What can I do with buy-to-let? - Published:07/03/07
information Companies & markets Investing Power portfolio Campaigns Mortgages & homesMortgage featuresInsurance customer advice Broadband & phones Retirement Saving & banking Credit & loans Small commerce Tax & wills Message boards Money blog Tools & calculators inquire an expert Guides Compare & buyI bought a buy-to-let property three existence before on a fixed rate mortgage deal of 45%, which has now run outTAKE PART IN OUR SURVEY Tell us what you think of This is Money and help shape our future (you could even make £35)A ONE-MINUTE MAKEOVER If you only have one minute to learn how to sort your finances, forget the rest and read this>> Our 8-step planI have an interest-only mortgage of £230,000 on the possessions, which is now worth around £320,000, and rent it out for £1,000 per monthAs my set rate has run out I need to remortgage However, tax have risen to make potential monthly payments the same as the rental fee and many buy-to-let deals now seem to be charging big cost or carrying early repayment charges, which outdo the deal periodRoughly what interest rate could I get and will the rent only just covering the mortgage be an issue I have enough income from elsewhere to cover the mortgage if need be DM, HertsLee Grandin, managing director of Landlord Mortgages, replies: It is always a cause for concern when a property-owner struggles to meet the mortgage repayments with the rental profits However, you may take some comfort in the fact that you are not aloneWhenever interest tax climb it takes several months (or even years) for rental profits to reflect the extra cost of living but it will finally adjust, as long we do not undergo a recession In addition, the general lack of hire property in the UK will ensure that any hold up is only short term so it is inevitable that rents will climb againSo, given the above, it may be worth riding this rough patch out Fixed speed funding has now moved above 5% and agreement fees have increased but there are still some great deals available so seem to top lenders such as BM Solutions and The Mortgage Works for financingI would not be overly worried about arrangement fees as if you find a good deal they may be value paying However, the lack of rental coverage may hold back your application so I suggest you speak to a agent who will know which lenders are best for your situationYou're lucky to have had good capital growth so distant on what was probably a low yielding possessions when you bought it The extended term average yield on property is 7% If you're getting half that it income the price is too high and is in a bubble driven by too much cheap (low interest) cash Get out now and take the CGT strike, you'll still be in profitI'm in the same position, and have determined to sell them, bank the money, and make 57% risk gratis, without the hassle, repair bills etcMight be an idea to sell now, and create a nice profit If you wait, it may become harder to put up for sale Also even if house prices corrected themself by just 1%, after price rises of say 3% you would be loosing aprox £1000 per monthDo you gamble the economy is getting stronger or weaker If weaker, make for the exit while you still canAnd don't forget the assets Gains duty you need to pay on the increase in price when you put up for sale any BTL propertyAs there're many people in your place more properties will be on offer competing for potential tenants and lowering rental prices so you might find yourself paying part of the mortgage almost immediatelyBuy to let creates a shortage of unparalleled buyer properties and pushes up rents to beyond an acceptable level No understanding from me I'm afraid£1,000 per month on a flat value £320,000 means the gross rental yield before void periods, agent charge, and upkeep costs is only 375% Many landlords will be struggling similar to you and there is a risk that another interest rate rise will tilt the market as just a few more landlords than normal make a decision to sell up and unbalance the Sellers to Buyers ratio With landlords behind money every month on rent I suggest it will only take a few months in a row of no house cost growth to trigger the collective decision to sell© 2007 linked Northcliffe Digital Ltd Terms Privacy policy Advertise with us LoansCardsMortgagesInsuranceCompare the most excellent deals around with This is MoneyPlease choose a loan£ Select a loan term 12 months (1 year) 24 months (2 existence 36 months (3 existence 48 months (4 existence 60 months (5 existence 72 months (6 existence 84 months (7 existence 96 months (8 existence 108 months (9 existence 120 months (10 years) GO novel credit cardPick your favoured certificate offer Please choose 0% introductory rate No annual fee Cashback Loyalty scheme All of the above GO equilibrium transferPlease select a type of cover Life cover Home and contents Car stop working services Health - medical Health - dental.
Read More:
What Can I Do With Buy-To-Let? >>
banks increasing charges - Published:16/01/07
Banks and structure societies have increased charges by up to 20 per cent on average in the history three yearsAccording to a new account released by Defaqto, average penalties for bounced cheques, unpaid standing instructions or direct debits are now more than £30 compared to around £27 in 2003The group believes that monetary providers will move to charging accounts for all clientele and could also introduce fees for clientele who use their accounts a lotDavid Black, Defaqto's head of banking and author of the report, said: "There are significant management costs involved in providing a current explanation service and the providers must not only cover these costs but also provide a edge for profit"Someone has to pay for the service, and in the case of accounts where banks do not accuse a fee, it is those customers who go in debt and/or incur default charges," he additionalTerms of use Advertising capital Product guides Press releases About us.
Read More:
Banks Increasing Charges >>
Banking with big four costs UK £2.2bn, says Halifax - Published:02/12/06
The privilege of banking with the "big four" far above the ground street chains has cost the British community £22 billion over the history five years, Halifax has estimatedThe avoidable excess charges are down to the banks reserving inferior interest rates and overdraft charges for new clientele, claims HalifaxCompetition in the current account market has only really animated up in the past five years - in 2000 only 300,000 distorted providers, compared to highs of a million in recent natural lifeHalifax claims that it was at the front position of the newly cut-throat industry, when in 2001 it launched the best current explanation then on the market, paying four per cent and charging ten per cent on authorised overdrafts"We have taken on the high road banks in their own back enclosure, current accounts, and have taken market share by offering genuine alternatives that reward them for their loyalty," supposed Peter Jackson of HBOS (Halifax Bank of Scotland)"We have seen the reimbursement of this approach and will continue to offer clientele a fair deal in the prospect"MoneyExpert Limited is authorised and regulated by the Financial Services power (FSA Registration No 301654) The Financial Services power does not control some forms of mortgage contract, credit cards, personal.
Read More:
Banking With Big Four Costs Uk £2.2Bn, Says Halifax >>
