Reply to: Mortgage firms rush to repossess homes as families feel credit crunch

[BrilloPad]

Why are people still rushing in to make it.

Why are people dumb? Why do they read the Sun?

Cos they are mostly sheep. Sheep get fleeced.

[wendigo100]

That's an awful dumb investment, in my book. Why are people still rushing in to make it.

Advice from the shoeshine boy. He knows a thing or two...

[tim123]

It didn't used to be a gamble, but at the top of the market (which this is)rents are now on average less than mortgage repayments on a 80% LTV mortgage. Great for those willing to subsidize someones housing costs to speculate on an overpriced market.

Yep, My landlord paid 209K for my flat, so it's costing him about 1050 per month to fund, plus 100+ in maintenance fees and insurance. I'm paying 795 in rent (of which the ageccy are going to keep about 100).

My guess is that it could fall in value to 150K.

That's an awful dumb investment, in my book. Why are people still rushing in to make it.

tim

[tay]

Sure, but the main issue here is that people want to get rich quick, so many who bought in the last couple of years must have overextended themselves to get on property ladder, made assumptions that they will have tenants all 12 months in a year etc.

I was respondint to Divers blanket assertion

If you have to mortgage for buy to let, then you are taking a big gamble indeed

Diver must be Jewish or Muslim.

[Bagpuss]

It is not a gambel to take out a mortgage to BTL.

It all depends on your income, equity,the rent return and the interest rate/term you can get.

It didn't used to be a gamble, but at the top of the market (which this is)rents are now on average less than mortgage repayments on a 80% LTV mortgage. Great for those willing to subsidize someones housing costs to speculate on an overpriced market.

[AtW]

one third of BTL owned by companies with more than 100 houses.

Do you think those companies buy those homes for cash? I think not - they must have been raising money via bonds or via other means. Right now interest rates on this finance is going through the roof, while those companies can't pass extra costs on renters because too much B2L available.

[AtW]

It all depends on your income, equity,the rent return and the interest rate/term you can get.

Sure, but the main issue here is that people want to get rich quick, so many who bought in the last couple of years must have overextended themselves to get on property ladder, made assumptions that they will have tenants all 12 months in a year etc.

[BrilloPad]

But surely most of those who entered that market did so by taking out a morgage? I know companies play a fairly big role in it, but in the last few years B2L was growing due to individual investors who were surely taking out morgages.

one third of BTL owned by companies with more than 100 houses.

[tay]

It is not a gambel to take out a mortgage to BTL.

It all depends on your income, equity,the rent return and the interest rate/term you can get.

[AtW]

If you have to mortgage for buy to let, then you are taking a big gamble indeed

But surely most of those who entered that market did so by taking out a morgage? I know companies play a fairly big role in it, but in the last few years B2L was growing due to individual investors who were surely taking out morgages.

[Bagpuss]

If you have to mortgage for buy to let, then you are taking a big gamble indeed

Isn't that what most people do? i.e. use gearing to give high % returns, or rather did. I fully expect SASguru to arrive now and spoil the thread

[Diver]

This all greatly depends on whether you have cash to do the buy, or you need a morgage yourself - I reckon the latter will be pretty limited, especially for B2L market, limited by high interest rates, which will have much higher spread between them and BoE rates.

If you have to mortgage for buy to let, then you are taking a big gamble indeed

[AtW]

Depends on many factors. you decide what you will pay. they understand that you will walk away if they don't drop the price enough, and no chain or waiting for mortgages.

This all greatly depends on whether you have cash to do the buy, or you need a morgage yourself - I reckon the latter will be pretty limited, especially for B2L market, limited by high interest rates, which will have much higher spread between them and BoE rates.

[rootsnall]

A prime development of dock front 2 bed apartments in Liverpool was on offer at 250k last year. A repossessed one just sold at auction for 110k. Nice 140k loss there!

It was front page news in atleast one local paper, just what the developers needed with a few thousand more still to sell. The auction figures for some of the Manchester repo flats were also interesting.

[Diver]

How much below, 5%, 10% or 50%? Market prices are not fixed - they will go down as people will need to sell and others won't be able to get morgage nor want it at current rates in the first place.

Depends on many factors. you decide what you will pay. they understand that you will walk away if they don't drop the price enough, and no chain or waiting for mortgages.