Mortgages

[Woodleyclaret]

Stockbrokers are the scurge of our society
They are the parasitic spawn of Thatcher economics. Grab what you can and sod everyone with their gambling and manipulation of the economy

[Loyalclaret]

Of course we moaned about it, felt low etc, just like people do now, I don't think anyone on here has said any different.
The reason it's being pointed out others have gone through it is summed up in your last paragraph, they want to believe they are the only ones to have gone through a crisis like this

In this broad church, how many have said they are the only ones to have gone through this? They are the ones going through this crisis now, just like you felt the pain the 80/90's

[Lancasterclaret]

In this broad church, how many have said they are the only ones to have gone through this? They are the ones going through this crisis now, just like you felt the pain the 80/90's

This

100% this

And it has to be said, a lot of it is just completely luck (and a bit of hard work and saving) when you buy and sell, when you get the promotion so you can think about moving, when the first kid comes along etc etc etc

I just wish there was a bit more empathy around for the people struggling today from those who claimed they were struggling years ago

[Big Vinny K]

Of course we moaned about it, felt low etc, just like people do now, I don't think anyone on here has said any different.
The reason it's being pointed out others have gone through it is summed up in your last paragraph, they want to believe they are the only ones to have gone through a crisis like this

Do they ?
What makes you think that ?
Is that what you thought when you were struggling ? You thought that you were the first generation to ever have gone through a crisis ?
That makes no sense whatsoever. I have never heard anybody say what you are alleging. Do you really think this generation are that stupid and uneducated ?
For a start the vast majority will have seen their parents and grandparents struggle at some point.

Just don’t understand the point you are making. But it is one of those made up Monty Python type myths that those who seem to lack empathy seem to churn out.

“Hardship with their mobile phones and hover boards. Try living in a puddle”

[Nori1958]

In this broad church, how many have said they are the only ones to have gone through this? They are the ones going through this crisis now, just like you felt the pain the 80/90's

Like I pointed out previously I said....some
You only have to watch a news article on the subject and at least one person will be complaining that it's worse than it's ever been etc etc
Some posters claim there's a lack of empathy on here to those struggling, which I don't get, most of us have family who've been through it, or going through it....pointing out that previous generations have gone through the same is not a lack of empathy, it's just pointing out the bloomin obvious, which presently some folks don't like to hear.

[Jakubclaret]

Of course we moaned about it, felt low etc, just like people do now, I don't think anyone on here has said any different.
The reason it's being pointed out others have gone through it is summed up in your last paragraph, they want to believe they are the only ones to have gone through a crisis like this

I think the previous generation were more resilient & adapted to change better, every generation have gone through periods of difficulty for sure, what’s happening I don’t even think it is a crisis, we aren’t involved in any wars, nobody is under any kind of threat, generally speaking if you go about your business quietly away you are left alone well I am. I blame the media for exaggerating a lot of this & trying to cause angst amongst the population.

[Big Vinny K]

Like I pointed out previously I said....some
You only have to watch a news article on the subject and at least one person will be complaining that it's worse than it's ever been etc etc
Some posters claim there's a lack of empathy on here to those struggling, which I don't get, most of us have family who've been through it, or going through it....pointing out that previous generations have gone through the same is not a lack of empathy, it's just pointing out the bloomin obvious, which presently some folks don't like to hear.

They might be saying it’s the worst it’s ever been for them personally but not sure they are saying it’s the worst it’s ever been.
But since you are saying that there is a least one person saying this on every news on article on the subject should be pretty easy for you to provide an example or link ?

Again when you say some folks don’t like to hear that other generations have also struggled maybe it’s because you are pointing out the blooming obvious ? I don’t know of one person who has ever disputed the fact that this is not the first generation to have struggled. Certainly nobody on this message board as far as I can see.

You may have empathy but isn’t there comments on this thread with stuff like “I have no sympathy” ?

Again I don’t see the point of why you are bringing up things we all know have happened in the past to many of us and our families. Though from other posters comments bringing up the past it’s not that hard to see why they are bringing this up.

