Mortgage News

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    Originally posted by loanarranger View Post
    I only communicate what was disclosed, nothing more and nothing less.
    I don't disbelieve you at all that someone at your conference said it or that this goes on.
    What I find hard to believe is that they are inspecting BTL properties within the first 12 months (due to the practicalities) or summonsing for eviction (as there is no such thing in this country).
    Seems to me like they were trying to put the frighteners on a conference full of mortgage brokers.


      Boletus , their phraseology might have been better worded , but I suspect the essence of what was communicated was if someone was found to have procured a mortgage by providing misrepresentation of facts , the borrower would quickly find that the legal process of having the loan repaid or at worse obtaining a Court Order for repossession would be quite speedy.

      None of the brokers expressed their views probably because none of them had been party to such happenings , one just never knows.

      We now move onto matters which are pertinent to the current scene so far as the Mortgage Market and lenders are concerned.


        A notification has today been received from Aldermore mortgages in respect of how they will in future assess rental income in helping determine affordability for Regulated Homeowner applications , they are not alone in taking account of the impending changes in taxation of Buy to Let properties. At a time when all lenders Affordability Matrix make the determination of how much one can potentially borrow more challenging this advice needs to be borne in mind particularly if the applicant is indeed a Portfolio Landlord.

        "• How rental income is assessed when used as additional income - due to the upcoming tax changes for buy-to-let landlords, rental income from buy-to-let properties held in the applicant’s personal name will be assessed by our underwriters to determine the impact of future tax liabilities.

        This may mean that the amount of rental income which can be included in our affordability calculations is reduced.


          Originally posted by theartfullodger View Post
          I fear you've lived a quite life.... e.g.

          A visit wouldn't have prevented that fraud, though, would it.

          If you are a landlord, use the forms linked here to put a restriction on your property that should reduce the risk of fraud.

          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


            jpkeates makes an excellent suggestion , I have done this for my properties and those I manage for overseas clients. Yes it takes a bit of time completing the records but once done there is the knowledge that if a fraud were attempted the system will alert me to the matter.


              Thanks JPK, I will use that form.


                Originally posted by jpkeates View Post
                A visit wouldn't have prevented that fraud, though, would it.

                If you are a landlord, use the forms linked here to put a restriction on your property that should reduce the risk of fraud.
                Oh my goodness, I would never have thought of anyone doing that!


                  Survey from Halifax

                  This is an interesting report which to some extent gives positive news for Landlords.

                  One in ten young people think homeownership is so unachievable that they will be forced to rent forever, according to new research from Halifax.
                  Meanwhile, another 10 per cent of 18-34-year-olds believe they have to leave the UK to be able to afford a home and a quarter think they will need to inherit money to get on the property ladder.
                  Half of people surveyed in the age bracket think home ownership is not a “realistic” option.
                  Eight out of 10 feel that a lack of affordable property is keeping home ownership out of reach.
                  However, Halifax says that first-time buyers end up on average £651 a year better off buying than renting.
                  The average deposit put down for an average first-time buyer home is £32,321, rising to £100,445 in London.
                  Twenty-two per cent of aspiring homeowners feel that home ownership is a thing of the past.
                  Even if they have managed to raise a deposit, 33 per cent feel mortgage criteria is too difficult for them to meet.
                  Halifax housing economist Martin Ellis says: “Even with the highest number of first-time buyers in the last decade in 2016, many young people still feel they are running the financial gauntlet – saving for a deposit, finding an affordable property in the right area and managing to fund living in the meantime.
                  “It’s never too early to do some research to help build a better understanding of how much is affordable, the borrowing options available and calculating what’s achievable to help make owning a property more of a reality.”


                    Government: rental payments aren't proof of mortgage affordability

                    The government has rejected a petition which urged lenders to consider rental payments as proof of ability to meet mortgage repayments.

                    The petition received over 100,000 signatures, which meant it was considered for debate in Parliament.

                    Its creator, Jamie Jack Pogson, says he wants "paying rent on time to be recognized as evidence that mortgage re-payments can be met".
                    He states: "Since living on my own I have paid £70,000+ in rent on time yet still struggle to get a mortgage. Unless you're getting handouts, wealthy or in receipt of inheritance it's almost impossible."

                    However the parliamentary debate concluded that lenders "must consider a range of factors when assessing a mortgage application", adding that meeting rental payments is "not sufficient in itself" to demonstrate affordability over the lifetime of the loan.

                    The government said this is because the affordability assessment must take account of a much wider range of factors, including a borrower's income, committed and household expenditure, and the ability of the borrower to meet payments in the event interest rates were to rise.

                    In its response, the government said: "It is important to be aware that home ownership brings a number of additional expenses that may not be incurred when renting, including maintenance costs and buildings insurance. Before extending a loan, lenders must satisfy themselves that a borrower will be able to meet these additional on-going costs when considering a mortgage application.

