These days, it’s more important than ever to make 100% sure that you have thoroughly understood the numbers behind a buy to let property, particularly when it comes to your mortgage. With this in mind, here is a brief guide to buy to let mortgages.Buy to let mortgages work differently depending on whether or not you are a limited companyEven though lenders assess potential borrowers on the basis of the rental income they (expect to) receive from the property, in a worst-case scenario; they can make a claim against a private individual’s personal property. They can, however, only claim against the assets of a limited company rather than the property of the people who own the company and have to take this fact into consideration when deciding whether or not to do business with them.Landlords with more than three mortgaged properties must have their whole portfolio assessedThis regulation comes into...
Latest figures from the Council of Mortgage Lenders show a fall in the first quarter of this year in the number and the proportion of mortgages in arrears or ending in repossession. A decline was experienced in all arrears bands, and across both owner-occupier and buy-to-let lending.
According to the CML (Council of Mortgage Lenders) there is a continuing reduction in both mortgage arrears and repossessions for the third quarter of 2014.
There is growing evidence that mortgage lending activity, and the housing market, are sitting on a plateau.
The Council of Mortgage Lenders reported that house purchase lending was up 33% in July, compared to last year. It also showed that lending is predominantly for house purchase rather than remortgage.
If you are thinking of renting a home at the moment you may change your mind after this article. Over the past 12 months the UK’s rental properties have soared and many are struggling to find affordable homes to rent.
Growing concerns over the state of the UK’s property market have led to a number of large institutions putting plans in place that would see a curb on the amount of high level mortgage lending being offered to consumers. Mark Carney, Governor of the Bank of England, was recently quoted as saying, “… recovery [of the housing market outside London] is fragile and … it’s important we don’t disrupt this recovery.” He went on to point out high LTI mortgages as being one of the biggest risks to the health of the UK property market.
The Council of Mortgage Lenders today released their Monthly Lending Trends (MLT) press release which covers first-time buyer, home mover, remortgagor and buy-to-let lending. The total new loans for home-owners was up 4% over the month in March and up 17% over the year. Buy-to-let lending increased by 10% compared to February and 56% on last years figure.
April 26th saw the biggest changes to mortgage regulation since the FSA (now the FCA) started regulating residential mortgages back on 1st November 2004 or ‘M-Day’. Aptly named the Mortgage Market Review (MMR) the changes were prompted in response to the financial crisis of 2008/2009 and are aimed at making the residential mortgage market a safer place in the future by placing greater emphasis on advice, affordability and tightening up rules on riskier types of lending. A brief summary of the changes are:- Advice must be given where there is any interaction between advisor and customer (there are some exceptions) whereas previously consumers could opt for a non-advised or ‘information only’ process, in fact prior to MMR some brokers/advisors only offered a non-advised process. Greater emphasis on responsible lending:- o Greater focus on income and expenditure (affordability) o Lending into or near to retirement will be scrutinised to ensure customers...
A recent study reported by the BBC has shown a big North/South divide in terms of total UK mortgage lending.
For those on the fringes of affordability time could be running out to secure a mortgage. There are two reasons for this. The first is something the mortgage industry has been aware of and preparing for for the last couple of years; it’s called the Mortgage Market Review or MMR for short. These are a series of reforms that were set in motion in the wake of the financial crisis of 2008/09 and April 26th is the deadline for compliance with these new rules. However many lenders are implementing the changes throughout the month of April so they can be sure they’re ready in time for the deadline
he CMLs quarterly report on repossessions has shown that 2013 ended with the lowest level of repossessions since the down turn started back in 2007. With a repossession volume of 28,900, this represents a very small 0.26% of outstanding mortgages. Compared to 2012 this is very positive as that year ended with 33,900 repossessions and a 0.30% rate.
