Wednesday, 8 October 2014

Mortgage Market Review - Epic Fail by Financial Regulators, Again.


In other words more subsidy to Buy to Let landlords. Sigh.


Ben Jamin' said...

Weren't the EU supposed to be clamping down on buy to let mortgages?

Mark Wadsworth said...


I've said before, rent caps on their own are a halfway good idea, but that won't affect prices paid by people wanting to buy their own home.

And loan-to-income caps are a good idea but won't affect prices paid by BTL purchasers.

Even loan-to-value caps will only push leveraged BTL's out of the market and not established Homeys with "lots of equity".

To do it properly (with or without LVT) you need rent caps AND loan-to-income caps AND loan-to-value caps.

One without the others is like plugging one hole in a bucket with three leaks.

Lola said...

It effing annoys me as one of my daughters us trying - against my advice - to buy her first house now.

Rich Tee said...

The Nationwide are such scumbags. They are supposed to be an old fashioned mutual building society but they behave just like every other money grabbing financial institution.

At least they have had the decency to stop using the slogan "Proud to be different".

mombers said...

There's also a bung to BTL lenders from first time buyers using a BTL mortgage instead of a owner occupier one as they don't face as stringent checks:

Lola said...

Point of Information.
At one time - up until about 2000/2001 I was the biggest introducer to UCB Homeloans in my area. They were an excellent self-cert mortgage provider with very low impairment rates. They had been part of UCB a French bank and were bought by Nationwide. Be very clear that the people we introduced were properly pre underwritten by me and all of them had the 'earnings' or 'income' to support the mortgage they were looking for, but not necessarily in the form that main stream lenders could work with. In other words they were not over-borrowed. Most well within the 3.5x main earner ratio.
By the time The Brown Terror got really going UCB became increasingly uncompetitive on rate. I rang their MD. I theorised that his company was setting the 'right' rates and everyone else had no idea what they were doing. He agreed. Shortly afterward UCB closed to new business, the Self cert/BtL nonsense took off and the rest is history.

Bayard said...

"first time buyers using a BTL mortgage"

Haven't we always said that an owner occupier is a landlord who lets to himself? So what's the problem with buying a house on a BTL mortgage and renting it to yourself? You'd have to keep proper books and all, but that's no hardship and probably helps with running your finances. No doubt the banks think it's cheating, but you could always team up with another FTB and let to each other.

Derek said...

True, Bayard. And if you lost your job, you could evict yourself, rent the house out to someone else and find something a bit cheaper for yourself.