                    "Many lenders also use information from Credit Reference Agencies when considering mortgage applications. This is because previous customer behaviour, in terms of paying back debts, tends to be a relatively good predictor of future behaviour. Therefore if prospective borrowers have a history of good financial management it can improve their chances of obtaining credit.
                    Beyond the FCA’s requirements, decisions around the availability of individual mortgage loans remain commercial decisions for lenders, and the government does not seek to intervene in these.
                    "Whilst one lender may be unable to offer a mortgage, being denied a mortgage from one provider does not preclude a customer from being offered credit elsewhere. There are a wide variety of mortgage products available in the UK and prospective borrowers may benefit from shopping around."


                      Bad brokers are harming landlords, says The Mortgage Broker

                      By Sam Barker 11th April 2017 9:58 am 11th April 2017 9:58 am

                      Buy-to-let landlords may get poor deals or be locked into high standard variable rates due to fraudulent or bad mortgage broking, according to The Mortgage Broker.

                      The firm has hit out at “unprofessional” and “lazy” brokers that do not source their clients the best deal.

                      The Mortgage Broker says that some brokers can be outright fraudulent, lying about income.

                      The Mortgage Broker says: “We have seen evidence of mortgage brokers securing mortgages for investment properties, which are then inhabited by family members.

                      “Or they have arranged a mortgage for an investment property, that is either a multi-let, Airbnb or student accommodation, without informing the lender.

                      “This is highly unprofessional. If a lender finds out, it could withdraw the mortgage and in a worst case scenario, the client could be slapped with mortgage fraud, which will severely affect their ability to borrow funds, or obtain mortgages in the future.”

                      The spokesman for the Broker warns that some landlords could tell “white lies” to lenders without realising the severity of their actions.
                      He says: “Lenders are more geared up now to do post-application checks and are on the lookout for scheme abuse and mortgage fraud.”


                        Government could ban leasehold terms for New Build Houses

                        The Government could ban unfair leasehold terms for new build houses, according to Communities secretary Sajid Javid.

                        Speaking to the Communities and Local Government Committee this afternoon, Javid said the Government would consider an outright ban as part of its response to a planned consultation on leasehold properties.

                        Some property developers have been accused of selling houses under leasehold terms that mean homeowners pay yearly high ground rents to the freeholder.

                        Some of these rents double every five or ten years, hitting homeowners and making resale difficult or impossible.

                        When asked if the Government would consider new laws to make sure leasehold terms are fair, Javid said: “It may be more than that… [the Government] could ban houses built on leasehold terms for no good reason, ban it outright.”

                        He added: “What we are particularly focused on here is the ground rent and whether there is an unfairness in the system.”

                        Javid said the Government was not targetting flat leaseholds as part of its campaign.

                        He added that policy on the issue could be affected by yesterday’s news of a snap general election.


                          I have previously mentioned that under the revised PRA rules individuals/couples who own 4 or more properties will be reassessed by lenders when applying for either a remortgage with increased borrowing or making a new purchase: as a result more attention is being given to the personal income declared and agreed via the SA302 or Tax Overview as well as the profit from the rental properties : this has a bearing for those who are either on the borderline of being a Higher Rate Tax Payer or are already classified in that bracket.

                          Lenders are now placing their own Calculator on their web sites for anyone who may be considering submitting a new application, the most recent lender to put this calculator is Aldermore Mortgages , the negative to all this is that the potential borrowings could be much lower than previously was the case where one only had to confirm income and as long as it met the minimum threshold the loan was assessed using the relevant rental stress assessment .

                          Do please check it out as an exercise if only to give you an insight as to the current criteria for BtL assessment for Portfolio Investors. Note that the assessment does not relate to borrowing via a Limited Company.


                            FSCS invites claims following mortgage broker default

                            The Financial Services Compensation Scheme has alerted consumers that they may be eligible for compensation following a mortgage broker default.

                            Manchester-based The Mortgage Point is among 18 other financial firms the lifeboat fund is inviting consumer claims against.

                            The group also includes former IFAs with mortgage permissions such as London-based De Havilland Financial Management and Ideal Financial Solutions, of Dorset.

                            An FSCS spokesman says: “Anyone who believes they may be owed money as a result of their dealings with any of these firms should get in touch. We may be able to help you.”

                            Las month the FSCS made a similar announcement about two more mortgage brokers, Ocean Finance and Mortgages, of Staffordshire and Roseberry Mortgage Solutions, of Middlesborough.


                              Will this become the domino effect ??

                              Builder Taylor Wimpey has set aside £130m to cover leasehold disputes that have seen some new build homeowners pay rising yearly ground rents to freeholders.

                              Taylor Wimpey says it started using the lease terms ten years ago in good faith, according to the Financial Times.

