Stress for some as Barclays applies buy to let mortgage rate change

With the recent industry congratulations on the success of buy to let mortgages, it is not surprising that Barclays has announced to change its buy to let mortgages against a higher rate of 5.79% albeit just to stress test.

A spokesperson from the bank commented they are introducing a new single affordability rate (which will come into effect on Monday 19 May) for all buy-to-let transactions to ensure consistency across all products.

The reasoning behind the decision is apparently to ensure customers can afford their mortgage payments and to withstand whatever may happen with the interest rates in the future.

Of course, investors with The House Crowd needn’t worry about stresses such as these that the banks bring on for landlords and property investors. With our unique crowdfunding model, we make investing in property simple, no banks, no mortgages; the smarter way to invest in property. So why not join our investors and avoid the stresses that banks cause!

The full article can be found here.

Happy 18th birthday Buy to Let mortgages

and thank you for our present… “a predicted 11% profit for the next decade” according to a recent report.

The findings from the report published in an article by The Guardian identified that with average annual returns of 16.3% (£13,000 profit) on each investment of £1,000 since buy-to-let mortgages were launched in 1996, landlords have earned more than they would have done with every other type of investment. These are clearly superb returns.

The report has been timed to coincide with the new affordability rules requiring lenders to carry out detailed checks on potential mortgagee spending and ability to pay if interest rates go up, but buy-to-let investors will be exempt from these rules.

Landlords take one in seven mortgages, and since 1996, lenders have granted 1.5m mortgages worth £174bn to buy-to-let investors.

You can read the full article here: http://www.theguardian.com/business/2014/apr/26/returns-for-buy-to-let-landlords-dwarf-other-investments

The Trouble With Banks and Mortgages

The trouble with banks (or one of the many troubles with banks when it comes to property investment) is that they put on a smiley face when they want your business, but have no qualms about riding roughshod over you when it suits them.

Thousands of property investor borrowers with the Bank of Ireland found this out to their cost yesterday, when they saw their tracker rate mortgages double overnight.

Rates for buy-to-let and some residential customers who are currently paying 2.25% will rise to BBR plus 4.49% in May. Many regard this as showing a blatant disregard for their customers.

The Trouble With Banks and Small Print

According to a letter sent to the bank’s customers, the loan agreement has a special condition (no doubt hidden in the small print no one reads) which allows them to change the tracker differential for a number of valid reasons.

Many mortgage agreements also (unbeknownst to many borrowers) have clauses allowing the bank to call in the loan at any time subject to certain conditions.

Avoid Trouble With Banks With Property Crowdfunding

It’s for reasons like this that we at The House Crowd wanted to create a different wholly transparent business model for property investment enabling both us and our investors to profit without being at the mercy of banks.

Free from the bind of bank finance and mortgages, investors in property crowdfunding can avoid trouble with banks. With as little as £1,000 they can own a share in property, benefit from potentially high returns, and put in significantly less than were they to invest in a whole property themselves.

The transparency and honesty of property crowdfunding platforms like The House Crowd are key reasons why people are slowly moving away from traditional property investment models, where there is so much risk from unscrupulous banks and mortgage lenders.

Whilst there is risk associated with any form of property investment, we believe it’s more straightforward to weather those risks with the crowdfunding model.

If you want to find out more about avoiding trouble with banks and instead exploring the new property crowdfunding model, we can help. Simply register on our site for more information about getting started, with no demands to do so straightaway.

Register Now for more Info

You can also view our current property investment opportunities by clicking below:

View our Property Investments

90% Of Landlords Are Unhappy With The Banks

9 out of 10 landlords are dissatisfied with the banks and the buy to let mortgage market according to a survey by the National Landlord’s Association.

No surprise really, but here’s what the survey reported:

89% would like to see greater competition and more lenders in the market and greater competition.

74% reported they believe that buy-to-let lenders should be more innovative.
(Mmm, not sure about that – look what happened the last time banks ‘got creative’).

Over 50% of property investors do not believe that access to buy-to-let mortgages is becoming easier despite the official line from the banks.

60% stated they were unable to obtain mortgages as the lenders would not consider borrowers in their particular circumstances.

Our advice to property investors – forget the banks and join The House Crowd instead. Using our crowdfunding model, you could make  25% a year on your money with no need for borrowing or worrying about increased interest rates and making mortgage payments. Simples!