Bank of China, Mortgages, Defaulting Landlords by Lawrenson of LettingFocus

As you may know from a previous blog post on Monday 6th July, I have recently railed against the fact that in Buy to Let Land the borrower is being carved up by a complete lack of competition among lenders.

BANK ROBBERS
The Lloyds Group (via its C&G and BM Solutions/ Birmingham Midshires brands) and The Nationwide (owners of The Mortgage Works) now now have no competition post credit crunch. (The crunch meant the likes of Paragon and others got starved of funds and Bradford & Bingley and Northern Rock bit the dust for new money.)
Lloyds and Nationwide are charging a minimum of base rate plus 4.2% for buy to let with fees of at least 2.5%.
Outrageous!
So, I’m delighted to see that Bank Of China has now started to market its buy to let mortgages a bit more aggressively.
Finding their mortgages on the Net is hard though.
Possibly harder to find than a story about Tianamen Square on Google’s Chinese operation (Google goes along with Chinese censorship if you did not know – nice people Google eh?)

BANK OF CHINA BUY TO LET MORTGAGE RATES
Their mortgage rates aren’t bad but borrowers must have enough income to cover both their home mortgage, and that of the investment property, in order to qualify.
Also, maximum loan to values are just 65% on freeholds and 60% on leaseholds.
The rates charged depend on if you are buying a freehold or a leasehold property too and how much you want to borrow (whether the property is over or under £250K).
To keep it simple, for what usually I buy - which is freeholds and houses under £250K in value, the maximum LTV is 65% and the mortgage rate is 3.5% over Bank of England base for life.
However, you must take out a 20 year term and they will only do repayment mortgages, there being no interest only option.
The arrangement fee is a reasonable £1495 (and the valuation fees aren’t bad either) though you cannot add these to the loan.
Early redemption penalties only apply in year one and are 1% of the loan which is good compared to UK lenders.
The downsides for many people will be the low Loan to Value, the lack of an interest only option, the fact that your own private (non rental) income is looked at carefully too plus you have to attend an interview at a Bank of China office
Still at least it is some competition for the rogues at Lloyds and Nationwide.

GOOD LOAN TO VALUE DEALS
We, of course, offer some great rates through our affiliation with Mortgage for Business and these DO go up to 75% Loan to Value,
Try Mortgages for Business.co.uk by clicking on Great Rates on Buy to Let Mortgages and quoting LettingFocus for their special offer of £250 brokerage when you draw down a buy to let mortgage - set up especially for us.

LATEST ON EVICTING TENANTS OF DEFAULTING LANDLORDS
Talking of our dumb mortgage lenders, tenants who currently face immediate and unexpected eviction because their landlord faces repossession will be given two months’ statutory breathing space to find a new home, under new government proposals.
You may have seen my email correspondence with the Council of Mortgage lenders on my previous post on 30th May about this.
The problem is because tenancy agreements are deemed unenforceable in cases where the borrower has failed to inform the lender of their intention to let the property.
Under proposals from housing minister John Healey tenants in this situation will be given at least two months to find alternative accommodation, through new powers granted to courts in charge of possession hearings.
Unauthorised tenants will also have the right to be heard at these hearings.
In addition, the government is proposing to force lenders to provide unauthorised tenants with a mechanism to request a two-month delay in repossession from lenders. It also wants lenders to consider other steps instead of repossession, such as appointing ‘Receivers of Rent’ to collect rent and manage occupied properties.
About time too!
Shame the mortgage lenders have had to be forced into this by the Government.
In next weeks’ blog post (out 24th August) I’ll look at the Government’s well meant but silly plans to limit the number of shared houses in some areas.
Link to other posts on today’s post topics:
http://www.lettingfocus.com/2009/05/mortgage-lenders-evict-tenants-too.html
http://www.lettingfocus.com/2009/07/buy-to-mortgage-rates-deviod-of.html
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Removing Squatters - Part Two (For Part One see Monday May 14th Blog)

In this blog, we contimue our look at what to do about squatters........
If a trespasser is in occupation you ARE able to rely on self help measures (i.e. not involving the court) to get the property back.
Clearly, what you will have to do is somehow get into the property and change the locks and secure it. But herein is the problem.
Although you can do legally do this yourself - and you would be wise to have the police there when the squatters come back – what you cannot do is use violent entry if one of the squatter is actually in the property at the time and opposes you.

Clued up Squatters
Of course, all clued up squatters know this, so they change the locks so you cannot get in easily and they will always make sure that someone is in the property at all times.
Since many won’t have jobs, this is often not a problem for them to be in all the time!
In these cases, if you try to get them out they will probably quote the relevant law – which is section 6 of the Criminal Law Act 1977 - and no doubt call the police and friendly lawyers to stop you from trying to evict them.
To counter this you will need to use the special court process for trespassers. Usually these can be issued quickly – often in less than four weeks. If you do this you are strongly advised to use the services of a solicitor to help you.
For most people this will be the most attractive option and is usually easier than waiting in vain for them to go out before you can go in and change the locks. It is also much better from the point of view of your own physical safety too.

Court Processes
The good thing about going to court is that you will only have to wait about a month and the occupiers will almost certainly go just before the bailiffs arrive, taking their stuff (or at least the stuff they want to take!) with them.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

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Related article at our site: Getting Rid of Squatters