Buy to let

Anyone out there using an AMC type of loan against your land to fund buy to let property purchases rather than take up a buy to let mortgages?

Is buy to let going to even be feasible in the future, given how it seems the government is doing its best to destroy the sector for the small scale investor? Given how Mr Osborn is targeting buy to let you would almost think he was a Labour chancellor!

Doubt they would lend for it at the moment. Banks arnt interested in lending for anything to do with property unless your talking about borrowing over 2 million.
 

farmerm

Member
Location
Shropshire
Anyone know the full rules for the 3% BTL/second home stamp duty that is due to come in in April? As the property we live in is not in our names a single BTL purchase would be our first property, does that mean we would not be liable for the new stamp duty. Does it matter if it is purchased with a BTL mortgague or if the funds come from elsewhere?
 

farmerm

Member
Location
Shropshire
Doubt they would lend for it at the moment. Banks arnt interested in lending for anything to do with property unless your talking about borrowing over 2 million.

Why is that then? Surely providing there is pleny of collateral banks make the same margin on lending when interest base rate is at 5% as they do when it is 0.5%? It is not only the level of security that they are concerned by along with affordability. I would think it more likely for house prices to fall by 20% than for land prices to fall by 95%, even after Brexit, or we should all be selling up pretty dam quick!
 
Why is that then? Surely providing there is pleny of collateral banks make the same margin on lending when interest base rate is at 5% as they do when it is 0.5%? It is not only the level of security that they are concerned by along with affordability. I would think it more likely for house prices to fall by 20% than for land prices to fall by 95%, even after Brexit, or we should all be selling up pretty dam quick!

Ok, a relative had a conversation with a bank recently where this came up in discussion and the bank representative said that the bank would not lend for property at the present time using agricultural assets as collateral because they feel there is a further realignment of the housing market to come. The only way they would consider it would be for larger projects, so then when asked what do you mean by larger projects, the answer was over 2 million pounds but preferably 3 million or more.

They also now for any granted loans require copies of invoices so they can see what they are lending for, rather than just transferring the loan amount to your account for you to do as you wish.
 

Donkey Oaty

Member
Location
Aberdeenshire
Anyone know the full rules for the 3% BTL/second home stamp duty that is due to come in in April? As the property we live in is not in our names a single BTL purchase would be our first property, does that mean we would not be liable for the new stamp duty. Does it matter if it is purchased with a BTL mortgague or if the funds come from elsewhere?

If you do not own a property at the moment, you are not liable for the extra tax regardless of the purpose the new property will be used for.
Some useful info here....

http://www.zoopla.co.uk/discover/buying/q-a-new-3-stamp-duty-surcharges/#XRYdSquqPwUlsOzA.97
 

Walterp

Member
Location
Pembrokeshire
Ok, a relative had a conversation with a bank recently where this came up in discussion and the bank representative said that the bank would not lend for property at the present time using agricultural assets as collateral because they feel there is a further realignment of the housing market to come. The only way they would consider it would be for larger projects, so then when asked what do you mean by larger projects, the answer was over 2 million pounds but preferably 3 million or more.

They also now for any granted loans require copies of invoices so they can see what they are lending for, rather than just transferring the loan amount to your account for you to do as you wish.
We had a similar conversation with Barclays - we're half-way thru' developing 8 barn conversions on multiple sites, disrupted by having to ...well you know the story....and the tenor of their reply was that they would be happy to lend to buy over-valued farmland, but would not be interested in any residential or commercial property development.

Whilst I would reckon the latter to be safer than the former.

Anyway, the upshot is you've got to pay for it yourself.
 
with the buy to let unless you put 50% of your own money in you won't make it pay , you will be to reliant on rising values to make a profit

Yep this is a spot on point. A friends just bought a house for £275k having put down 10% deposit. His repayment is £1100/month for 25 yrs and the rental value is £1100/month.

He worked it out he needed to put in £75k deposit to get the mortgage down to about £750/month then he'd be looking at around £400/month profit to rent it out before taxation.

This is for an unfurnished property and it's brand new so maintenance will be minimal.

Basically there's no point unless you've got surplus cash sat around but then even if you had dumping it into property when the banks are thinking there's more realignment of the entire property market to come, makes it risky.

The money is in buying run down properties at auction, renovating them, then renting them out but you need to buy well in the first place and build up a portfolio of cheap terraced ones in decent locations.
 

Forever Fendt

Member
Location
Derbyshire
Yep this is a spot on point. A friends just bought a house for £275k having put down 10% deposit. His repayment is £1100/month for 25 yrs and the rental value is £1100/month.

He worked it out he needed to put in £75k deposit to get the mortgage down to about £750/month then he'd be looking at around £400/month profit to rent it out before taxation.

This is for an unfurnished property and it's brand new so maintenance will be minimal.

Basically there's no point unless you've got surplus cash sat around but then even if you had dumping it into property when the banks are thinking there's more realignment of the entire property market to come, makes it risky.

The money is in buying run down properties at auction, renovating them, then renting them out but you need to buy well in the first place and build up a portfolio of cheap terraced ones in decent locations.
i have stuck with this and brought my first house almost 30 years ago and added others along the way i can not see any point going into buy to let with borrowing loads of money as costs will be more than expected and if your rents are at the top end of the scale you will end up with a bigger turnover of tenants and more hassle and don't buy low end houses they will become more difficult to let out in the future or you will end up with low end tenants and collect the rents yourself you get an idea whats going on at the house every month
 
i have stuck with this and brought my first house almost 30 years ago and added others along the way i can not see any point going into buy to let with borrowing loads of money as costs will be more than expected and if your rents are at the top end of the scale you will end up with a bigger turnover of tenants and more hassle and don't buy low end houses they will become more difficult to let out in the future or you will end up with low end tenants and collect the rents yourself you get an idea whats going on at the house every month

To be honest it's probably best not to do it. Know somebody else who's got 75 let out in Birmingham and he now let's fully furnished because then he owns everything in the houses so easier to get people out.

He's had issues getting people out when they've furnished it.
 

texelburger

Member
Mixed Farmer
Location
Herefordshire
Brother does student lets,has over a 1000.No long term tenants ,so less hassle.The increase in stamp has pushed purchase prices up ,but he thinks prices may well ease back after April .He said you have to know what your doing to maintain a decent margin.
 

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