Banks pull the plug on buy-to-let landlords

mystic_trev

The era of the amateur landlord has all but ended, with banks effectively refusing to lend to new entrants to the buy-to-let market. Thousands of existing landlords also face huge increases in the cost of remortgaging, experts said yesterday. The warning came as HBOS, Britain’s biggest group of lenders, imposed the third increase in the cost of residential mortgages in as many weeks. Cheltenham & Gloucester, the fourth-biggest lender, also increased some of its rates for the second time in three weeks.
First-time landlords, including parents eager to buy a house for their student children, will now find it almost impossible to enter the housing market.

http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article3818913.ece

pickles110564

mystic_trev wrote: »

http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article3818913.ece

Funny how CBS have just sent us letters on our several mortgages dropping their rates.

Rover

:rotfl:
The winds of change Pickles.......

Gorgeous_George

dolcevita wrote: »

What?

You've got mortgages on your rental properties after all these years?



How quaint.

It's called tax planning old boy.

GG

Zammo

So what's going to happen when all the Johnny come lately BTL Gazillionaire property gurus come to the end of their fixes???

TIMBERRRRRRRRRRRRRRR!!!!!!!!!11111111one1111!!1111eleven

:beer::money::beer:

Gorgeous_George

Zammo wrote: »

So what's going to happen when all the Johnny come lately BTL Gazillionaire property gurus come to the end of their fixes???

TIMBERRRRRRRRRRRRRRR!!!!!!!!!11111111one1111!!1111eleven

They either find the money or lose everything - including their own homes. Hopefully most will be on good LTVs or long fixed rate deals. I wouldn't want to see tenants turfed out either.

My BR+0.89% life of mortgage tracker looks better every day.

GG

Zammo

I'd advise any overleveraged BTL "investor" not to click on that link unless equipped with a pair of clean undies.

It makes for grim reading.

:eek:

pickles110564

Zammo wrote: »

So what's going to happen when all the Johnny come lately BTL Gazillionaire property gurus come to the end of their fixes???

TIMBERRRRRRRRRRRRRRR!!!!!!!!!11111111one1111!!1111eleven

:beer::money::beer:

Ours aint fixed, dont know how we cope:rolleyes:

Pennywise

What isn't being publicised yet is the side-effect of starting to sell a rake of BTL properties. This is ever more likely if landlords can't afford the mortgage repayments - they'll sell one or two to reduce their indebtedness. Obviously they have to plan carefully - probably sell on a last bought first sold basis as earlier purchases are already remortgaged to buy later acquisitions. Problem is that the ones sold (assuming bought a while ago, so made a profit) will create a capital gains tax liability, making the situation worse, and perhaps even leading to having to sell even more properties, not only to repay debt, but also providing for the tax bill. I clearly remember this being a major problem in the early 90's when multiple BTL-ers had to extract themselves from unservicable levels of debt - however there were far fewer in those days. Dark days ahead for landlords!

pickles110564

Pennywise wrote: »

Dark days ahead for landlords!

And you base this on what, all the sucessful LL's I know are looking very positivly at adding to their BTL's very soon.

UK007BullDog

Some of the BTL's I know started in 2006 to remortgage their properties and release equity to build up a war chest, ready to pounce when the market "crashes".

The media is doing its part to talk us into a crash and recession. There are far less properties on the market now than in the last few years. So demand for housing keeps prices up or stops a crash. The houses which have lost most value were those in areas struggling anyway as far as I see (not an expert so dont flame on this).

The only people with major big job losses are those connected with mortgages. They are skilled enough to find other jobs.

But what can bring us to our knees is this food shortage world wide.