EU Trying To Kill Buy To Let – sign the petition to STOP it now.

EU Trying To Kill Buy To Let – sign the petition to STOP it now.

14:24 PM, 19th November 2011, About 10 years ago 100

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The buy to let market will grind to a halt if EU proposals to change the way lenders hand out mortgages to landlords are approved, claim experts. Do not let this happen – sign the petition linked below.

The new rules will stop landlords buying new property to rent and restrict mortgage lending that will shrink the number of buyers and push house prices down.

This could put landlords and homeowners in to negative equity that would make selling homes impossible.

This bleak picture of the UK housing market of the future could become a reality as soon as 2013 if European MPs vote in favour of draft mortgage regulations that are aimed at pulling the UK market in line with the rest of the EU.

But British lenders say that buy to let should stay outside the directive because the lending is for business investment rather than for personal homes.

If buy to let is included in the new rules, lenders will have to underwrite mortgages on affordability rather than projected rental income.

For landlords this means they would have to show lenders they could afford to pay their buy to let mortgages from the rest of their income.

The Building Societies Association has slammed the move, with Paul Broadhead, head of mortgage policy, saying: “If the EU goes down this route lenders could be forced to change the way they underwrite buy-to-let mortgages. In the worst case, people wouldn’t have enough money to finance their buy-to-let mortgages and the sector could potentially stop overnight.

“Three quarters of these buy-to-let landlords are individuals, couples and families and if they cannot remortgage their properties they will have to sell, creating an influx of property on to the market and potentially reducing prices.”

The EU draft directive is set to be voted on by MEPs early next year.

Ed Mead, of the Association of Residential Letting Agents, said: “Potential EU legislation might drive many buy to let landlords away from what is a vital part of UK housing provision.

“This must be viewed with caution. Our government ought to be wary of taking a lead from the EU here and encourage informed investment into this sector with tax breaks, not lumping buy-to-let in with those residential purchasers who need all the protection they can get.

DO NOT LET THIS HAPPENsign this government petition and use the share buttons below to encourage others to sign it too.


Mark Alexander
Mark and his family have been investing in property since 1989, initially in the Norwich area but more recently across the length and breadth of England. Mark created Property118.com as a social network for landlords with a vision of becoming the UK’s largest online property investor directory.
Mark’s experiences and strategies as a landlord are shared here

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Comments

by

9:49 AM, 26th November 2011, About 10 years ago

Its time we left the EU

by

10:20 AM, 26th November 2011, About 10 years ago

The Membership of the EU has so far cost this Country around £165 Billion and currently costs us around £50 million per DAY.
These unelected commissars have caused us major problems since we have joined in the name of creating a communist superstate to control every aspect of our lives.

They have removed democracy from Greece and Italy and appointed Bankers and Euro Commissars to run the countries.
I have no doubt that this move will not stop at those two countries. Watch out Spain.

The Break up of this massive Gravy Train aimed at world domination cannot come too soon

by

10:30 AM, 26th November 2011, About 10 years ago

I thought that was currently the case that lenders will not accept affordability on the rental income but now need to show 25K profit in your accounts. That is the case with Birmingham Midshire.

The EU is a dictatorship driven by greedy businessmen. Our forefathers fought in two wars for nothing. We won the war but what is happening now is what would have happened quicker had Hitler won.

by Annie Stevens

10:44 AM, 26th November 2011, About 10 years ago

Hi Neil. At first I misunderstood your position. Reading your first two paragraphs, I thought you were an accidental landlord, renting out your own home due to moving away for work. I thought you were complaining about the massive regulation, fees, costs and complications involved in being a private landlord, which make it not a passive speculative investment for your spare millions, but a full-time job with variable and unpredictable income. It's not an easy career option for the faint-hearted.
The reason landlords ask for credit checks is because they are handing the keys to a property worth tens of thousands of pounds, which is usually mortgaged to the hilt, to a total stranger, who then has the right to live there without disturbance and can do whatever they like with it. The landlord has to jump through legal hoops for many months to eventually evict someone who chooses not to pay the rent and trashes the place. They will have to pay all legal expenses and can whistle for it if they hope to receive any damages compensation from the tenant who only needs to plead poverty. If you rent through an agent, which is a necessary service for large portfolio landlords or those who do not live near their properties, they also need paid for their service, and they take fees from the landlord as well as the tenant.
Frankly, I don't even understand your comment about subsidising the BTL sector with low interest rates? BTL rates are usually higher than residential mortgages.
The current slump has not been caused by the BTL sector, and we are suffering its consequences like everyone else. Meanwhile, as long as councils do not have enough rental properties, and not everyone wants to live in one, or buy their own home, private landlords just provide another option for people who need to live somewhere, and a possible career for those who are brave enough to attempt it. That's all.

by Mary Latham

11:49 AM, 26th November 2011, About 10 years ago

Tony I wish that I had said that, excellent well reasoned post thank you.

