UCB refuses to pass interest rate change onto buy to let mortgage customers

keith14

I found out today that UCB (Nationwide Building Society) has made a company decison NOT to pass the Bank of England's drop in interest rates onto Buy to Let customer mortgages. What terrible greed at this difficult time. Most buy to let people like myself run  a rental property as a holiday let, so currently have no income. The interest rate drop was made to help people, so UCB decided to keep it for themselves. They should be shamed as a company.

csgohan4

The other side of the coin, what does it say on your terms and conditions, product type for passing on BOE changes, we've had several threads on here who cry greed when in fact they didn't read their T+Cs properly. If it says your rate is not linked to BOE, then it's not, no matter how much you stamp your feet.
Banks are not charity and charge what it is in your T+Cs, no more, no less. 

So the question is, do you have a Tracker mortgage or something that is LINKED to the BOE in your T+C?
I have a 5 year fixed mortgage, should I cry greed that my rate is not lowered?

Thrugelmir

keith14 said:

 Most buy to let people like myself run  a rental property as a holiday let, so currently have no income. 

As BTL is commercial unregulated lending. There's a far higher risk to the lender of default. Risk will therefore be priced accordingly. In the current climate early estimates suggest that property lending is going to require hefty provisions by the banks. As a business owner a complete lack of rental income should have been factored into your business plan. These are tough times in which many people are going to suffer financial loss. Leveraging with debt has been and will always be double edged. 

davidmcn

keith14 said:

Most buy to let people like myself run  a rental property as a holiday let

Do they? I wouldn't have thought that was generally permitted by the lenders.

minimike2

No, "most" BTL landlords do not run holiday lets. 
Some do. But they do require this to be allowed under the terms of the allowable letting types and very few lenders cater for it.

p00hsticks

If you are running a holiday let then you should be paying Business Rates rather than council tax on the property, which would make you  eligible for the small business grant of £10,000 / £25,000 ?

https://www.gov.uk/government/publications/coronavirus-covid-19-business-support-grant-funding-guidance-for-businesses

John_

keith14 said:

I found out today that UCB (Nationwide Building Society) has made a company decison NOT to pass the Bank of England's drop in interest rates onto Buy to Let customer mortgages. What terrible greed at this difficult time. Most buy to let people like myself run  a rental property as a holiday let, so currently have no income. The interest rate drop was made to help people, so UCB decided to keep it for themselves. They should be shamed as a company.

But the risk premium that you represent will have gone up by more than the base rate has fallen.

keith14

You are all clearely much more knowledgeable than myself. I raised why UCB had decided as a company (nothing to do with my mortgage TC's) not to pass the drop in interest rates onto their mortgage customers. I'm not ware the bank of England dropped interests rates to help banks, I though it was to help individuals and businesses. So if the risk premium is high when interest rates are low, then why do UCB when interest rates go up do they increase interests rates on mortgages? It should work both ways and at this critical time banks need to priorities helping individuals and small businesses. Thanks for the link to the small business grant.

Thrugelmir

keith14 said:

I'm not ware the bank of England dropped interests rates to help banks, I though it was to help individuals and businesses. 

Bank of England's macro remit is to maintain financial stability in the system. Nothing more. Reducing interest rates also hurts those with cash deposits/savings. Certainly not a policy to assist the indebted/ over leveraged. 

spoovy

Some might argue that even having a BTL mortgage at a time of national housing crisis counts as "terrible greed" at least as much as your bank not lending to you at the rate you would prefer.

poppy10_2

keith14 said:

The interest rate drop was made to help people

It wasn't made to help greedy landlords.
How about selling the holiday let and allowing a local to buy their own home?