[ClaretDiver]

I have considerable sympathy for the homeowners who are struggling right now to keep food on the table and ultimately a roof over their heads.

The people I don’t have sympathy for is those who have 1 or several buy to let mortgages. These people are mainly responsible for rental prices increasing as they have taken on heavy debts and obviously pass the burden into
The renter. All it takes is one bad tenant or a property lying empty for a few months and the whole house of cards comes crumbling down.

I think the rental sector is going to have a complete overhaul in the next few years. I know a lot of landlords who are going to be off loading rentals soon due to new regulations coming in regarding antisocial bonds, environmental upgrades etc.

For example, we own a rental bungalow in our small village, an old miners bungalow. We recently received a bill from the council for £500 to ‘allow’ us to continue renting it out…some form of licence as the area deemed it necessary. Thankfully our daughter is in their and we don’t have to pay it due to it being rented to family.

Once they move out we are selling it due to the hassle…that’s one less property for rent on the market.

What is wrong is that someone who had paid £700 a month in rent for several years can’t get a mortgage to invest in their own property with a mortgage that may be less than that amount and secured against said property…

[fatboy47]

I know a lot of landlords who are going to be off loading rentals soon due to new regulations coming in regarding antisocial bonds, environmental upgrades etc.

Not my experience. Not even close.

It's never been better as far as I'm concerned, and I'm far more likely to be increasing my portfolio than selling anything off.
Prices falling/rents increasing significantly....the agent takes good care of all the red tape nonsense.
With inflation running riot it's one of the best bets out there.
Well done for squeezing money out of your daughter btw... I'd be lynched if I tried that.

[Lowbankclaret]

It’s not 1979 any more

Correct , but the point made is correct.
However in 1979-80.
No such thing as mobile phones, some didn’t even have house phones.
No internet to pay for.
No TV subscriptions to pay for.

Fair amount of people didn’t have gas or central heating

All now regarded as necessary in the 2020’s and expensive ones too.

[aggi]

I wonder if the previous versions of this discussion included things like no wonder they can't afford their mortgage if they're paying for electricity and running water, we didn't need that in my day?

[aggi]

You are probably right. I’ve had to go north (Cheshunt area) so technically just outside London albeit 25 min train into Liverpool Street where I work.

Ah yes, I was round there the other week at the nature reserve. I think there's been a bit of a knock-on from the Tottenham Hale redevelopment at places up that train line.

[Lowbankclaret]

I think the rental sector is going to have a complete overhaul in the next few years. I know a lot of landlords who are going to be off loading rentals soon due to new regulations coming in regarding antisocial bonds, environmental upgrades etc.

For example, we own a rental bungalow in our small village, an old miners bungalow. We recently received a bill from the council for £500 to ‘allow’ us to continue renting it out…some form of licence as the area deemed it necessary. Thankfully our daughter is in their and we don’t have to pay it due to it being rented to family.

Once they move out we are selling it due to the hassle…that’s one less property for rent on the market.

What is wrong is that someone who had paid £700 a month in rent for several years can’t get a mortgage to invest in their own property with a mortgage that may be less than that amount and secured against said property…

Will have mentioned before, friend of mine had 4 rental properties about 3 years ago. He now has two and as each tenant moves out he will be selling them too. Landlords with just a few houses struggle to make a profit anymore.

With the new regulations as you said it’s going to be even harder.

My friend believes the Tories are deliberately trying to drive small time landlords out of the industry, leaving it for the big companies to control.

[Lowbankclaret]

I wonder if the previous versions of this discussion included things like no wonder they can't afford their mortgage if they're paying for electricity and running water, we didn't need that in my day?

Just pointing out, things have changed.

[aggi]

Just pointing out, things have changed.

It wasn't aimed specifically at you. More the you can't complain about not being able to buy a house if you've ever spent any money on enjoying yourself crowd

[Foshiznik]

Whether you struggle now or did in the era of higher interest rates, the fact of the matter is we suffer whilst the rich (who usually cause the crises) get richer.

It shouldn't be a dick measuring contest between ordinary hard working folks from each generation.

