It is a mad world in buy to let as the credit crunch bites says Lawrenson of lettingfocus.com
A contact of mine in the north वेस्ट recently became aware of someone who had bought 7 off plan apartments (1/2/3 bed) in a block of 30ish apartments about 10mins Manchester Centre which completed 6 months back for a total of just over £1 million as his first property investment.
No money down, naturally and allegedly 15% gifted deposits from the developer.
The developer promised to pay interest payments for 6 months max, or until they were let, but he cannot now be contacted.
The interest only monthly mortgage payments come to £6000 per month but only three have been let - at much less than what was promised and they are bringing in £1485 per month in total leaving a shortfall of £4515 per month. Ouch!
You have to ask who on earth would lend this man this money on the figures involved - they do not add up whichever way you look at it। It is madness!
More craziness from our financial services friends। When I called in at my local Nationwide -who took over Portman – they said “Sorry, computer says no -we don’t do buy to let mortgages anywhere in the Nationwide group.” Funny that, just the other day I got a call from the Mortgage Works (part of Nationwide) themselves – they are still very much into buy to let. Someone should tell the berks at the branches. m
Also, this week, the hopeless London housing association to whom I let one of my properties on a private lease scheme called me. Their in house boiler people said I would need a new boiler -and it was going to cost me £2600. I got my own man in to fix it – cost £60, which just proves the value of getting a second opinion.
Finally, it continues to look very grim in the financial markets and I feel sure that this must surely spill over into even further tightening on mortgages. Property prices will continue to drift off this year and in a slow market that means there are bargains to be had - though many vendors will no doubt refuse to accept the new reality for a while yet.
I notice that Mortgage Express have raised their margin over bank base rate by another 0.8% above what was available last year.
They appear to have been caught out more than most because they have raised a lot of capital on the money markets using these awful debt instruments. So, I’ll leave them well alone for now. There should be better deals around. I suggest you go to a good broker who knows which lenders who are less exposed to Le Crunch and who still have decent mortgage rates.
If you need more advice on property investing or buy to let property in general please ask me.
I’m David Lawrenson from property investment advisors http://www.lettingfocus.com/
I’m the author of the buy to let book “Successful Property Letting - How to Make Money in Buy to Let” the UK’s top selling property title.
Buy the new edition here: http://www.amazon.co.uk/Successful-Property-Letting-Right-Plus/dp/0716030195/ref=sr_1_1?ie=UTF8&s=books&qid=1203933977&sr=1-1
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying below market value. I’m an expert on property investing for profit and a well known property freelance writer and I contribute to newspapers and a host of property websites, write a property investment blog, a number of columns in the press and run a landlords advice service.
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services.You can read more of my property investment blog and details of my networking, advice, buy to let networking programme at my website http://www.lettingfocus.com/My next London property investors networking meeting is on March 12th. Click here for details: Property Investment AdviceWhat’s unique about lettingfocus.com is that we offer independent property mentoring because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.Copyright: David Lawrenson 2008. This blog is updated at least twice a week. Permission must be sought before using the material in the blog.
No money down, naturally and allegedly 15% gifted deposits from the developer.
The developer promised to pay interest payments for 6 months max, or until they were let, but he cannot now be contacted.
The interest only monthly mortgage payments come to £6000 per month but only three have been let - at much less than what was promised and they are bringing in £1485 per month in total leaving a shortfall of £4515 per month. Ouch!
You have to ask who on earth would lend this man this money on the figures involved - they do not add up whichever way you look at it। It is madness!
More craziness from our financial services friends। When I called in at my local Nationwide -who took over Portman – they said “Sorry, computer says no -we don’t do buy to let mortgages anywhere in the Nationwide group.” Funny that, just the other day I got a call from the Mortgage Works (part of Nationwide) themselves – they are still very much into buy to let. Someone should tell the berks at the branches. m
Also, this week, the hopeless London housing association to whom I let one of my properties on a private lease scheme called me. Their in house boiler people said I would need a new boiler -and it was going to cost me £2600. I got my own man in to fix it – cost £60, which just proves the value of getting a second opinion.
Finally, it continues to look very grim in the financial markets and I feel sure that this must surely spill over into even further tightening on mortgages. Property prices will continue to drift off this year and in a slow market that means there are bargains to be had - though many vendors will no doubt refuse to accept the new reality for a while yet.
I notice that Mortgage Express have raised their margin over bank base rate by another 0.8% above what was available last year.
They appear to have been caught out more than most because they have raised a lot of capital on the money markets using these awful debt instruments. So, I’ll leave them well alone for now. There should be better deals around. I suggest you go to a good broker who knows which lenders who are less exposed to Le Crunch and who still have decent mortgage rates.
If you need more advice on property investing or buy to let property in general please ask me.
I’m David Lawrenson from property investment advisors http://www.lettingfocus.com/
I’m the author of the buy to let book “Successful Property Letting - How to Make Money in Buy to Let” the UK’s top selling property title.
Buy the new edition here: http://www.amazon.co.uk/Successful-Property-Letting-Right-Plus/dp/0716030195/ref=sr_1_1?ie=UTF8&s=books&qid=1203933977&sr=1-1
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying below market value. I’m an expert on property investing for profit and a well known property freelance writer and I contribute to newspapers and a host of property websites, write a property investment blog, a number of columns in the press and run a landlords advice service.
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services.You can read more of my property investment blog and details of my networking, advice, buy to let networking programme at my website http://www.lettingfocus.com/My next London property investors networking meeting is on March 12th. Click here for details: Property Investment AdviceWhat’s unique about lettingfocus.com is that we offer independent property mentoring because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.Copyright: David Lawrenson 2008. This blog is updated at least twice a week. Permission must be sought before using the material in the blog.
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Monday, March 17, 2008.
