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 â€œensure consistency across all productsâ€.
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 neednâ€™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 â€“ 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.
â€¦and thank you for our present â€“ 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% (Â£13,000 profit) on each investment of Â£1,000 since buy-to-let mortgages were launched in1996, 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 Â£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 (or one of the many troubles with banks when it comes to property investment) is they put on a smiley face when they want your business, but have no qualms about riding roughshod over you when it suits them, as thousands of property investor borrowers with the Bank of Ireland found out to their costs yesterday, when they saw their tracker rate mortgages double over night.
Rates for buy-to-let and some residential customersÂ 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.
According to a letter sent to the banks 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.
Itâ€™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.
9 out of 10 landlords are dissatisfied with the banks and the buy to let mortgage market according to a survey by the National Landlordâ€™s Association.
No surprise really, but hereâ€™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.â€¨(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 â€“ forget the banks and join The House Crowd instead. Using our crowdfunding model, you could make Â 25% a year on your money with no need for borrowing or worrying about increased interest rates and making mortgage payments. Simples!