[Foshiznik]

What is wrong is that someone who had paid £700 a month in rent for several years can’t get a mortgage to invest in their own property with a mortgage that may be less than that amount and secured against said property…

For full disclosure, this is my current situation. I've just managed to save enough for a deposit (well will have by around september/october) but now, it's not that mortgages are too expensive for me (at least on a monthly price), it's the fact the bar has been raised for approving a mortgage and if you are fortunate enough to be approved, you are fixed in these higher prices for at least 2 years. The fact i've been paying for the mortgage of someone else and more monthly for the last 8 years in a very stable relatively well paid job means nothing to the banks unfortunately when looking at affordability.

[Rick_Muller]

For full disclosure, this is my current situation. I've just managed to save enough for a deposit (well will have by around september/october) but now, it's not that mortgages are too expensive for me (at least on a monthly price), it's the fact the bar has been raised for approving a mortgage and if you are fortunate enough to be approved, you are fixed in these higher prices for at least 2 years. The fact i've been paying for the mortgage of someone else and more monthly for the last 8 years in a very stable relatively well paid job means nothing to the banks unfortunately when looking at affordability.

yup... that stinks.

My experience last year was this. We got rejected for a 10 year fixed rate at 2.43% based on "affordability" yet got accepted for a 10 year fixed at 2.79% just a week later - apparently because the affordability measures changed in that one week. In reality the lender wanted to scrap that offer and make more money out of us with a "new" offer. The difference for us with the value of our mortgage meant instead of £1400/month repayment it is now £1600/month - can someone please explain why we couldn't afford £1400/month yet can afford £1600/month? (clue... its just a steal by the banks right)

[Foshiznik]

yup... that stinks.

My experience last year was this. We got rejected for a 10 year fixed rate at 2.43% based on "affordability" yet got accepted for a 10 year fixed at 2.79% just a week later - apparently because the affordability measures changed in that one week. In reality the lender wanted to scrap that offer and make more money out of us with a "new" offer. The difference for us with the value of our mortgage meant instead of £1400/month repayment it is now £1600/month - can someone please explain why we couldn't afford £1400/month yet can afford £1600/month? (clue... its just a steal by the banks right)

Absolute feel your pain but glad you managed to sort yourself out in time. I could understand the doubts of affordability to a certain extent if the rent you've been paying was less than the mortgage but the other way around is just a sign of how far (too far) the other way the banking sector has gone on housing since 2008's crash.

Ironically, I bet the same bank would happily class you as being able to afford high limit low interest credit card, loan or overdraft at similar costs though.

[fatboy47]

My friend believes the Tories are deliberately trying to drive small time landlords out of the industry, leaving it for the big companies to control.

With all due respect lowbank, that really is baseless nonsense. There's never been a better time to be a landlord.
Unless, that is, your business is dependent on a significant level of external funding..banks or otherwise.

[aggi]

With all due respect lowbank, that really is baseless nonsense. There's never been a better time to be a landlord.
Unless, that is, your business is dependent on a significant level of external funding..banks or otherwise.

I'm not a landlord but I wouldn't say that is true from an incentives perspective. Lots of the tax breaks that were given have now been removed for individuals who are landlords (but still present for companies).

[fatboy47]

I'm not a landlord but I wouldn't say that is true from an incentives perspective. Lots of the tax breaks that were given have now been removed for individuals who are landlords (but still present for companies).

That's very true aggi, but tbh the dice are so loaded that other factors far outweigh the tax issues. If you're deploying purely your own capital it really is a no brainer.
If you're in hock to the banks then I'd imagine trying to juggle with interest rates in this climate is a nightmare.

[Lowbankclaret]

With all due respect lowbank, that really is baseless nonsense. There's never been a better time to be a landlord.
Unless, that is, your business is dependent on a significant level of external funding..banks or otherwise.

Well he tells me otherwise.
Three years ago I got him into investing which he has took to very much. Much less hassle and makes you more money than being a landlord.

He tells me the changes like tax on turnover instead of profit had a massive impact.

The removal of no fault eviction, it was the quickest way to get rid of a bad tenant. No landlord gets rid of a good tenant.

