Mortgages plc Withdrawn From The Prime Buy-to-Let Market
March 21, 2008
The wholly owned subsidiary of Merrill Lynch will continue to process prime buy to let applications until close of business on Wednesday 26th March, but will accept no new applications thereafter.
Polly Hughes, head of marketing at Mortgages plc, said:
We have seen both an increase in the number of new buy to let applications and a deterioration in credit quality, as other lenders have tightened criteria and pulled out of the market. Given the continuing difficulties in the capital markets, we have decided to pull out of the prime buy to let market for the time being and focus our resources on residential lending. However, we will continue to monitor developments carefully and, as and when the mortgage market starts to return to normal, we will review our position with regard to prime buy to let lending.
Popularity: 15%
NatWest Introduced New Buy to Let Mortgage Rates
March 20, 2008
As from today (20 March 2008), NatWest introduced new rates to two of its buy-to-let products.
NatWest buy to let mortgages:
- 5 year fixed rate (max LTV 85%) will increase to 5.99% from 5.50% with a £1,999 arrangement fee until 30 June 2013.
- 2 year discount (SVR +2.19%) (max LTV 85%) will increase to 5.75% from 5.44% with a £2,500 arrangement fee until 30 June 2010.
NatWest Mortgages Products Summary:
| Product name | Initial rate | Initial period | Arrangement fee | Max LTV | Min loan | APR |
| 2 year fixed rate online only |
5.44% |
30/4/10 |
£2,500 |
85% |
£15k |
8.2% |
| 2 year fixed rate online only |
5.64% |
30/4/10 |
£1,999 |
85% |
£15k |
8.1% |
| 2 year fixed rate |
6.44% |
30/4/10 |
£999 |
85% |
£15k |
8.2% |
| 2 year fixed rate |
6.74% |
30/4/10 |
£0 |
85% |
£15k |
8.0% |
| 2 year fixed rate remortgage |
6.74% |
30/4/10 |
£0 |
85% |
£15k |
8.0% |
| 5 year fixed rate |
5.99% |
30/6/13 |
£1,999 |
85% |
£15k |
7.7% |
| 2 year discount (SVR +2.19%) |
5.75% |
30/06/10 |
£2,500 |
85% |
£15k |
8.2% |
| 2 year tracker |
6.04% |
30/4/10 |
£999 |
85% |
£15k |
8.1% |
| 2 year tracker remortgage |
6.14% |
30/4/10 |
£999 |
85% |
£15k |
8.0% |
| Lifetime tracker (BoE rate +0.95%) |
6.20% |
N/A |
£999 |
85% |
£15k |
6.6% |
| Lifetime tracker (BoE rate +1.05%) |
6.30% |
N/A |
£999 |
85% |
£15k |
6.7% |
| Lifetime tracker remortgage (BoE rate +1.05%) |
6.30% |
N/A |
£999 |
85% |
£15k |
6.6% |
Popularity: 25%
Can You Still Make Profits in Buy to Let?
March 13, 2008
In recent years, more than 400,000 people have become landlords through buy to let, benefiting from great profits. Some experts say that it is too good to last, and the UK property market is finally set to get its reprisal. So should you stay away from buy to let opportunities, or should you take advantage of the current weakened property market to pick up cheap property?
State of the property market
According to recent figures buy to let gross profits rose over 16 per cent last year, a positive increase comparing to 13.5 per cent in 2006.
Due to interest rates hikes in the last six months of 2007, buy to let property price growth slowed down to 1.6 per cent.
Many experts warned against investing in buy to let property because property prices are likely to fall in the next two years or so. And that you should get ready to pick up some good property bargains then.
If you thinking of becoming a private landlord for the first time, you should be cautious because you need a high mortgage to cover current high property prices, and therefore you may not earn enough from the rental income to cover your mortgage monthly repayments.
Be cautious of new properties
The oversupply of newly-built properties has made finding new tenants difficult, buy to let investors should be cautious. Some property investors were forced to sell their properties under tens of thousands of their market value because they couldn’t find tenants. Some lenders have even cancelled buy to let mortgages on new properties.
Some experts say that buy to let landlords are now divided in 2 distinct classes. Amateurs who started investing recently, or got themselves financially stretched out, will not survive. Professional buy to let landlords benefit from their crunch and pick up bargain properties.
Evaluate your long term situation
The key to succeed in buy to let is to see the picture years ahead, if you want to make good money in buy to let make long term plans. Interest rates are expected to fall at some point but you need to make sure that you can still afford your monthly repayments if they rise in the future.
Take everything into consideration when doing your sums, including solicitor’s fees, mortgage arrangement, Stamp Duty, plus other expenses such as maintenance, or insurance.
And don’t forget to declare your income to the HM Revenue & Customs. You can claim tax relief most outgoing costs such as maintenance, advertising, and mortgage interest. But not on the capital borrowed.
Popularity: 29%
Buy to Let: The Best Investment
March 6, 2008
The CML has released figures today demonstrating growing confidence among buy to let investors.
In the last quarter of 2007 there were 84,800 loans advanced, which according to the CML was a considerable increase comparing with the last quarter of 2006. Buy to let landlords were in a better position to secure better mortgage deals than regular home buyers.
Stuart Law the CEO of an international property investment company – Assetz – said:
It is clear that we are not in the middle of a housing crash, with prices barely down two per cent from the highest prices of 2007 and up over five per cent year on year. Instead, we are just seeing a confused period where well-funded buyers are obtaining extremely good prices temporarily.
It is predicted that buy to let landlords will enjoy higher profits over the next 2 years. While house rents continue rising and house price stay firm.
Popularity: 8%
Cheaper Eco-Friendly Homes: Dream or Reality?
February 28, 2008
The president of the National Association of Estate Agents (NAEA) called for action in making homes greener. Stewart Lilly is keen to see more work done regarding existing homes suggesting that devices which make homes more energy efficiency should be VAT-free. He added:
[VAT rebates] can only encourage people to introduce more energy efficiency into their existing homes
Buy-to-let landlords would also benefit from this kind of VAT change, if they can also take advantage of this tax exemption in their properties as they could decrease energy bills. Consequently people would be keen to live in cheaper eco-friendly homes.
Popularity: 15%