BuytoLet news round up

It is outrageous that the interest rates offered are the same as in 2008.
BTL Mortgage rates should be 1.5 % ABBR fixed for say 40 years.
6 % interest rates are of NO use to man or beast.
When will the govt make mortgages available based on the traditional lending ,margin of 1 %.
Banks if they use this 'cheap' money will be making 4-5% margin; unheard of in any mortgage business.
Pray tell how does this pass on the benefit of the low BOE interest rate to consumers.
We need to cut the banks out of the equation and borrow directly from the BOE or from any lender willing to pass the full effect of the cheap money onto the consumer whilst still retaining a 1% margin.
Trouble is this will NEVER happen and so this country's property market will remain moribund for decades!!

You've made a similar comment before Paul and as I said then, 1% or even 1.5% margins over bank base rate were never the norm, they were suicidally low for a very brief period in history. It's now swung slightly the other way as I suggest the natural margin for profitable prime BTL lending is 2% to 3% over LIBOR and we are currently experiencing SVR's at 4% to 5% over LIBOR. What is outrageous is arrangement fees. The natural level for those is 1% to 1.5%. It would appear that your figures are based on about a 7 year window in history whereas my "natural levels" are based on 30 years plus averages.

Not sure about your contention re margins.
BS always offered mortgages at roughly1% ABBR.
Greedy banks charged more.
LIBOR as a mechanism is useless if govt wants to ensure low cost money reaches the consumer.
Quite frankly the govt should buy out the remaining of RBS and then lend at 1% ABBR IO for 30-40 year terms.
If private lenders won't pass on cheap money to consumers then the govt will have to do it in the form of a state bank.
When the private banks see the state lending at 1% ABBR then they will lend at similar rates or risk losing business.
There is NOTHING suicidal about low interest rates.
Low wages are causing the situation where higher rate loans are unaffordable especially as wages will not be increasing anytime soon.
What do banks do with all the profiteering interest they make.
Gamble it on the money markets and then have to be bailed out by the govt because they got their bets wrong.
Fees are blatant profiteering.
Why should any fees be paid for borrowing money in the form of a mortgage.
If I buy a car from a dealer I don't get charged fees for having the temerity to buy a car.
The lender just loans the money after the appllication is accepted and then charges interest.
It is part of the lenders business to carry out the admin for such loans.
Admin is part of the cost of a lender being in the loan business.
They build those costs into their business proposition.
A borrower should not be paying for those admin costs.
That is part of the costs of doing business for the mortgage lender.

At 1% margin a lender would make £1,000 a year gross on a £100,000 loan. Out of that they have to pay for staff, compliance, collection, offices, marketing etc. The default rate on BTL is about 1%. That's a very, very simple overview Paul. Please do the maths.

Your car dealer analogy is equally flawed. If you buy a car the profit margin is in the sale of the car for the dealer, just as it is in the sale of a house for a property developer. You expect to pay extra to maintain your car and your house once you own it don't you?

Well irrespective of that BS lent at such margins for years and they made a profit.As for the car analogy if I choose to spend money on maintaining a car that is my choice.
I do not expect to be charged by a car dealer for just purchasing a car apart from the sale price.
Often cars are sold at a loss or very little margin as the manufacturer wants to improve figures of sales.
Nothing is obvious concerning a sale price.
But still the fact is if I purchase a car for £10000, I don't expect to be told that to be able to buy the car at the sale price I have to pay an additionbal £2000 in fees.
This is what mortgage lenders are doing
Charging fees when carrying out their normal business activity of selling mortgages.
I am not the slightest bit interested in their costs of doing business, I want the best mortgage product for me with the interest being the ONLY ongoing costs for me to have the product.
That is what a mortgage is, along term loan on which interest is paid, nothing else.

Good luck 🙂

Too true especially as I am technically bankrupt!!.
I will NOT be able to ever obtain another mortgage in my lifetime.
It is just manifestly unfair that new LL and FTB cannot gain access to the govt cheap money as the banks add excessive margins which makes the supposed cheap finance still unaffordable.
Without new entrants the market effectively freezes.
Exit strategies become somewhat awkward if you cannot sell or remortgage.
I am sure that in 19 years time my property value will not reach the price I paid for the properties.
I hope to gradually increase the mortgage debt so that the mortgage debt exceeds the the original mortgage.
Then the properties will be forced sold by the lender who will then try and recover from me any shortfall, not a chance!
Lots of LL are in my position.
Refusal to provide affordable finance means the banks might gain on one hand but they will more than lose out with shortfalls on the sale prices of properties which cannot be sold without loss by lenders because buyers cannot be found due to unaffordable finance.
Banks are idiots they just don't get it.
I've had 2 properties repossessed due to wrongun tenants and losses amount to £100000.
They come to me to pay the shortfall.
Losses were caused by £11000 of mortgage shortfalls.
Lenders are idiots.
They will never be paid.
All they had to do was capitalise the shortfalls which would have increased the total mortgage payments by about £27 per month.
So to me banks are idiots especially when it comes to repossessing positively flowing cash flow properties.
So I am afraid as long as banks behave so incompetently they will continue to make stupid losses and will not lend as people will not borrow at the excessive rates and stupid lending criteria.
So I really don't know who banks think they will lend to!?