Singing Pig

Debt is being cemented as a feature of Britain’s buy-to-let housing market, as the number of landlords three months behind on their mortgage has hit 10,000.

The reported estimate from Hargreaves Lansdown is the first sign that some may be forced to sell-up prematurely if their monthly payments become unaffordable.

Worryingly, the IFA tipped the number in arrears to increase in the next months, as the ‘little or no interest’ deals they agreed in 2006 or early 2007 are due to expire.

Giving them even less room for financial manoeuvre, landlords who slip off cheap initial rates are now unlikely to be able to remortgage for the same loan-to-value.

Not only have mortgage rates risen since the credit crunch, but falling house prices averaging 10% threaten to push those who bought in 06/07 closer to negative equity.

“Borrowing to invest can be a hazardous strategy, just as much with property as with any other form of investment, because you magnify losses as well as gains,” said Laith Khalaf. pensions analyst at Hargreaves Lansdown.

“This was as true 10 years ago as it is today, and will be in 10 years time when everyone has forgotten the current credit crisis. For the overwhelming majority of the population, buy-to-let should not be seen as an alternative to making regular savings into a pension.”

When using historic rates of return, a pension invested in an equity portfolio would return more over 25 years than a buy-to-let property over the same period, Hargreaves’ data reportedly shows.

Obtained by The Daily Mail, the full research indicates that £1 put into a buy-to-let property, with a 75% loan to value, over the past 25 years would now be worth £3.63, compared to its worth in a pension of £3.98.

While such long-term investors are best-placed to weather any further stresses in the buy-to-let market, the credit crunch has cut off the entrance to those looking to follow their success.

Criteria to secure buy-to-let mortgages have been toughened, and their availability has contracted, with reports from Moneysupermarket.com that the number of packages has fallen 97% over the past year.

hhmmm, i wonder what Hargreaves Lansdowne's business is, hhmmm let me think

what they do not consider is that if i bought a house 25 years ago for 20,000 and put 5k in and rented it, that house is now sold for 200,000, what return on my investment is that, hhmm not vey good of an IFA not to be able to work that out

also how much would i be making in rental profit, with a 15k mortgage, every month (£700, maybe more))... errrr no mention of that either, in fact i could pay down the debt and have a free house, and all that lovely rent is mine

to get £1000 per month pension income i would have so save £400 (minimum) a month for the next 27 years, a grand a month, bugger me, i spend that on cars, curry and lager as it is, will hardly see me being the Bon Viveur i imagined i would be, greying hair, tanned and spending lots of time with chums on my yacht in the Med, but more like a 2 bed bungalow in Skegness, a fish supper all to look forward to

cheers Mr Hargreaves, i'll stick to property thanks

but then again Hargreaves won't earn anything out of me will they, so it must be a bad idea......

Rik

Well said Rick

BTL has never actually been so bouyant since the start of the credit crunch

As a Broker I have never ever been so busy organsing BTL finance for Landlords throughout the UK

Making a difficult job, fairly easier

FSA fines Hargreaves Lansdown 300,000 over Secure Growth Portfolio
FSA/PN/052/2004
10/06/2004

The Financial Services Authority (FSA) has fined Hargreaves Lansdown Asset Management Limited 300,000 for rule breaches relating to its Secure Growth Portfolio (SGP). This was a service that offered discretionary management of a portfolio of zero class shares of split capital trusts ("zeros") between 1992 and 2002.

The firm is reviewing the accounts of all its SGP customers, in order to identify losses that resulted from its failings, and will pay appropriate redress. Customers will be contacted by the firm and need take no action at this stage.

The rule breaches relate to the way in which the firm described the risks of zeros held in the SGP and its failure to alert existing investors promptly when potential new risks emerged. It is not connected with the FSA's separate investigations into alleged collusive behaviour among fund managers and brokers in the split capital investment trust sector. Nor does it relate to the structuring, management or pricing of any trust in which the SGP invested.

full story  http://www.fsa.gov.uk/pages/Library/Communication/PR/2004/052.shtml

MortgageProvider:

Well said Rick

 

BTL has never actually been so bouyant since the start of the credit crunch

 

As a Broker I have never ever been so busy organsing BTL finance for Landlords throughout the UK

 

Making a difficult job, fairly easier

john, don't you mean "i have never ever been so busy organising DODGY BTL finance for Landlords throughout the UK"?

... since you are unwilling or unable to explain how which UK lenders are happy to provide NMD finance?

(rik - sorry to hijack the thread ...)

Never done a dodgy deal in my life That's why I have been in finance for 28 years  There are dozens of people and bridging companies in here offering the same or similar finance

  If you care to look at the number of threads offering NMD deals you can sources them as I  did and stop pestering me  You need to make more effort and think out of the box

I certainly will not let you know which lenders I use as its simply none of your business and its up to you to be more pro-active to find out by yourself and not be a parasite stupid Boy

JW

john, i'm not suggesting you are the only broker peddling dodgy NMD schemes ... but you are one of them.  i only mention it as you have stated on another thread that your offering is 100% legitimate and it quite clearly isn't. 

as for your childish insults ... i would expect nothing less from someone as unprofessional as you.  i know that you don;t have any "secret" financing methods, and i have mortgages with almost all of the major BTL lenders, whose BDMs confirm that NMD schemes are not legitimate.

that aside, you are obviously feeling brave to call me a "parasite stupid boy" (does that even make any sense?!) ... if you and i were stood side by side in persn and you did that, you would do it once and once only i can assure you ....  maybe you would like to PM me a time and a place for us to meet and you can repeat your insult face to face?  you're wilmslow area i believe ... i know it well.

So not only can you not stand up to an adult conversation debate which is apparent by your childish immature uneducted insults You dont even know me How can you insult a thead

Orr soreee funny You sound like a chat room geek lmko

We were discussing the merits of people who organise BMV NMD deals, nothing more You turn it into a circus You need Anger Management and soon

Now you turn it into fisty cuffs cuffs  You sound like one of these Football hooligans I

 If thats how you carry out an adult  debate  BY resorting to  theatening people, you have never met, spoken to or liased with, to fight, within a thead LMKO soo funny  Mind you its what is expected by childish, uneducated, insignificant individual which is clearly as useful as a chocolate tea pot

IT would take more than a punny individual like you to take me down , but as I I left school years ago guess you know more

LMKO

Ohh sore very funny remembering my school days

I am going to enjoy the evening

John

What a stupid idiot twat