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  • boletus
    replied
    Originally posted by loanarranger View Post
    Don't shoot the messenger
    No problem with the messenger! I much appreciate your mortgage news contributions.

    But speaking of shooting holes, that is exactly what supporters of section 24 will do to this report.

    There is an excellent case to be made against section 24 and the industry is failing to make it.

    Osborne and his anti landlord advisors must be laughing up their sleeves.

    Leave a comment:


  • loanarranger
    replied
    Don't shoot the messenger

    Leave a comment:


  • boletus
    replied
    They haven't taken into account the probable raises in the tax threshold to 50K by 2020.

    Leave a comment:


  • loanarranger
    replied

    Single property landlords hit by BTL tax changes


    The latest report from the National Landlords Association has revealed that single property landlords are finally waking up to the fact they could be pushed in to a higher tax bracket following the introduction of new taxation rules for buy to let.

    The statement comes as recent research from the NLA shows the proportion of single property landlords who anticipate they will be moved up a tax bracket as a result of the changes has almost doubled since the end of 2016.

    Sixteen per cent of landlords with a single property now say the changes will push them into a higher income tax bracket - a rise of seven per cent compared to Q4 2016.

    By the time the changes are fully implemented in 2021 landlords’ mortgage finance costs will count towards their taxable profit. The current average annual mortgage finance costs for a single property landlord is £5,600.

    This means that those currently earning just below the upper limit of the basic income tax threshold of £43,500 could be pushed into the higher bracket of 40%, and therefore exposed to significantly more tax liabilities.

    Individuals who only let out a single property are by far the most prevalent type of landlord, representing approximately 62 per cent of the UK’s landlord population – approximately 1.5 of the estimated 2.3 million. The changes are thought to affect approximately 368,000 homes, with young couples and families potentially at the greatest risk if landlords are forced to sell up as a result.

    The NLA says that any single property landlords forced up a tax bracket would need to increase the rent by more than 11 per cent in order to continue to make a steady yield from the property, which equates to as much as £116 per calendar month more for the average rental property.

    Richard Lambert, Chief Executive Officer at the NLA, said: “Single property landlords are responsible for providing a huge proportion of the UK’s private rented homes, and these findings show that, slowly, more and more are waking up to the fact their tax bills could be significantly higher in the coming years.

    21% of landlords with just one property do not make a profit, and over the next few years those bumped up a tax bracket will find that their ability to continue to provide good quality housing will be seriously affected.

    More and more families and young couples are making their home in the private rented sector because they cannot either access social housing or afford to buy their own home. Affected landlords will have the choice of either increasing rents or selling up – so either way it’s the people they currently home who look likely to suffer the most as a result of this damaging tax change”.

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  • loanarranger
    replied
    Hi Boletus, I suspect they are making the distinction between an "amateur" landlord and " Professional Investor" for whom come August will be subject to more scrutiny by lenders as per the Prudential Regulatory Authority who have made this categorisation. There is no other reason for making this distinction.

    Leave a comment:


  • boletus
    replied
    http://www.themortgageworks.co.uk/ne...?id=2017-05-15

    We're reducing our minimum Interest Cover Ratio for lower rate tax payers
    Date 15.05.2017
    Since confirmation of the PRA guidance on BTL Underwriting Standards, we've been developing the capability to segment our minimum Interest Cover Ratio (ICR) requirements for higher and lower rate tax payers.
    So, from Wednesday 17 May 2017, we're reducing the minimum ICR from 145% to 125%, for zero and basic rate tax payers.
    But;
    The maximum portfolio size upon completion of the new application is set at three properties (all rental properties are included in this total, including any TMW applications in progress and any unencumbered properties).
    What is it about the 'magic' 3 properties that makes owning more (even unencumbered!) so dangerous for lenders?

    Leave a comment:


  • loanarranger
    replied
    The Council of Mortgage Lenders warns of worsening arrears by a "Cohort of borrowers"

    The number of mortgages in arrears fell to its lowest quarterly rate on record in Q1, however the CML highlighted that the most serious cases - cases with arrears of over 10% of the mortgage balance - saw an increase to 26,500.

    The overall number of mortgages in arrears fell slightly in the first quarter of 2017, and is down on both the previous quarter and a year ago, according to the CML's figures. There were 92,600 mortgages in arrears, representing 0.84% of all mortgages.

    However it raised concerns that "there is a minority cohort of borrowers for whom arrears are worsening".

    The number of properties taken into possession was 10% down on a year ago (though up on the fourth quarter, reflecting a usual seasonal pattern). In total, 1,900 properties were taken into possession - the eighth successive quarter of a repossession rate of 0.02%.
    In line with the normal trend of recent times, the buy-to-let arrears rate was lower than the owner-occupier arrears rate, but the repossession rate was higher.

    The CML says this is because of the high level of forbearance that lenders typically seek to extend to home-owners to try to enable them to resolve their difficulties and keep their homes wherever possible

    Leave a comment:


  • loanarranger
    replied
    House Price Increase Flat in the last quarter

    House prices in the three months to April were found to be 0.2 per cent lower than in the preceding quarter, the first quarterly decline since November 2012. A drop in prices of 0.1 per cent was recorded on a monthly basis between March and April.

    Of the latest figures, Halifax housing economist Martin Ellis says: “House prices have stagnated over the past three months. The annual rate of growth remained at 3.8 per cent in April, the lowest rate since May 2013.

    “Housing demand appears to have been curbed in recent months due to the deterioration in housing affordability caused by a sustained period of rapid house price growth during 2014-16.

    “Signs of a decline in the pace of job creation, and the beginnings of a squeeze on households’ finances as a result of increasing inflation, may also be constraining the demand for homes.


    “Continuing very low mortgage rates, together with an ongoing acute shortage of properties for sale, should nonetheless underpin house prices over the coming months.”

    Leave a comment:


  • loanarranger
    replied
    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.

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  • loanarranger
    replied
    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.

    Leave a comment:


  • loanarranger
    replied
    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.

    Leave a comment:


  • loanarranger
    replied
    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.

    Leave a comment:


  • loanarranger
    replied
    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.

    Leave a comment:


  • loanarranger
    replied
    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.”

    Leave a comment:


  • loanarranger
    replied
    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."

    Leave a comment:

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