                              But a wave of customer complaints have caused the firm to reconsider the clauses.

                              The company says: “We acknowledge that the introduction of these doubling clauses was not consistent with our high standards of customer service and we are sorry for the unintended financial consequence and concern that they are causing…

                              “For those customers who acquired from, and remain the owner of a Taylor Wimpey leasehold property which is subject to this specific doubling clause, we have already entered into negotiations with the respective owners of the majority of the freeholds to alter the terms of the doubling lease to materially less expensive ground rent review terms, with the Group bearing the financial cost of doing so.

                              “As a consequence of this decision, the Group will make a gross provision of c.£130 million that will be recorded as an exceptional item in the 2017 first half accounts, which will have an impact of c.3 per cent of net assets.”

                              Some property developers have been accused of selling houses under leasehold terms that mean homeowners pay ground rents to the freeholder that can double every five or ten years.


                                Black Horse & Connells top Complaint List for H2 2016

                                In an article in Mortgage Strategy the following facts were disclosed.

                                According to latest figures released by The Financial Conduct Authority Connells was the most complained about home finance intermediary in H2 2016 with 18.1 customer challenges per 1000 sales followed by Sesame with 2.3 per 1000 and Firstplus Financial Group with 1.6.

                                Black Horse was the most complained about home finance provider in the second half of 2016:The Llloyds Banking arm, which finances motor homes and caravans received 1,115 complaints per 1000 balances outstanding in the period, the second most complained about firm was Landmark Mortgages (Formerly Northern Rock Asset Management and is made up of bad Northern Rock debts) with 43 FCA Grievances per 1000 balances. The third most complained about firm was Blemain Finance at 42.4 followed by Pepper (UK) at 42% and Shawbrook Bank at 19.9.


                                Latest Activity


                                • Anyone Buying At Present?
                                  by woodbine66
                                  Wondering if BTL investors are buying at the moment, taking into account property prices and uncertainty over Corona, jobs and the economy? Property prices still seem to be holding up near me and lots still selling. Anyone care to predict what's going to happen to prices and demand in near future....
                                  04-08-2020, 12:27 PM
                                • Reply to Anyone Buying At Present?
                                  by amy131
                                  I own a 4 bed property in Bristol. Cost £195k in 2016, now worth £230-240k, all rooms very good sizes, ex. LA. The house has two reception rooms so I use one as the fourth bedroom. My rental yield currently is 8% with all bedrooms rented based on purchase price which is now on the low side for the...
                                  10-08-2020, 23:14 PM
                                • Reply to Anyone Buying At Present?
                                  by hech123
                                  Look further North. You can much better yields and the market is only getting going there. Lots of interest and competition...
                                  10-08-2020, 18:30 PM
                                • Mortgage News
                                  by loanarranger
                                  The following article has appeared in one of the Mortgage Trade journals reporting on views expressed by the Association of Mortgage Intermediaries an influential trade body within the mortgage industry.

                                  "Mortgage rates are likely to rise in the first quarter of 2016 as lenders look...
                                  23-12-2015, 19:43 PM
                                • Reply to Mortgage News
                                  by loanarranger
                                  Gatehouse Bank have announced their withdrawal from accepting mortgage applications on New Build Flats citing an increased volume of application for both Homeownership but also BtL investors. I suspect that they like other lenders are taking cover for the present until certification of Fire Safety compliance...
                                  10-08-2020, 09:41 AM
                                • Mortgages - Buy 2 Let v. Vacation Rentals
                                  by Halfbob
                                  On verge of organising a Buy to Let interest only mortgage at a pretty good rate but had a last minute rethink. May now do vacation Rentals in the property we're buying as the location lends itself to that and there's the Tax Advantage of Mortgage Interest being an allowable deduction from the Taxable...
                                  08-08-2020, 12:21 PM
                                • Reply to Mortgages - Buy 2 Let v. Vacation Rentals
                                  by Halfbob
                                  Interesting, thanks for that. It would very much be a "summer season" and other School Holiday type Vacation Property, so that wouldn't be disastrous. Other than the fact that if it's available to Let for less than 210 days per year you can't claim Mortgage Interest Tax Relief. But then...
                                  09-08-2020, 18:53 PM
                                • Reply to Anyone Buying At Present?
                                  by doobrey
                                  Yields seem fairly horrendous. £850 pcm on a £220k property is 4.6% gross with no voids.

                                  Rental return is low, compliance requirements and risk are high.

                                  I don't see much of a case for buying unless you can do something clever or find something genuinely underpriced.
                                  09-08-2020, 16:05 PM
                                • Reply to Mortgages - Buy 2 Let v. Vacation Rentals
                                  by Section20z
                                  Don't forget that London already restricts holiday letting to 90 days a year (without planning consent) and it is likely other areas will follow with similar restrictions.
                                  09-08-2020, 14:45 PM