The Guardian: UK mortgage lender [Skipton] to offer first 100% loans since 2008 crisis

MultiFuelBurner

Sarah1Mitty2 said:

MultiFuelBurner said:

Sarah1Mitty2 said:

MultiFuelBurner said:

Sarah1Mitty2 said:

housebuyer143 said:

Whitlane said:

I don’t think they’ll get much uptake.

I’ve put the rents in that I charge my tenants and compared it to the approximate value of my properties. The amount Skipton are prepared to lend is way short on all of my properties.  The buyer would therefore need to find a large deposit anyway.

But if they have more than 5% they are not eligible anyway, so the property they can get is basically ruling out the majority.

My sister pays £1200 rent, the equivalent property is £400k. The cheapest 3 bed she can get is £300k... Skipton will lend £224k. The numbers will not stack for the majority.

Cheapest 2 bed in my area is about £180k. Rents £700. Still not enough to buy a place 🤷‍♂️

I know of a few examples recently of people moving back to parents, saving the 1200, and waiting for interest rates to do their work, bad news for landlords and potential sellers really, Skipton obviously know which way the market winds are blowing.

Strange as rents are increasing everywhere that I monitor across three counties.

Which area is it that rents have fallen already?

For a couple of the people moving home to their parents spare room the rent had fallen to zero, one person was saving about 12 or 13 hundred a month.

Do you mean they are saving up a deposit to buy?

Or do you think rents will decrease as well?

I think one of them said they were saving up to buy for cash when the time is right, bear in mind that this is 1200 quid a month saved on top of what they were already saving, bang that into a money market account and you are probably making better returns than most BTL?

So these so called friends are gonna save £1200 a month for 6-12 months but are going to buy for cash?

That makes zero sense as that £1200 they have wasted on rent could have been paying back a mortgage for some time.if they have cash plus a maximum of £14400 by living back with parents in one room for a year.

I really have to question if you just make this up as you go along? Or if your friend need some serious financial advice perhaps that's where you should point them.

Sarah1Mitty2

MultiFuelBurner said:

Sarah1Mitty2 said:

MultiFuelBurner said:

Sarah1Mitty2 said:

MultiFuelBurner said:

Sarah1Mitty2 said:

housebuyer143 said:

Whitlane said:

I don’t think they’ll get much uptake.

I’ve put the rents in that I charge my tenants and compared it to the approximate value of my properties. The amount Skipton are prepared to lend is way short on all of my properties.  The buyer would therefore need to find a large deposit anyway.

But if they have more than 5% they are not eligible anyway, so the property they can get is basically ruling out the majority.

My sister pays £1200 rent, the equivalent property is £400k. The cheapest 3 bed she can get is £300k... Skipton will lend £224k. The numbers will not stack for the majority.

Cheapest 2 bed in my area is about £180k. Rents £700. Still not enough to buy a place 🤷‍♂️

I know of a few examples recently of people moving back to parents, saving the 1200, and waiting for interest rates to do their work, bad news for landlords and potential sellers really, Skipton obviously know which way the market winds are blowing.

Strange as rents are increasing everywhere that I monitor across three counties.

Which area is it that rents have fallen already?

For a couple of the people moving home to their parents spare room the rent had fallen to zero, one person was saving about 12 or 13 hundred a month.

Do you mean they are saving up a deposit to buy?

Or do you think rents will decrease as well?

I think one of them said they were saving up to buy for cash when the time is right, bear in mind that this is 1200 quid a month saved on top of what they were already saving, bang that into a money market account and you are probably making better returns than most BTL?

So these so called friends are gonna save £1200 a month for 6-12 months but are going to buy for cash?

That makes zero sense as that £1200 they have wasted on rent could have been paying back a mortgage for some time.if they have cash plus a maximum of £14400 by living back with parents in one room for a year.

I really have to question if you just make this up as you go along? Or if your friend need some serious financial advice perhaps that's where you should point them.

