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Housing market

mandryka said:
Ah, well in that case, if the business plan means that the rents have to double to make a decent profit, then obviously the landlord will evict the tenant and sell the house. They may not sell at the top of the market, but it's better than being trapped in a loss making concern. What will happen to the tenant is anyone's guess.
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The landlord sells into a falling market and if new to the job they could well be in negative equity, tricky balance for some.

Sometimes a decent tenant could be an asset if you're scraping up deals for your pension.
 
dweezil said:
The landlord sells into a falling market and if new to the job they could well be in negative equity, tricky balance for some.

Sometimes a decent tenant could be an asset if you're scraping up deals for your pension.
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Yes, people with new BTLs are potentially between a rock and a hard place. The real question is: is there a clear vision of light at the end of the tunnel, an end to losing money, either through raised rents or through lower loan repayments. You also have to factor into the equation the unknown cost of EPC C. BTL businesses have always needed capital for maintenance, and I think they will need more and more over the next few years. For some, the business plan will look like nonsense. Low income, high costs for the foreseeable future. They'll decide it's better to cut your losses.
 
clivem2 said:
Agreed. If a landlord is very highly leveraged without long term fixes in place then they’ve taken a massive risk. There’s no way rents should go up because their risky business model has failed. Other less leveraged or better protected landlords won’t have such an issue.
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Lots seem to take 2 years fixes for the flexibility it offers.

Also remember alot of BTL owners also have high debt levels on their own house. Leveraging was all the rage as interest rates were going to be low forever right...and sure if they started to creep up you could just sell the odd house...Whoops!!

Nothing happens slowly in this post 2008 economic mess
 
Ponty said:
I’m getting a feeling we’re being primed for a mortgage bail out package. Gas / electric bills have gone off the news, it’s clear the next crisis will be mortgages. I can’t see mass defaults / repos being allowed to happen, not just owner occupiers but landlords / tenants. Another huge govt intervention with money they haven’t got?
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I can see us bailing out owner occupiers because we don't want them to be homeless. The bailout can be secured on a lien negotiated with the lender. Commercial landlords though, no chance. They're a small business and nobody bails them out. In addition, the tenant won't be evicted because their contract is with the house owner not the mortgage lender. They still have a right of residence that is nothing to do with the mortgage situation. The only difference is that if/when the place is repossessed or resold they pay their rent to the new homeowner, the place is sold with a sitting tenant with the usual tenants' rights. The BTL mortgage owner will take a bath, but given the populatity of BtL landlords is currently slightly lower than that of child molesters I can't see too many crying about that.
 
stevec67 said:
I can see us bailing out owner occupiers because we don't want them to be homeless. The bailout can be secured on a lien negotiated with the lender. Commercial landlords though, no chance. They're a small business and nobody bails them out. In addition, the tenant won't be evicted because their contract is with the house owner not the mortgage lender. They still have a right of residence that is nothing to do with the mortgage situation. The only difference is that if/when the place is repossessed or resold they pay their rent to the new homeowner, the place is sold with a sitting tenant with the usual tenants' rights. The BTL mortgage owner will take a bath, but given the populatity of BtL landlords is currently slightly lower than that of child molesters I can't see too many crying about that.
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It’s absolutely everything to do with the mortgage lender in a default with tenant situation. It’s why the period of an AST is capped, so they can repo, get the tenant out and sell. Banks will be calling the shots, be in absolutely no doubt about that. They can be a bit tolerant and nice at a 1% IR, when a debt is racking up at 6%+ and their asset is dropping in value, they won’t be hanging about.
 
Ponty said:
It’s absolutely everything to do with the mortgage lender in a default with tenant situation. It’s why the period of an AST is capped, so they can repo, get the tenant out and sell. Banks will be calling the shots, be in absolutely no doubt about that. They can be a bit tolerant and nice at a 1% IR, when a debt is racking up at 6%+ and their asset is dropping in value, they won’t be hanging about.
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Hey, but banks are our friends right??
 
stevec67 said:
I can see us bailing out owner occupiers because we don't want them to be homeless.
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I can't. In most cases the loan can be extended for lower int. monthly payments. I don't see a correlation between artificially (war-related) high rates of energy affecting all and individual financial agreements with lenders who own whatever proportion of the property secured.

In the very early nineties there was a bloodbath of mortgage payment failures leading to repossessions leading to lower house prices following a boom. People got burnt but things were on the up just 4 years later. As maturity of fixes take time to fall due, it's only those on variable rates likely to suffer in the short term. Everybody and his dog now agrees that property (houses mainly) will start to fall early next year. Stress testing by lenders since '08 probably means that there's plenty of equity margin before things get silly; however........, if it's not exactly arm ageddon, we're certainly out on a limb (!!!) re. foretelling the medium term.

I'm guessing here, but I doubt that the vast majority of mortgagees even think about reducing their debt whenever an opportunity arises. Surplus cash? Holiday of splurge it on sth unnecessary (not hifi of course; there are exceptions ! ;))
 
You can bet Mike that minds have now been refocused on reducing that debt . Any monies put away for improvement in epc will be used instead to reduce debt
 
matt j said:
You can't opt out if you voted Tory at any point in the last 12 years. Dems da rulez.
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OK that's my "Get out of jail free" card then??? I've not voted Conservative since I moved up to Scotland so that's at least 22+yrs ago. Where can I sign so my money is safe??? o_O

Regards

Richard
 
stevec67 said:
I can see us bailing out owner occupiers because we don't want them to be homeless. The bailout can be secured on a lien negotiated with the lender. Commercial landlords though, no chance. They're a small business and nobody bails them out. In addition, the tenant won't be evicted because their contract is with the house owner not the mortgage lender. They still have a right of residence that is nothing to do with the mortgage situation. The only difference is that if/when the place is repossessed or resold they pay their rent to the new homeowner, the place is sold with a sitting tenant with the usual tenants' rights. The BTL mortgage owner will take a bath, but given the populatity of BtL landlords is currently slightly lower than that of child molesters I can't see too many crying about that.
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They will be evicted using section 21.
 
Renting in London looks to be a nightmare. I read recently that rents were up by 16% this year.
My nephew recently got a new job here and has eventually found a one bed in New Cross for £1200 a month for him and his partner. Works out to be about 57% of his take home pay before taking into account Council Tax and bills. She'll be studying but has arranged a waitressing job.
Along the way he saw a fair number of dumps, came across a few scams and found numerous advertised properties had already gone when he phoned. One place, he was amongst 14 viewers booked to see the place, who were then asked to make offers to the landlord.
 
hifinutt said:
Somewhat irritating as have to sell 2 properties in next 9 months !!
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If the price remains the same, it will effectively have fallen by ten percent even if the ticket price remains the same. This is the corrosive power of inflation and of course Tory inflation is the worst kind.
 
Ponty said:
It’s absolutely everything to do with the mortgage lender in a default with tenant situation. It’s why the period of an AST is capped, so they can repo, get the tenant out and sell. Banks will be calling the shots, be in absolutely no doubt about that. They can be a bit tolerant and nice at a 1% IR, when a debt is racking up at 6%+ and their asset is dropping in value, they won’t be hanging about.
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Yes.
Same as if it were sold to someone who wanted to live in it, isn't it?

Richard Lines said:
Can this "us" opt out of this? This "us" is getting fed up of bailing others out - just asking for a friend?

Regards

Richard
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Get in line, I'm still waiting for my Brexit opt out.

mandryka said:
They will be evicted using section 21.
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Yes, see above.
 
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