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.
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Comments

by

23:09 PM, 27th November 2011, About 10 years ago

I have educated myself, saved a big deposit, costs and more. I have spread the money over a range of investments to keep it safe and make it work.

I will buy but when the time is right. Why stretch yourself in a falling market where prices are going to fall a lot further.

I suggest you educate yourselves on economics and I specify the Austrian school.

by

23:16 PM, 27th November 2011, About 10 years ago

What is wrong with renting low grade properties, its part of being a student.

You haven't fallen for all this student luxury rubbish have you?

Come on what's wrong with a normal house.

Also with the massive hike in student fees they are not going to want to rent pricey places, numbers will fall, more will stay at home and their will be huge competition from purpose built blocks.

by

23:24 PM, 27th November 2011, About 10 years ago

Well if you did study economics just stating supply and demand is an extremely simplified and often inaccurate statement.

As you are an economics guru can you tell me what type of demand are you referring to too?

by

0:35 AM, 28th November 2011, About 10 years ago

Crikey, you really do have a distorted view on things, but hey, everyone is entitled to their opinion, however wrong it may be.

If I may, I'll make a few points.

Firstly, I bought my first house in 1984 for £22k. I sold it in 1987 for £63k with hardly a hint of a BTL investor in sight anywhere in the UK. I'm sure you'll agree that BTL is a relatively new phenomenon. You do agree with that surely?

So, what led to that near on 300% hike in 3 years? 2 simple factors; supply v demand and sentiment. Of course you can throw the knock-onThatcher effect into that as well(in terms of home ownership), and I have no doubt that you'll be anti her too. The point is that there was a soaring market and no BTL investors. Interesting!

Lets look at another scenario then.....

Lets say that Avis, Hertz, Budget and any other car rental firm you'd like to suggest go mad and start buying up cars to a crazy extent. Are people likely to start demanding more rental cars?? No, it seems very unlikely.

Will there be a peaked increase in the availability of new car prices in the market place? Well, maybe there will short term. Maybe some people will no longer seek a new car to buy, but buy a used vehicle instead. In reality though, the car manufacturers will react by increasing production.

Yes the old law of demand and supply will kick in and satisfy the need.

So, as the experiences of the mid 80's and the example above suggest, increased house prices are nothing to do with Landlords (investors) buying houses. All that is happening is they are buying available stock and transferring it to the rental market. If, as you suggest, Landlords are forcing prices up then they would STILL be going up. Investors are buying NOW because prices are low. I don't see the prices sky rocketing due to that activity do you?

I have only bought one this year; a large Victorian property that I've converted to a high spec HMO - 6 en-suite rooms and 3 with their own kitchenettes. After buying the house I have spent nearly £45k to do this. A considerable investment in providing people with high quality housing I think you'll agree. Am I a parasite?? Well clearly I think I have a strong argument to the contrary.

Therefore I've taken demand away from the smaller flats and houses so that'll help suppress prices in that FTB housing area (by your logic). I guess that will please you.

I see in another of your posts that you suggest there is nothing wrong with lower grade properties. Well that may be your view my old son, but the local Council and prospective tenants tend to disagree with you. The demand for my high spec units is staggering! Yes I do keep my rents quite low and I do so because I like to keep tenants for as long as possible. However there is still cheaper low quality accommodation around. The tenants can choose to take it if they want but most don't because the world has moved on. Your view on what students want (or anyone else) is, very very outdated. Would you want your son or daughter staying in some flea infested hole as depicted in Rising Damp??? I certainly wouldn't and when my daughter is old enough to go to Uni ( and should she choose to do so), I shall ensure that she does NOT have a Landlord of the type you suggest is quite satisfactory.

Therefore what I'm saying is that we have a situation of supply & demand. You've been arguing that point yourself but through a distorted viewpoint by saying Landlords are increasing demand. Clearly that is rubbish as Landlords cannot create demand, they can only satisfy it.

The increase in demand is down to:

1. Shortage of new properties being built.
2. Increase in people wanting accommodation.

Well I think you'll agree that Landlords aren't responsible for the lack of new properties being built. By your logic the likes of Taylor Wimpey would be knocking them out by the dozen for Landlords.

And as for demand, that is down to a number of factors such as the breakdown of the family unit, net immigration figures and so forth. Indeed only in the last week was the net immigration figure over the last year announced at a quarter of a million. Is this down to BTL investors??? I don't think so my friend. That is down to a whole load of factors outside of the control of Landlords.

And there you go saying you are an investor! So what are you investing in then?? There are not too many realistic options in terms of sensible investment - precious metals, stocks, businesses, intellectual rights, and of course property are I guess the main ones. So which of these have you put your 'hard earned' cash into?? I'm guessing property is one of them, but whether or not I'm right, I think you must be investing because you want prices to increase? My goodness what a parasite you are! Your investment is forcing prices up and others that would like to buy may now not be able to.

Frankly I think you need to take a good look at your beliefs. You are completely off the mark in your view that Landlords are responsible for forcing FTB's out of the market and even that were true (it ISN'T!!) the very fact that you are an 'investor' means you are doing exactly what you criticise others for, in whatever field you invest in.

Whilst I mean no insult, that makes you one hell of a hypocrite.

Hmmmmmm

by

14:38 PM, 28th November 2011, About 10 years ago

Once again the EU parasites are trying to milk us for every penny they can.
As a responsible landlord with two properties I have invested tens of thousands into BTL as an alternative to traditional pensions with less than traditional returns. Unfortunately the government does not offer any tax incentive for risking my hard earned cash on investing in property. It seems that anyone trying to do the right thing for themselves to the benefit of others is a target for greedy beaurocracts who wish to plunder our life savings. I will certainly vote against these proposals as it is clearly the thin end of a very big wedge. I'm glad I made my investment in BTL as even our own government is now looking to plunder our private pensions in a bid to stimulate growth!! The sacred cow has finally been slaughtered!

by john lown

16:26 PM, 28th November 2011, About 10 years ago

If deposits are too low, the risk of viability of that property increases as the ratio of rent to repayment is too fine. A couple of months empty with no cushion can spell foreclosure.
Not one of our tenants wishes to purchase their own hom for many different reasons.
Main reason- could never afford a home as nice as they are currently renting.
Proposed EU ruling, details please before uninformed comment.

by

19:57 PM, 28th November 2011, About 10 years ago

As said above the term parasites refers to buy to let landlords who are stealing our children's lives away.

At least these buy to let landlords saw there remaining equity diminish with the large size price falls shown by the land registry today. I would be a little worried if I was them especially with more big falls in the pipe line.

by Mark Alexander

20:16 PM, 28th November 2011, About 10 years ago

Only those who want to sell will be worried, most don't, they want to buy!

by

7:37 AM, 29th November 2011, About 10 years ago

Or remortgage or gear.

Then there is the margin call conditions tied into the mortgage. 😉

Come on EU get this through.

by

11:06 AM, 29th November 2011, About 10 years ago

Regarding your first point Ian. My understanding from some data I saw a little while back is that whilst there are many hundreds of thousands of buy to let landlords with one or two properties the majority of flats - 60% plus are owned by a small number of professional or semi professional landlords


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