New lending rules may change housing market forever

This is going to be a disaster….
does anyone have a timeline?
What % of UK mortgages are interest only
Will it apply to all, including BTL?
Is it definatley going to be applied ‘retrospectively’ to all existing homes?
Does a mortgage on 2 year fix actually come up ‘for rewenal’. I would argue the contract has not ended, the bank/mortgage is an ongoing contract obligation, even if that means it moves onto SVR.
I have 4 house all working fine, all mortgages supplied with full IFA advice and endorsed by bank. How can it be legal to change the rules on a contract retrospecively and throw people onto street?
Madness heaped on madness

I lost two properties because £2k of arrears, as the tenants couldn’t pay the rent, and I was not able to stretch to cover all 4 properties including my residential property.

My 1 remaining buy-to let is £3.5k in rent arrears. I had to fight to stop a repossession order before Christmas. I am concerned about the future as the tenant is struggling to get bac in work. With 2 in 3 jobs going to EC candidates (press earlier this week) and more and more Brits unemployed, I fear for the future of the private rental market.

gradually over time the gap between income and house prices had increased, if this continues over the next 10 – 20 years and so on, it will mean

a) capital repayment will eventually be removed as it is no longer affordable.
b) BOE base rate will be governed by the nations incomes.

Hi Janette

I’m so sorry to hear of your woes but thank you for sharing your story.

It is possible to insure against this for a premium of 6% of rent, subject of course to tenant referencing. In return rental payments are guaranteed to be paid on the due date every month.

I’m so sorry this news is too late to help with your circumstances but it may well be useful for other people reading this.

Just remember, several millionaires lost everything many times over before succeeding. Easier said than done I know but there’s plenty proof out there that it’s possible.

I wish you well.

Regards

Mark Alexander

b) BOE base rate will be governed by the nations income ability to service the existing debt,
c) inflation will become mans best friend 🙂
d) pensions will become invested in commodities and property.

I have two mortgages on repayment and one on interest only for small low value properties. When I took out the loans nine years ago – at that time as an expatriate with a low income, only one lender would lend to me since I didn’t meet the normal rigorous lending criteria even in the time of easy credit.
Now I am left with a total debt of 30k spread over 5 properties. It must be rated an excellent risk on anyone’s criteria. The lender was a bit pricier than the others but they made an excellent judgement. It seems to me that conditions do need to be tightened up, but more attention should be given to judgement and assessment of the record of the borrower and less to rigid criteria. Interest only loans obviously fulfil a role, particularly where the risk can be spread over several properties (as in my case). I agree that increasing the deposits required is sensible – but that has happened in the marketplace anyway – but it definitely needs to be done in such a manner that FTB can still enter the market otherwise there will, as some have commented, be a catastrophic fall in the market that has a knock on effect to the whole economy.

Hi Richard

Apart from our views on interest only, our strategies are not too dis-similar. My strategy is explained more fully here.

Regards

Mark