Buy To Let Tracker Mortgages Changed
The West Bromwich have announced that they will be increasing interest rates on it’s tracker mortgages. In order to do this they are changing the terms of the tracker loans. The change only applies to biy to let mortgages and will mean a sharp increase in monthly payments. Angry borrowers have slammed the building society and said that they will fight the changes.
Increase Is Necessary According To Building Society
Despite the Bank of England base rates still at 0.5%, borrowers with buy to let mortgages will see payments increase sharply. Some borrowers will see their mortgage payments double at a stroke. The West Bromwich said 6,700 borrowers with but to let mortgages would be affected. These borrowers took out their loans in 2006 onwards and are on a variety of interest rates.
All of the landlords are owners of multiple property portfolios and have tracker mortgage accounts. The changes are being permitted under the terms and conditions of the account which allows the society the need to run it’s business, prudently efficiently and competitively.
Sitting Tenants Properties Wanted
If you are selling with a sitting tenant we can help you. We pay up to 90% of vacant values for properties with sitting tenants. We offer a one stop service for landlords. Fed up with your tenants? Many tenants are unwilling to allow viewings on their property which can sometimes make the property difficult to sell. Most of these tenants have been in residence for many years and quite rightly have the right to refuse entry to anybody. This is not a problem for us as we can buy your property without an internal viewing!
Therefore when a sale takes place on a protected tenancy the buyer will generally have to purchase the property without actually viewing the property internally. This can sometimes cause a problem if the house or flats is not a run of the mill property which means the buyer will have to take a view on the deal. Of course a discount will apply for these types of investments as the tenant has the right to stay in the property until they die or decide to move out. Very few tenants move out because they have a good tenancy and will never get another tenancy on such favourable terms.
Sitting Tenants – Protected Tenancies
You may be wondering why an investor would want to buy a protected tenancy and the answer is quite simple. Eventually the property is going to become vacant which is when it can be sold hopefully for a profit. Providing house prices increase the landlord will sell the house when it becomes vacant. From a landlord’s point of view you need to have capital to invest in these investments because they are unmortgageable in the current climate. So if a protected tenancy is sold for £250,000, it must be bought with cash as no bank will lend against it. Therefore you have to leave the cash in the property until it becomes vacant which could be twenty years or more from now.
Of course you might get lucky and the house may become empty 12 months after you have purchased it but this is definitely the exception rather than the rule. These properties are acquired for the long-term and you should not expect the house to become vacant in the near future. The tenant has security of tenure which means that they can stay in their home until they die. You are not able to increase the rent of your own accord as this will be done by the rent office or the rent assessment panel that deals with most aspects of the tenancy. You will be entitled to a rent increase every two years. The increase will be linked to the retail prices index and normally takes a couple of weeks to be implemented.
These types of tenancies are not for everyone as they do require a little specialist knowledge and considerable cash reserves. We have been buying these houses and flats with sitting tenants across Britain and would welcome the opportunity to discuss your tenancy with you. Please call our offices for an informal chat.