I told him to keep his houses and do investing to increase his portfolio and be very diverse. He tells me it’s just not worth it anymore.

He sent me his spreadsheet last year, he made 4% on his invested money in property, including increased value of said properties.

[Lowbankclaret]

That's very true aggi, but tbh the dice are so loaded that other factors far outweigh the tax issues. If you're deploying purely your own capital it really is a no brainer.
If you're in hock to the banks then I'd imagine trying to juggle with interest rates in this climate is a nightmare.

My mate was 25% owned, 75% mortgage.

[fatboy47]

My mate was 25% owned, 75% mortgage.

Yep, fair enough, with that balance.

[Lowbankclaret]

Yep, fair enough, with that balance.

Asked for his comments, will list below

[Lowbankclaret]

Section 24 is legislation that prevents landlord from deducting finance costs from profit. Effectively taxing gross income the only industry in the UK that does this... incidentally, the only other countries that apply tax on gross income are North Korea and Zimbabwe...

Section 21 removal... meaning that landlord HAVE to go to court to get a property back and all the costs and time associated with that... they have to prove contract breach... or sell through property... can be hard to prove contract breach... eg.. Tennant in 6 months arrears... court paperwork states 6 months arrears, then the tenant pays1 month off the day before court... and LL back to square 1

Stamp duty surcharge of minimum 3% when buying a property

CGT surcharge on selling... essentially placing a tax on tax

Have to increase EPC rating to C by next year... could cost £10,000s on properties in North of England terriers rows for example

Have to register on several different databases from next year

There won't be many new landlords coming to markets anytime soon

Interest rates going up are a double hit because thelat might wipe out any profit... AND the HMRC will tax you on the turnover as if you made a profit

There's enough for now could.go on but I'm depressed now

[fatboy47]

Don't jump lowbank!!

But yep... Paints a bleak picture, and like I've said, it's a complex affair if you're using borrowed cash..

[boatshed bill]

Being a private landlord sounds like hell.

[Big Vinny K]

Being a private landlord sounds like hell.

Really depends how you have financed the purchases.
If you have bought your properties years ago at much lower prices and your loans are paid off (or only small) then you are probably doing very well as there have been significant increases in rent in the last couple of years. We are talking 20% increases easily.

The other thing of course is having good tenants. Again because it is so difficult for people to afford to buy houses then there are a lot more long term and reliable tenants.

And finally again if you are a long term landlord who has bought years ago then your properties will have increased in value significantly……and part of the reason for this is the above 2 points….ie rent increases and supply and demand of housing.

[fatboy47]

Really depends how you have financed the purchases.
If you have bought your properties years ago at much lower prices and your loans are paid off (or only small) then you are probably doing very well as there have been significant increases in rent in the last couple of years. We are talking 20% increases easily.

The other thing of course is having good tenants. Again because it is so difficult for people to afford to buy houses then there are a lot more long term and reliable tenants.

And finally again if you are a long term landlord who has bought years ago then your properties will have increased in value significantly……and part of the reason for this is the above 2 points….ie rent increases and supply and demand of housing.

Pretty much my experience Vinny.

[Big Vinny K]

Pretty much my experience Vinny.

That’s good for you. Hopefully you have good tenants because you are a good landlord.

The landlords who might be in trouble are those who jumped onto the bandwagon thinking it was easy money and took interest only mortgages with high loan to value percentages…..and putting in little of their own money.
The change in regulation around interest was maybe unexpected for them but the old adages of not being too greedy and there’s no such thing as easy money hold true with any investment.

The other thing that has burnt a few landlords is buying up multiple properties at low prices in some of the poorest areas. This happened quite a lot in burnley. You can get situations where houses in these areas start to be vacated and boarded up and that impacts on the whole area and very quickly there is a domino impact on the value of the houses. The double whammy is that you either lose your tenants or you have bad tenants.

Personally I’ve thought about buying properties to rent a few times but gone down the route of renovating and high end conversions and selling on instead.
I think now with the way property prices are where I live the investment return on rental income is not enough of an incentive compared to what I can earn just investing it in the bank….for the sake of 4% or 5% difference it’s not worth the hassle and having to pay accountants, letting agents or sorting out the properties / tenants.