In one case the parents house was rural and quite large, there was no mention of one room, they would basically have the run of the place, in another case the 1200 included commuting costs and eating costs while at work, and they had been splitting a rent of about 900 with someone else who left the flat, getting a job near the parents and living with them got rid of these costs. In both these cases and a couple of others the choice was between loading up on mortgage debt at the peak of the market or bailing out a landlord versus  free or very cheap digs at home and throwing all that cash into a tidy little cash cushion, and there was no mention of 6-12 months it was long term thinking from most of them due to the broken property market which they don`t want to subsidise any longer.

jimbog

Sarah1Mitty2 said:

jimbog said:

Sarah1Mitty2 said:

housebuyer143 said:

Whitlane said:

I don’t think they’ll get much uptake.

I’ve put the rents in that I charge my tenants and compared it to the approximate value of my properties. The amount Skipton are prepared to lend is way short on all of my properties.  The buyer would therefore need to find a large deposit anyway.

But if they have more than 5% they are not eligible anyway, so the property they can get is basically ruling out the majority.

My sister pays £1200 rent, the equivalent property is £400k. The cheapest 3 bed she can get is £300k... Skipton will lend £224k. The numbers will not stack for the majority.

Cheapest 2 bed in my area is about £180k. Rents £700. Still not enough to buy a place 🤷‍♂️

I know of a few examples recently of people moving back to parents, saving the 1200, and waiting for interest rates to do their work

Moving back into parent's spare room to wait for a price crash. What could possibly go wrong?

Paying a landlord 1200 quid a month for a so so flat 

True. Renting to wait for a price crash would be an even greater folly

Ksw3

It is very difficult. I couldn't move back home as the reason I left was that there were no jobs ad continue to be less and less. It took 10 years to save a deposit whilst paying rent in a city. 

My landlord had no mortgage so he was making a lot of money but I do wonder if the business model of BTL is very clear. Is the intention that you make money every month but also gain from house price rises and paying off debt? Surely your net wealth has increased if you're covering your expenses and reducing debt even if not making monthly profit? If you needed income in addition to covering costs I would have thought there were better ways of doing that? 

housebuyer143

Ksw3 said:

It is very difficult. I couldn't move back home as the reason I left was that there were no jobs ad continue to be less and less. It took 10 years to save a deposit whilst paying rent in a city. 

My landlord had no mortgage so he was making a lot of money but I do wonder if the business model of BTL is very clear. Is the intention that you make money every month but also gain from house price rises and paying off debt? Surely your net wealth has increased if you're covering your expenses and reducing debt even if not making monthly profit? If you needed income in addition to covering costs I would have thought there were better ways of doing that? 

Most landlords never pay off the debt as interest only is how a large proportion are taken. That means landlords rely solely on house price growth and rent to make a profit. If the house value decreases they lose money.

 Most BTL mortgages at the moment wouldn't make a penny if they were on repayment due to the high mortgage rates and lots of interest only are just scraping by. House price growth is a gamble and might not pay off so it can't be something you take as a guarantee.

The rent they get therefore needs to cover the expenses and not make a loss as realistically who wants to run a businesses that makes them a loss each month? Especially because they could just sell the house and put the money they used as a deposit into a savings account and could be making a guaranteed 3.5% to 5% in the bank with no stress at all. 

Lots of landlords are selling up as the numbers do not quite work in the current climate. 

Sarah1Mitty2

jimbog said:

Sarah1Mitty2 said:

jimbog said:

Sarah1Mitty2 said:

housebuyer143 said:

Whitlane said:

I don’t think they’ll get much uptake.

I’ve put the rents in that I charge my tenants and compared it to the approximate value of my properties. The amount Skipton are prepared to lend is way short on all of my properties.  The buyer would therefore need to find a large deposit anyway.

But if they have more than 5% they are not eligible anyway, so the property they can get is basically ruling out the majority.

