Ok, many landlords are reading this and probably think I’m mad.
The credit markets are in turmoil. Banks are falling like nine pins. Getting a buy-to-let mortgage is about as easy as winning the pools. This means that as a landlord’s fixed term loan comes to an end they are forced to accept the buy-to-let lenders standard variable rate (SVR) frequently 2% or more above the Bank of England’s base rate. The SVR is often also linked to LIBOR as we explained earlier in the week.
LIBOR has been propelled skywards as inter bank lending has practically dried up.
The result is that many landlords are struggling. Not only are landlords confronted with significantly higher mortgage costs; house prices are falling through the floor. If the American model is anything to go by, they have much further to fall. More details please visit:-l0n.net crypto-house.net pet-essentials.in indianbeauty.blog mysmart.pet 123angelnumber.com sikkimfoods.com
Finally, this week we have seen the introduction of the much vaunted Energy Performance Certificate (EPC.)
Landlords including myself are facing a bill of up to a £100 for a useless piece of paper that advises landlords to use energy saving light bulbs in their rental property to save energy. Genius! Well worth the wait and the bill…..I don’t think.
BUT STOP! All is not lost. Landlords need to remember Dunkirk, the bouncing bomb, the Great Escape, we are landlords and we can endure. My advice is for landlords to hold on; grin and bear it and there is light at the end of the property investing tunnel.
Good news for landlords
The good news for landlords is that paradoxically we are going into a depression!
The first stage in the credit and asset shake out is coming to an end. Banks are consolidating, falling over being run down; this is all taking the excessive lending and bad loans out of the system. Next comes the economic depression as asset and property bubble deflates, people stop spending and unemployment grows.
Where’s the good news in that?
The result of all this is that it kills inflation and the Bank of England will be able to, and indeed be compelled to cut interest rates aggressively. This is the good news that landlords have been waiting for. Unfortunately margins on BTL mortgage rates are going to remain much higher than landlords have got used to over the last few years. We are probably looking at a rate of 1-1.5% above base. However, with interest rates likely to head towards 4% and below by the end of 2009 this is likely to give many of us landlords an opportunity for a rest bite.
So my advice to landlords is ‘hang on’. I’m not promising the return of the good times but maybe we can get to the not so bad times. Remember we can endure