If interest rates go back down I might look at it again but good on you for having the right formula !!

[Lowbankclaret]

Don't jump lowbank!!

But yep... Paints a bleak picture, and like I've said, it's a complex affair if you're using borrowed cash..

Like I said quotes from a real landlord.

I just get get 7.2% on my investments now.

[Lowbankclaret]

Being a private landlord sounds like hell.

He is moving into investing and finding ypu can make 20% per year without all the **** being a landlord brings

[Lancasterclaret]

https://twitter.com/PickardJE/status/16 ... 3343450113

Quite

[Lowbankclaret]

https://twitter.com/PickardJE/status/16 ... 3343450113

Quite

Think lots of people have explained or shown that.
Feel sorry for them

[roperclaret]

Being a private landlord sounds like hell.

I have no sympathy. There wouldn’t be a housing Crisis if people weren’t allowed to own more than 2 properties.

[dsr]

I have no sympathy. There wouldn’t be a housing Crisis if people weren’t allowed to own more than 2 properties.

Where would you put all the displaced tenants if landlords were forced to chuck them out and sell up? Are you expecting council housing to pick up the slack?

[roperclaret]

Where would you put all the displaced tenants if landlords were forced to chuck them out and sell up? Are you expecting council housing to pick up the slack?

Nope the cost of houses would crash overnight. It would be a buyers market

[UGR]

Nope the cost of houses would crash overnight. It would be a buyers market

It wouldn’t

[dsr]

Nope the cost of houses would crash overnight. It would be a buyers market

Yes, but who would buy them? If the market did crash because of the destruction of the private rental market and because the council housing wasn't buying them up, then there would be a whole load of tenants who couldn't get a mortgage (too old, or bad credit history, or too little income) who would have nowhere to live.

It's vital that if we want to take measures to reduce the landlord and tenant market, we must remember that the landlord forced to sell merely has to find somewhere to invest his pot of money. The tenant has to find somewhere live. The tenant is far more seriously affected, so we should think first about the tenant before rushing in to restrict the landlord.

[Lancasterclaret]

Interest rates going to go up again - disaster

https://twitter.com/Peston/status/1671404050582044679

Its looking pretty bleak isn't it?

[Jakubclaret]

It'll sort itself out it'll have to, what goes up must come down just a question of when.

[kentonclaret]

Having announced “bringing down the rate of inflation” as 1 of his 5 pledges Sunak is now committed to using the Bank Of England and it’s monetary policy committee to achieve that target, and Interest Rate hikes are their weapon of choice.

[JohnMcGreal]

Other than winding down their quantitative easing program it's their only weapon.

The government has other tools at its disposal, such as raising taxes, not chopping the legs off the economy, boosting £ sterling by looking like a country that knows what it's doing, but I suppose we can't really go there.

[taio]

It'll sort itself out it'll have to, what goes up must come down just a question of when.

The main question is how much damage will be done in the meantime.

[Jakubclaret]

The main question is how much damage will be done in the meantime.

Nothing like the early 1990s the media are stirring things up, it'll reverse itself, the black hole with the furlough payments & the cost of the virus had to come from somewhere.

[Swizzlestick]

Nothing like the early 1990s the media are stirring things up, it'll reverse itself, the black hole with the furlough payments & the cost of the virus had to come from somewhere.

And yet other countries who employed furlough schemes aren’t seeing these inflationary rates.

Talk about the media all you like, real people, real businesses are getting battered here.

[StayingDown4Ever]

Base rate going to go up tomorrow too.

I think it will go up 0.5 rather than 0.25 this time.

[Jakubclaret]

And yet other countries who employed furlough schemes aren’t seeing these inflationary rates.

Talk about the media all you like, real people, real businesses are getting battered here.

I'm not going into politics for obvious reasons I've said it'll sort itself out, you either believe that or you don't. It'll reach a certain level, peak & slowly start coming down & then level off, the interest rates were cut during the pandemic now that's over they are starting to climb.