A quote from this intriguing article in the Mail...
"The other major stumbling block for those landlords worst affected by the tax changes has been a perceived need to refinance, the costs of which can prove to be astronomical and may result in losing preferable mortgage terms agreed prior to the credit crunch."
I've long suspected that Mark Carney's 'forward guidance' (and all those bland speeches he manages to get reported everywhere as 'interest rates are about to rise') is all about wrong-footing consumers into fixing their mortgage rates. It's forgivable too, as his job as a macro-prudential regulator is to keep the banks safe.
Mark Carney opens his mouth and the interest rates futures market jumps. Mark Carney makes the merest hint of rising rates and folk in my office all start panicking and fixing their mortgages. It works.
I guess not only do the BTL reforms create the need for highly leveraged landlords to re-mortgage, it also pushes them into business banking, where they can be well and truly pillaged with almost utter impunity.
Saturday, 22 October 2016
And now it all makes sense...
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8 comments:
I have been saying for about seven years that these "upcoming rate rise" stories were to stampede people into fixing at higher rates.
From the banks' point of view this has been a huge success, as rates have fallen not risen, so everybody who fixed has lost out and the banks are coining in the extra spread.
The drivers behind this must have been the banks, and presumably the BoE just does what the banks want.
Also, why would landlords "need" to remortgage? All they can do is reduce monthly outgoings by extending mortgage term even further, and the higher interest on a business loan will wipe out any advantage of doing so. They will just have to cut back on their avocado on toast, flat screens, Apple gadgets and foreign holidays.
Another excellent quote from the article:
I've thought about putting the rents up but in all honesty I don't think my tenants will pay it - there are too many other properties available.
Doing nothing isn't an option - the cuts in tax relief will eat into my income to such a degree I would have to sell in the next three years.
The man talks sense and if this is the outcome, then great.
Isn't Mark Carney's job kind of to make sure the banks are profitable? As far as I know he has no consumer protection remit whatsoever, that remains with the FCA.
And I thought they were all on interest only deals anyway?
I Carney a shill for his old employer, Goldman Sachs? No. Don't answer that,
Talking of Goldman Suchs, I read that they'd taken over a company called "Honest Dollar". Some irony there.
SL, who are "they"? BTL landlords or ordinary borrowers?
BTL landlords, interest only is banned now for 'consumers' isn't it? Landlords are 'businesses' when they want to be and 'consumers' when it suits. But that is a whole new post for another day.
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