The December HPI from the CML has seen a positive end to 2013. Key Facts: Gross mortgage lending was estimated to be £17 bn This is the same as in November, yet it represents a 49% increase against the value see in December 2002 - which was £11.4 bn Highest total for a December since 2007 Total mortgage lending for the year estimated to be £177 bn Over the final quarter, Oct-Dec 2013, there was an estimated £52 bn of mortgage loans, an increase of 5% against the 3rd quarter of 2013. This also represents a 38% increase against the same period (Oct-Dec) in 2012 and is the highest quarterly figure since the 3rd quarter of 2008. Commenting on market conditions in this months Market Commentary, CML chief economist Bob Pannell reports: "Short-term growth prospects for the housing market and the wider economy look very positive. Mortgage lending was...
With 2013 becoming a distant memory we find ourselves facing 2014 pondering the changes that will occur in the property market. Nick Carlile, Managing Director, Platinum Portfolio Builder (PPB), would like to share his predictions for the year ahead when considering UK Residential Property Investment He focuses on the key issues that concern any investors or those contemplating a move into property, which are: Price Price is always at the forefront of any investor’s mind and the subject which generates the most debate! Nicks predictions for this year are that prices in London will begin to slow down (albeit there will be some level of growth) and other areas around the UK will instead experience greater levels of growth. Geographical Areas Nick believes, that for the best investments in 2014 (which provide greater discounts, double digit yields and a good income) the best strategy is to focus further North on...
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Success of Help to Buy could help to stabilise the highest rents. Landlord Assist says demand for the Government’s flagship Help to Buy Scheme coupled with an expected rise in interest rates could be the catalyst for the buy-to-let sector becoming more tenant-friendly. For the past few years the private rented sector has sustained a significant growth period caused by huge volumes of people opting to rent rather than buy because of difficulties in obtaining suitable finance for lenders.
You may have already heard or been affected by the increase by Bank of Ireland in their BTL tracker margins. Well recently West Bromwich Building Society are now effectively copying by increasing their base rate tracker margins by 2% as of December 2013. Property118.com highlighted this back in September but we wanted to make sure that our subscribers were fully aware of the potential for Class Action that is being looked into. Not only might you be affected by the Bank of Ireland or West Bromwich decisions, but who knows which lenders will be next? If youre a landlord with a BTL tracker mortgage the visit Property118.com to register and help fight this case. As Propert118 states you maybe ok today, but what about next week, next month or next year? So register with Property118.com now.
The Council of Mortgage Lenders has reported a steady situation in gross mortgage lending in September, albeit slightly down from £16.4 billion to 16.2 billion. However this does represent a 41% increase on the lending of September last year.
The Council of Mortgage Lenders (CML) reports that Gross Mortgage Lending is up in April, increasing to £1.2 billion - a 4% rise from March. Main Points from the commentary: The focus of recent changes to the funding for lending scheme is on lending to smaller businesses, but the time extension should reassure firms that they can enjoy access to funding on reasonably favourable terms through to early 2015. Stronger house purchase lending continues to underpin mortgage lending more generally, but the underlying picture overall is one of reasonable rather than dramatic recovery. Commenting on market conditions in this months Market Commentary, CML chief economist Bob Pannell observes: "Our forward estimate is that gross lending in April was £12.1 billion. This would have been 4% up on March. The comparison with April last year – 21% higher – is flattered by the temporary dearth of house buying activity immediately following the closure...
As costs rise and incomes stagnate, first-time buyers may feel they are relegated to paying rents to live. Those who do manage to find enough deposit money however, must identify the best financial package for their circumstances including where to source their property! If you answer these 5-simple questions positively, you will be reassured you could progress successfully to becoming a property owner. 1. Is My Bank Account Clean? ~ If your bank statements balance more often than not, it shows you are actively managing your money; something lenders like to see. Lenders normally want at least 3-current monthly statements showing your income and expenditure. Though an overdraft may reduce the maximum loan you could obtain, in itself it is not a problem provided it is not out of control. Unpaid cheques, direct debits or excessive bank charges are red-flags. 2. Can I Get A Mortgage? ~ Paying a lender administration and survey fee only to be turned down is really frustrating and...
Landlords have had a tough time obtaining mortgages after the market peak in 2007, as lenders rapidly withdrew from the market. In fact, even with the current mini-boom, lending to landlords is about half of what it was six years ago.