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TODAY'S OTHER NEWS

BTL mortgage searches drop to 18%

Buy-to-let is no longer the investment of choice for some people, new data suggests. 

The buy-to-let share of all online mortgage searches has dropped to just 17.99% versus 65.94% for standard residential searches, which is down significantly on recent highs of 24% of all mortgage searches, according to research by Twenty7Tec.​

The long-term average for buy-to-let searches stands at 19.78%, figures from the mortgage technology provider show. 

Reflecting on the mortgage market statistics for the week ending 30 May 2020, James Tucker, CEO of Twenty7Tec, said: “There are some broader macroeconomic challenges ahead – including the changing terms of the mortgage holiday and furlough and how these will affect employment rates, and household incomes and finances and the supply and demand in the housing market. 

“As we navigate through the coming weeks, we will continue to issue weekly figures to make sure that buyers, intermediaries and lenders are all best placed to make the right decisions.”

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    Letting has become a big expense and a huge risk now with constant government interference and everchanging legislation, difficulty evicting bad and antisocial tenants, with huge financial losses, And then there are the constant landlord bashing from many groups. Who would bother being a landlord now, only the foolhardy. There are a much better investment and fewer risk opportunity out there now.

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    PLEASE...QUICKLY.....
    Tell me an investment that will give you approximately 4/7% growth per annum on capital, coupled with pretty much 100% capital protection AND an annual income from rental payments in the average range of £6K to £36K depending on area and house type.

    If you can, then you must be incredibly rich. Oh! unless, of course, you are a Landlord!

  • Paul Barrett

    For the vast majority of us little people in our investment timelines property remains a far more effective investment vehicle than anything else.
    Especially residential lettings property of all types.

    Granted there are issues as regards being able to get rid of rent defaulting tenants.
    But there are ways these problems may be solved albeit requiring tenants of far higher quality than LL have traditionally accepted.
    It just means LL have to be super cautious when it comes to taking on tenants.

    This is the hardest part of lettings.

    FHL obviously doesn't have the same risks but it does involve risking void periods which is why many LL prefer normal residential lettings on AST.

    Rent controls will be the catalyst for the leveraged part of the PRS to disappear.

    So no more BTL mortgages as it won't be possible with rent controls.

    As and when the new penal regulations are introduced I'm not sure that BTL will be seen as viable anymore.
    S8 would need to be massively improved to give lenders the same confidence that S21 has done.


    I am very surprised at lenders still offering high LTV BTL mortgages.

    With the increasing difficulties of getting rid of duff tenants I would have thought lenders would have reduced maximum LTV to no more than 50%.

    Surely lenders are aware of the enormous financial distress that many LL are in following their tenants refusing to pay rent.

    I would consider that many LL are selling up and consolidating much reduced debt with fewer properties.

    Many LL are simply remortgaging with existing providers who are desperate to hang onto their market share.
    So no new mortgage searches will be evidenced.
    With millions soon to lose their jobs there will be massive turbulence in the property market as many OO are bankrupted and repossessed.
    The economic realties of this CV19 haven't hit yet.
    Everything is in suspended animation.

    When employers have to contribute to furlough ed wages that is when the redundancies start.

    Employers will be requiring massive changes in contracts and working practices.
    The situation with BA will be replicated across industry.
    Employers need to be able to pay less for more flexibility.
    This makes such employees not very good mortgage or tenant risks.

    There will in coming months be floods of distressed property sales.
    Those rich LL will be able to buy with no mortgages required.
    It is my contention that the BTL sector will massively reduce.
    Many fomer BTL LL will just become unencumbered ones.

    There will perhaps be a mass exodus of Londoners to far away from London as they are allowed to WFH.
    Commuting daily into London for many London workers will be a thing of the past.
    Such a major change in working practices will cause massive upheavals in the property market.
    I predict that coastal areas will see a large uplift in values as Londoners evacuate out of diverse London to the far less diverse coastal areas.

    As long as it is possible to reach London by train within say 2 hours those are the areas that will see value uplift.
    LL I reckon will be planning to sell and then invest in coastal areas which are currently vastly undervalued.
    If you want to avoid polluted cities then coastal living has its merits.
    There will be no return to the BTL industry as it was.
    It will remain very subdued to the point of eventually disappearing apart from remortgage business.
    BTL only really works with quality tenants.
    Vast numbers of tenants have proven how feckless they are.
    To not even be able to sustain loss of income for a few months just proves how tenuous most tenant finances are.

    LL need far better tenants than these if they are to financially survive.

    It does seem that across society as a whole there is very little financial resilience.
    This has been fully exposed by this CV19 crisis which has revealed how precarious the letting business model is.

    It is hardly surprising therefore if BTL mortgage searches have declined so much.
    Lots of LL are considering their positions!


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    How do you define the quality of tentants? The class of the inhabitant?

    You always seem to complain that one month of missed rent would leave you unable to pay your mortgage. To use your words, have you not heard of saving for a rainy day? You strike me as being rather reckless.

     
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    BTL is still a good investment vehicle if done properly , buy for cash, or very low LTV (less than 50% LTV) buy locally where you can keep an eye on what's going on, be prepared to get your hands dirty cleaning, painting and repairs, take a long term view, and be very careful who you rent to, no students, no one under 25, no single mums, no one on benefits, and no all day curry eaters, oh yes and avoid London at all costs.

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    Further interference by Government to do as much damage as possible to Private sector housing. Housing Secretory Mr Robert Jenrick announces he is going to force LL's to accept, does he not know some tenants are like animals themselves and haven't we already too much to cope with following continuous interference and constantly battering, this is more of the same rubbish. I can't understand why he is Housing Secretary or even in House of Commons unless as a tea boy.
    He says he is going to revise the Model Tenancy Contract to reflect this change, does he not know this Tenancy Agreement is unworkable & should be confined to the dust bin, 45 pages of nonsense that cannot be used, is there not anyone left in Government that have a clue about anything other than helping Big Developers to make a killing, filling their pockets, while driving out Private LL's . I suppose we were all born equal & that's where it ended super taxes for us,super Stamp Duty + a Mountain of Regulations, no problem for big developers every concession under the Sun to Build stupid Flat not required to destroy traditional private LL's + for their green horn buyers roping them in with small Deposits, half the money interest free for 5 years and no Stamp Duty at all whatsoever. This is not a level playing field just collusion & corruption on a massive scale, shame on you.

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