BTL Mortgages 2013

[vetran]

Of course a loan is a product. It's surely not a service. I can buy a loan, and sell it to someone, and make a profit in doing so. It's an entity not an ongoing service.

unfortunately it isn't, you may resell the risk on the mortgage but the contract between you and the householder remains.

You sell your car and its gone.
You Finance someone's car and its not done until all the money is paid and the ownership transferred.

It seems that anything that allows the banking sector to assume a veneer of respectability is in.

[doodab]

Of course a loan is a product. It's surely not a service. I can buy a loan, and sell it to someone, and make a profit in doing so. It's an entity not an ongoing service.

Except that what you are buying and selling isn't what was delivered to the end user. You're buying the risk and reward of providing them with the service they paid for.

[Martin@AS Financial]

Presently you really need a minimum of around a 25% deposit. There are a few 20% mortgages available (see what i did there) but the rates aren't great.

Rates are starting at around 3% (75% LTV - less with more deposit) which is historically low for BTL. As with anything, you need to look under the surface of the headline rate as some providers are charging eye watering fees - eg 3.5% of the loan size. Essentially, all this does is front load the rate significantly so calculating the total cost of borrowing is vital.

When considering property, ideally you want to be looking at a 5% rental yield of the purchase price. For your own piece of mind factor in at least 125% rental to mortgage coverage so if anything goes wrong such as the boiler, you have built a war chest to get it fixed.

[Martin@AS Financial]

Big things are expected for the BTL market this year:

Buy-to let lending looks set to pass boom peak in 2013

[d000hg]

BTL is booming here, but it's a university city and the city is very small compared to the university size.

We have the problem that every time a house comes on the market, BTL investors swarm all over it, planning how a lovely 3-bed family house can be ruined by turning it into a 6-bed POS that nobody else would ever want to buy again.

[eek]

BTL is booming here, but it's a university city and the city is very small compared to the university size.

We have the problem that every time a house comes on the market, BTL investors swarm all over it, planning how a lovely 3-bed family house can be ruined by turning it into a 6-bed POS that nobody else would ever want to buy again.

That's worked really well elsewhere until the university bring in private sector builders to build new high quality flats and improve the quality of housing.

Granted outside the newer campuses (Stockton) the uni has a reputation which means quality of housing is not a deciding factor when choosing it but personally I wouldn't risk a student BTL investment. People elsewhere have found out how quickly a university can add 1000 or 10,000 student rooms without too much effort.

[d000hg]

There isn't really space to do that - there are a few blocks of flats and they even built a brand new college - but all the space in the city is already full of housing so it would have to be outside the city where there is no shortage anyway... students simply want to be in the town centre.

Given students are already looking in February for their houses in October, and windows have signs "this house is not for rent, go away", this tells you a lot.

It helps most landlords bought when prices were 1/3 what they are now, they must be raking it in.