Buy-to-Let DOOM

[AtW]

Middle-class 'buy-to-let dream' is over - as mortgage lenders to demand 40pc deposits

"Investing in buy-to-let property is on the verge of becoming unaffordable for middle-class savers as stricter lending rules mean they will soon need at least a 40pc deposit to qualify for a mortgage, Telegraph analysis reveals.

New, tighter lending criteria set to be enforced as early as this autumn by the Bank of England will lock large groups of savers out Britain's rental market, and limit it to an elite club of wealthy investors only.

Under the new system borrowers are likely to have to find nearly twice as much money for a down payment on a property than at present, as around half of buy-to-let mortgages sold today only require a 25pc deposit, according to figures from Mortgages for Business, a broker.

Until recently middle-class savers have helped fuel a buy-to-let boom in Britain with thousands funneling their life savings into buy-to-let to help fund their retirement."

Source: Middle-class 'buy-to-let dream' is over - as mortgage lenders to demand 40pc deposits

Serves them right for voting in supposed Consevatives!

[DimPrawn]

Komrade Korbyn is big supporter of aspiring middle classes. BTL would be compulsory, with 15 in Gulag for not owning at least 10 properties.

[b0redom]

As most people are probably interest only on B2L this could get really ugly come the end of fixed/discounted period.

[eek]

As most people are probably interest only on B2L this could get really ugly come the end of fixed/discounted period.

Could? I think the answer is will. Especially given the tax changes that are occurring at the same time...

[RetSet]

Middle-class 'buy-to-let dream' is over - as mortgage lenders to demand 40pc deposits

"Blah blah..."

Source: Middle-class 'buy-to-let dream' is over - as mortgage lenders to demand 40pc deposits

Serves them right for voting in supposed Consevatives!

Facts:

1) Notional interest rate used for 'stress test' is going up from 5% to 5.5% with most lenders
2) Mortgage cover ratio is going up from 125% to 145% (some lenders, by no means certain that all will go up that far)
3) Loan to value ratios unchanged at up to 80% (although 70% & 75% are much more common).

All this is doing is formalising the common sense that you don't over gear in areas where yields are tulipe.

[AtW]

All this is doing is formalising the common sense that you don't over gear in areas where yields are tulipe.

Yes, this means that desperate BTL owners trying to sell in those areas won't be able to do so since there won't be any buyers who can get mortgage.... other than wealthy sovereign funds from Saudi Arabia, Norway...

[AtW]

Komrade Korbyn is big supporter of aspiring middle classes. BTL would be compulsory, with 15 in Gulag for not owning at least 10 properties.

By 2020 Osborne will make sure there are no middle classes in Britain to be captured by the Labour.

HTH

[RetSet]

Yes, this means that desperate BTL owners trying to sell in those areas won't be able to do so since there won't be any buyers who can get mortgage.... other than wealthy sovereign funds from Saudi Arabia, Norway...

Nope, no need to be a desperate BTL owner. There is already a mortgage on the property. Judicious use of Lease Options/ EDCs (Exchange with Delayed Completion)/ Instalment Contracts leaves the existing mortgage in place to provide finance for the purchaser.

[jamesbrown]

By 2020 Osborne will make sure there are no middle classes in Britain to be captured by the Labour.

HTH

Captured, yes. Tied up, normalized, etc.

But Corbyn is realistic. For now, he's focused on winning over his Islington book club, Pooh Corner.

[AtW]

leaves the existing mortgage in place to provide finance for the purchaser.

Why would bank allow existing mortgage given under old cheap conditions to new people who should be paying/stress tested at much higher levels?