Most of my tenants are choosing to rent. I have young couples who are saving to travel before they settle down. I have professionals who move around the country to where the work is and need the freedom that renting provides. I have companies who reduce their costs by providing my flats rather than hotel rooms where they have staff who visit the area for a short time. I have people who are unable or unwilling to work and rely on benefits to pay their rent. There are many people who choose to rent in the PRS and as long as a landlord is doing a good job and providing them with a nice, safe home it is insulting to imply that they are making the wrong choice.

I have two couples living in my flats and both would agree with Tonys points about the cost of home ownership they have both told me that they dont want "a mill stone around their neck" just yet. They have a great lifestyle and are choosing to spend their money on holidays, entertainment, cars etc rather than boiler repairs, new bathrooms, furniture and mortgage interest. People have the right to make choices and I am proud that they have chosen to live in my properties.

If you are reading this and you are a landlord please see my Celebrate good tenants blog. December is almost here I this is the chance for us all to grab our 15 minutes of fame and grab some of the media attention away from Rogue landlords and Tenants from hell. Please support this campaign

by Mary Latham

11:51 AM, 26th November 2011, About 10 years ago

Mo Very well said.

by Mary Latham

11:56 AM, 26th November 2011, About 10 years ago

Yes Svetlana, I would go so far as to say all tenants or would be tenants should sign it too. If I read that Sainsburys were going to be prevented from investing in more stores I would sign a petition to help them because I remember the hassle and cost of food before the days of supermarkets. I also remember the days when people like my parents lived with their family until the loca authority offered them a home of their own. Local authortiies are now struggling to house the homeless and young people have no chance at all of finding a home through them. In Birmingham a person going on the waiting list now who is not high priority will wait 16 years before they are offered a home - that is unless the population of Birmingham increases further which is quite likely to happen.

The PRS gives people another choice no one is forced to rent from us

by

12:01 PM, 26th November 2011, About 10 years ago

I have currently have one rental property, tenanted by a young couple who are on benefits, who have two young children. They were living apart, each with relatives, which was causing stress and unhappiness. There is no way on earth they could afford to buy a property or indeed be granted a mortgage. I have provided them with a safe, secure home; I reduced the rent, so they weren't too over-stretched to afford it, as benefit doesn't even cover rents in this area. I pay for gas and electrical safety checks, have had to pay more for landlord's insurance, as tenants on benefits are classed as a greater risk, gave them £50 towards furnishing when they moved in..
I am a good landlord. I have chosen this investment as an alternative for a pension in my retirement, so I can provide for myself in old age. It annoys me when ignorant people lump me in with bad landlords, some of whom I have encountered myself, when I was a student and then afterwards, before I saved up for a deposit to buy my first home. Where would my tenants live if they didn't have the option to rent from me? The social housing sector is inadequate and set to become more so, with the Govt planning to increase the subsidy for RIght to Buy, thus decreasing the housing stock. Wish someone had given me a 50% discount on my first home, but that is another story!) Private rented accommodation is a very important option for those who can't afford to, or don't want to, buy their own home.

by

14:00 PM, 26th November 2011, About 10 years ago

Lots of landlords with multiple properties have gone bust this year in my area of the north east, all it takes is a few tennents not to pay the rent and that happens a lot with these slum landlords as there sick of them not doing repairs and they go down the pan, recently one with 200+ houses went under making it a ideal buying market for the rest of us

It's just scare mungering and I for one welcome the legislation

by

14:08 PM, 26th November 2011, About 10 years ago

The EU is, financially, a different world to the UK and, right now, not a world I'd want to be a part of. So, they think that locking their stable door after their horse has well and truly bolted- by making it much more difficult to obtain new mortgages- will help clear up their mess? Whatever their reasons, we don't need it here, and this is why:
- it is becoming much more difficult to get any mortgage here in the UK. Commercial decisions by the lenders have seen to that. We didn't need laws passed in another country.
- it is particularly difficult to get a BTL mortgage due to punitive rates and high deposit requirements. The chancers who used to put deposits on houses 250 miles from where they lived without even seeing them are thankfully a thing of the past. Again, a commercial decision.
- The mortgage industry is working very hard to stamp out mortgage fraud, by ensuring that all Chartered Surveyors - who are the best chance of intercepting a bent mortgage- have to be registered. In practice, this means that an established (not necessarily huge) company has to sponsor them. The rogue sole practitioners, who in some cases knowingly allowed these rackets to go through, are being hit very hard. Another result of the UK's resilient commercial sector.

No, we're not perfect, but I for one am proud of our country's independence and ability to respond sensibly to our economic problems; at a time when others, across the Channel and across the Atlantic, are struggling.

I don't want out of the EU but we need to be allowed to make our own decisions to reflect our own business requirements. I say kick this daft, ill considered piece of one-size-fits-all red tape, and everything like it, firmly into touch!


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