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.
Following on from the reports in the press last week about Chris and Denise Tudor-Whelan, I have coincidentally met five separate people recently who have been ruined by the banks for no good reason.
These people once had very successful solid property businesses â€“ all of them worth tens of millions and all of them keeping up payments on the loans they had secured against the properties. Â And yet these people were all destroyed by the small print in their loan documents; three of them being made bankrupt and two still fighting to avoid it.
What most people do not know is that the small print in their mortgage documents allows the banks to call in the loans if the borrower breaches the â€œLoan To Value Covenantsâ€.
Essentially, what this means is the banks can have your property portfolio valued periodically by a surveyor (of their choosing) and if that surveyor decides the value has dropped below a certain threshold the bank can call in the loan immediately or massively increase the interest rate because of the perceived extra risk, thus making the investment unsustainable. They are allowed to do this even if you have never missed a payment.
There is little doubt in my mind, after speaking with these people that some if not all the banks have actively pursued a policy of using this small print to destroy property investment businesses and seize their assets at a vastly reduced level.
Yes itâ€™s immoral, unethical and corrupt, but what can be done about it? There is certainly a groundswell of public opinion against the bankers. And the internet abounds with the self proclaimed â€œfree men movementâ€ seeking to remove themselves from the shackles of HMRC and the â€œbankstersâ€. They have some interesting arguments and I would love for them to be successful. Unfortunately the whole system is stacked against them so it is incredibly unlikely.
To my mind the best solution is to avoid using banks wherever you can. Give them as little power over your life as possible. Its why we set up The House Crowd so you have the choice of dealing with an ethical, transparent and fair organisation that will also give you a much better return on your money.
Read more about the Tudor Whelanâ€™s story
Read more about the how the banks operate illegally and cheat people out of their homes
Read Cartmel Butlers Report to the Parliamentary Select Committee on how banks sell on the benefit of your mortgages to privately owned offshore companies but then seek to reclaim the debt from you and repossess your property (even though you no longer owe them the money).
At a time when high-street shops are struggling more than ever, it is a welcoming relief to learn that the Government, following on from Mary Portas’s High Street Review, will be implementing a number of high street – Town Team pilots across England to further support regeneration.
Earlier this summer it was announced that twenty-seven town centres across the country, including Morecambe and Stockport, would receive a slice of a £2.7million budget and a tailored package of support for rejuvenation from both the Housing Minister and celebrity retail guru, Mary Portas, as part of the Portas Pilots.
Towns which missed out on the Portas Pilot competition are still able to apply for a new package of support, which includes multi-million pound financial incentives from the Government and access to advice and support from leading retail experts. In addition, those towns which succeed in regenerating their high streets can apply to be considered for the Future High Street X-Fund and potentially win a share of the £1million prize on offer.
The value of such initiatives cannot be underestimated from a property perspective. Breathing life back into rundown town centres not only increases the aesthetic appeal of an area, but also attracts further development, transport investment and leisure facilities – all of which are central to property value. Here’s hoping the numerous incentives on offer for an entrepreneurial approach to town centre rejuvenation can be the turning point in fortunes for high streets across the country.
At The House Crowd we use our expertise to look beyond the current state of a rundown property and consider what it can become with our investment. Informed property selection, followed by shrewd refurbishment, allows us to offer investors a typical return of 12%-14% in approximately 6 months on our short term develop and sell projects.
Moneyfacts reveals that there has been a considerable fall in buy-to-let property investment mortgages, the number of products now available is less than a fifth of those on offer five years ago. There are now 411 prime product buy-to-let deals compared with 459 a year ago and a staggering 2,265 five years ago. The average variable rate on a buy-to-let mortgage, today is 4.53%, compared with 6.23% five years ago, while the average fixed rate of 5.03% today compares with 6.03% five years ago.
Rachel Springall, spokesperson for Business Moneyfacts, said: â€œAs interest rates have fallen for buy-to-let deals, product availability and therefore choice have also dropped a staggering 82% in five years.â€ She said that competition today is â€œfocused around the price of a few products rather than a wide selection of products, which allow for other considerations such as service and additional benefitsâ€. With such a reduction in selection of products to help property investors, obviously restricting the access to property as a form of investment, do you blame people for looking for alternatives? We at The House Crowd offer a solution to this problem negating all those hurdles faced by investors â€“ our crowdfunding method of property investment offers a process where all participants have aÂ share in the profits -Â with traditional methods of investing no longer working, why not join us in thinking differently!
The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit http://thehousecrowd.com/thehousecrowd/how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments (for more information about us, visit http://thehousecrowd.com/thehousecrowd/about/our-manifesto/). If youâ€™ve read enough and want to invest now, visit http://thehousecrowd.com/thehousecrowd/invest-in-property/).
Today is the official launch of the world’s first crowdfunding property investment company. (That’s us by the way).
If you haven’t heard of crowdfunding before and want to know more you can read all about it on Wikipedia. We hope you all agree it’s a great idea that can help people achieve much better returns on their savings and do so without giving the leeches “ who’ve just decided to put up their standard variable mortgage rates – any business.
Question:Can someone please tell me what the point of signing an agreement that allows one side (i.e. the banks) to alter the agreed rate payable whenever they feel like it.
Seems somewhat unfair to me.