My sister pays £1200 rent, the equivalent property is £400k. The cheapest 3 bed she can get is £300k... Skipton will lend £224k. The numbers will not stack for the majority.

Cheapest 2 bed in my area is about £180k. Rents £700. Still not enough to buy a place 🤷‍♂️

I know of a few examples recently of people moving back to parents, saving the 1200, and waiting for interest rates to do their work

Moving back into parent's spare room to wait for a price crash. What could possibly go wrong?

Paying a landlord 1200 quid a month for a so so flat 

True. Renting to wait for a price crash would be an even greater folly

Yes, at 1200 much better just to crash at the parents for a while, most parts of the UK will be half that or less for a basic flat though.

Sarah1Mitty2

housebuyer143 said:

Ksw3 said:

It is very difficult. I couldn't move back home as the reason I left was that there were no jobs ad continue to be less and less. It took 10 years to save a deposit whilst paying rent in a city. 

My landlord had no mortgage so he was making a lot of money but I do wonder if the business model of BTL is very clear. Is the intention that you make money every month but also gain from house price rises and paying off debt? Surely your net wealth has increased if you're covering your expenses and reducing debt even if not making monthly profit? If you needed income in addition to covering costs I would have thought there were better ways of doing that? 

Most landlords never pay off the debt as interest only is how a large proportion are taken. That means landlords rely solely on house price growth and rent to make a profit. If the house value decreases they lose money.

 Most BTL mortgages at the moment wouldn't make a penny if they were on repayment due to the high mortgage rates and lots of interest only are just scraping by. House price growth is a gamble and might not pay off so it can't be something you take as a guarantee.

The rent they get therefore needs to cover the expenses and not make a loss as realistically who wants to run a businesses that makes them a loss each month? Especially because they could just sell the house and put the money they used as a deposit into a savings account and could be making a guaranteed 3.5% to 5% in the bank with no stress at all. 

Lots of landlords are selling up as the numbers do not quite work in the current climate. 

They can`t just sell the house though, more and more property is sitting unsold, and they have to get rid of the tenant first.

housebuyer143

Sarah1Mitty2 said:

housebuyer143 said:

Ksw3 said:

It is very difficult. I couldn't move back home as the reason I left was that there were no jobs ad continue to be less and less. It took 10 years to save a deposit whilst paying rent in a city. 

My landlord had no mortgage so he was making a lot of money but I do wonder if the business model of BTL is very clear. Is the intention that you make money every month but also gain from house price rises and paying off debt? Surely your net wealth has increased if you're covering your expenses and reducing debt even if not making monthly profit? If you needed income in addition to covering costs I would have thought there were better ways of doing that? 

Most landlords never pay off the debt as interest only is how a large proportion are taken. That means landlords rely solely on house price growth and rent to make a profit. If the house value decreases they lose money.

 Most BTL mortgages at the moment wouldn't make a penny if they were on repayment due to the high mortgage rates and lots of interest only are just scraping by. House price growth is a gamble and might not pay off so it can't be something you take as a guarantee.

The rent they get therefore needs to cover the expenses and not make a loss as realistically who wants to run a businesses that makes them a loss each month? Especially because they could just sell the house and put the money they used as a deposit into a savings account and could be making a guaranteed 3.5% to 5% in the bank with no stress at all. 

Lots of landlords are selling up as the numbers do not quite work in the current climate. 

They can`t just sell the house though, more and more property is sitting unsold, and they have to get rid of the tenant first.

You can sell it with the tenant in it and at the right price, everything will sell. I sold mine with the tenants in it and it was actually more desirable 🤷‍♂️ this was back in Oct 21 though before the market stagnanted.

BikingBud

See Skipton BS Mortgage

Reality on the ground

Sarah1Mitty2

BikingBud said:

See Skipton BS Mortgage

Reality on the ground

Yes, looks like prices need to fall quite a bit now to attract any buyers.