of the other measures in the Budget, has not adjusted its forecast for house prices. By April 2020, only 10% of individual landlords will see a tax bill increase greater than £500.

Hardly bankruptcy causing numbers, or en masse.

wolfplayer

AnotherJoe wrote: »

Seems you have an over exaggerated idea of what S24 will do;

From Hansard; Only one in five individual landlords are expected to pay more tax as a result of this measure. The Government do not expect the change to have a large impact on either house prices or rent levels due to the small overall proportion of the housing market affected. The Office of Budget Responsibility has endorsed this assessment. It believes that the impact on the housing market will be small and, taking account of the other measures in the Budget, has not adjusted its forecast for house prices. By April 2020, only 10% of individual landlords will see a tax bill increase greater than £500.

Hardly bankruptcy causing numbers, or en masse.

You can choose to believe that very soft and managed opinion-review piece or not.

It's keeping things calm ahead of Section 24 coming in. History, after the event isn't going to have BTLers and other house price VI point to that statement as meaning you've been hard done by, or double-crossed, when it hard affects BTL and house prices. :rotfl:

Also we have lots of portfolio landlords who will be affected, with multiple properties. You don't need many in distress sellers to turn markets hard down, and a change in overall buyer sentiment against that. Roads and roads around here with houses the owners think worth £400K-£500K. When a seller needs to sell, and accepts £250K, and similar even happens with another seller nearby the following month, surrounding values fall. Market.

All houses in an area went up in value as buyers and sellers paid more, year after year. They fall in value when buyers and sellers transact at lower prices.

After all, so many BTLers haven't got first clue about what Section 24 means, 16 months after it was announced. "Durr isn't it just tax relief lowered to 20%." "Durrr, can I buy another BTL." Yeah buy away and put your own home on the line as HMRC and lenders move in to get the BTLers to pay what they own from 2017 as Section 24 gets phased in.

AnotherJoe

wolfplayer wrote: »

You can choose to believe that very soft and managed opinion-review piece or not.

It's keeping things calm ahead of Section 24 coming in. History, after the event isn't going to have BTLers and other house price VI point to that statement as meaning you've been hard done by, or double-crossed, when it hard affects BTL and house prices. :rotfl:

Also we have lots of portfolio landlords who will be affected, with multiple properties. You don't need many in distress sellers to turn markets hard down, and a change in overall buyer sentiment against that. Roads and roads around here with houses the owners think worth £400K-£500K. When a seller needs to sell, and accepts £250K, and similar even happens with another seller nearby the following month, surrounding values fall. Market.

All houses in an area went up in value as buyers and sellers paid more, year after year. They fall in value when buyers and sellers transact at lower prices.

After all, so many BTLers haven't got first clue about what Section 24 means, 16 months after it was announced. "Durr isn't it just tax relief lowered to 20%." "Durrr, can I buy another BTL." Yeah buy away and put your own home on the line as HMRC and lenders move in to get the BTLers to pay what they own from 2017 as Section 24 gets phased in.

Strawman argument. Why would they sell for £250k ???

Given the massive HPI rises in many areas, any BTL LL that eventually realises (and it will take a while for the penny to drop with many) they arent making money but are instead losing a hundred or so a month is not going to panic and knock £150,000 off the house to stop that small loss!

Even if they knocked a bit off to forestall a years losses, thats only £1k or £2k. Its not one hundred and fifty thousand pounds !

There will be no panic, just a gentle drip drip of people getting out of the BTL business and unfortunately probably many clueless amateurs getting in.

You are letting your desires for a house price crash run away with fanciful scenarios.

wolfplayer

AnotherJoe wrote: »

There will be no panic, just a gentle drip drip of people getting out of the BTL business and unfortunately probably many clueless amateurs getting in.

You are letting your desires for a house price crash run away with fanciful scenarios.

Because they have to pay HMRC for Section 24 and don't have the income to do so, so need to sell their main asset; their home. You keep believing in your 1 in 5. Many BTLers on LL forums are !!!!!!!! bricks about with their 10+ BTL properties.

Or they're caught in CGT trap and need to make whole both their lenders and taxman, and so forced to bring their main home to market to sell to raise money.

Obviously I am suggesting a cooler market with fewer buyers when this occurs. Unless you believe market will still be hot as more BTLers come under financial distress. Even if the sentiment is there, we're now seeing lenders tighten BTL application requirements with much higher rental cover to qualify for BTL mortgages which you touched upon yourself. So it's Section24, AND tougher BTL qualification for BTL dreamer buyers going forwards.

More useful as a deterrence will be the 145% rental test plus at least 25% deposit and bigger would IMO be better.

Anyway the BTL army can continue to think of themselves as perfumed do-gooders of sweetness and light, but they've been active in buying up houses to rent back to other people in society. Turning would be owners into renters. The most anti-social 'investment' of all.

They are surprised to learn that many people care nothing for them and welcome Section 24 and all the other policies ahead which are set to squeeze them very hard? BTLers care nothing about other individuals in society in my view, solely for themselves.

It's the absolute nature of their chosen investment vehicle and the decisions they've made to go into BTL. They want homeownership for themselves, but positioned to outbid and then rent back property to their fellow man.

AnotherJoe

wolfplayer wrote: »

Because they have to pay HMRC for Section 24 and don't have the income to do so, so need to sell their main asset; their home. .

There's a massive bit of illogic there. Presumably due to your agenda of wanting stuff to happen.

If i suddenly got an unexpected bill from the taxman for lets say £1,000 for the past years rental, and that was more than my income from my rental (not that I have one) dont you think i could (a) pay that from savings? Or (b) a small loan? Or failing that, would I (c) put it on credit card or (d) put my house up for sale at one hundred and fifty thousand pounds less than others in the street are going for in order to save the credit card interest of about £30 on my notional £1,000?

I dont see (d) happening as I'm not in the habit of chucking £150k away in order to save £1k.