How to protect my unencumbered properties?

How to protect my unencumbered properties?

11:49 AM, 3rd March 2015, About 7 years ago 45

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I have over 30 properties in total of which I own 8 outright, and rest are on Buy to Let mortgages.

I am looking for some advice on how to protect the 8 I own outright in the unlikely prospect of an increase in mortgage rates like we had back in the 70s ( I think) so the mortgage company would not be able to touch them ?




by Colin Dartnell

8:52 AM, 6th March 2015, About 7 years ago

Reply to the comment left by "shakeel ahmad" at "05/03/2015 - 21:13":

True but rents were also a lot lower, in some cases less than half what they are now.

10% might be a disaster for some but it is not going to happen overnight (unless the idiot left get in) so landlords should have a few years to get themselves covered and reduce their exposure.

by Puzzler

19:10 PM, 8th March 2015, About 7 years ago

We coped in the early nineties at 15%

by Puzzler

19:12 PM, 8th March 2015, About 7 years ago

We coped in the early nineties at 15%, it's the low rates that are not the norm. You should have plenty of time to plan. Let's face it, you sell as they start to rise to a point where you're not comfortable.

by tony tony

19:19 PM, 8th March 2015, About 7 years ago

Reply to the comment left by "Puzzler " at "08/03/2015 - 19:12":

puzzler tell that to the 1000s that lost there homes ,nevermind landlords

by andy peers

11:42 AM, 12th March 2015, About 7 years ago

Hi all, because rates as so low and now have been for some time - if rates rose to 10% property not only would circa 30-50% of the population not be able to afford their mortgages, prices would probably fall by circa 50% in value and a huge crash would occur accross the country. No government would want this so they will try to avoid this at all costs. In reality in means this situation is unlikely to occur and if it did it could be over 10yrs so people could slowly adjust and make plans to cope.

The obvious solution is because its so unlikely to occur - the odds would probably be over 100 to 1 - you could simply take out and insurance (hedge against the risk). if rates do go up that high you get a 100-200k payout which will see you through - might only cost you £5-10 pm or so. You can always insure against a very unlikely event.

I've seen asset strippers deliberately do this type of thing - gear up massively on some assets (property or otherwise), legally separate or similar the assets of value (reduce the debt on those assets). let the non profit assets get go under and creditors lose out (banks with mortgages over 100% of value), and make more on the other assets they keep - personally I don't morally like it but seen it all too often.

I don't think Tony is in this situation or wants to do this type of thing just insure best he can against a worst case scenario. I'm sure its possible without the moral dilema you might just need to do exactly that though - pay a very small amount for insurance - or so what others have suggested - sell some and reduce gearing further accross the portfolio.

regards Andrew

by Ian Ringrose

12:31 PM, 12th March 2015, About 7 years ago

"End of the earth" type insurance does not work well, as the insurance may not remain trading!

by Mark Alexander

18:53 PM, 13th March 2015, About 7 years ago

I must have missed this thread when it was first posted.

I'm shocked that nobody has suggested a 10 year fixed rate.

If that could be of interest have a word with this chap >>>

It will cost money to refinance of course but if it helps you to sleep at night ....

by Mark Alexander

19:00 PM, 13th March 2015, About 7 years ago

PS - there's nothing wrong with being greedy Tony and anybody who owns more than one property and disagrees with me on that is being hypocritical.

Tony, have you considered remortgaging the 8 unencumbered properties onto 10 year fixed rates as well? This would give you a very nice lump sum so that you can begin living the dream now and not years from now.

If you think property values will go down then sell them now and enjoy the money whilst you can. I suspect you don't though, hence your reasons for keeping them. By the time you have spent the money you have borrowed they will probably have increased in value by more than that.

Just be careful you don't over commit, check out our landlords calculator >>>

Having said that, with X 100 thousand in the bank you will be in control anyway 😀

Also see

by Ian Ringrose

20:17 PM, 13th March 2015, About 7 years ago

The problem putting them all on 10 year fixed rates, is that they will all come to the end at the same time. There are also very few about.

5 year fit rates will not provide that much protection, as none of us expect interest rates to go up a LOT in the next year or two.

At the end of the day "good returns" is spelt "risk".

by Colin Dartnell

20:35 PM, 13th March 2015, About 7 years ago

Reply to the comment left by "Mark Alexander" at "13/03/2015 - 18:53":

Hi Mark

Thought about it but didn't mention it as I reckoned rates wouldn't reach the sort of figures he is worrying about for several years so a long term fixed rate fixed now would probably have run out by then anyway.

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