BBC2 now - how to beat the tough times, shocking...
Discussion
The show featured a buy to let lanlord. A clock maker claims to be on about £20k a year. Has over 100 btls, owing about £6 million. He seems surprised that the .59% introductory rate can suddenly go to 4.79%. Do these idiots read anything? I am shocked. I assumed a novice BTLer may have been caught with 3 or 4 properties, but over 100?
What on earth were the lenders doing? Clearly not any due diligence. Though on a a £50k BTL, I am not surprised they just write the business without any checks.
Stunned. 100 properties, £6 million in borrowings on a £20 k income.
We are fvcked on Friday when the banking stress test results are in.
What on earth were the lenders doing? Clearly not any due diligence. Though on a a £50k BTL, I am not surprised they just write the business without any checks.
Stunned. 100 properties, £6 million in borrowings on a £20 k income.
We are fvcked on Friday when the banking stress test results are in.
johnfm said:
The show featured a buy to let lanlord. A clock maker claims to be on about £20k a year. Has over 100 btls, owing about £6 million. He seems surprised that the .59% introductory rate can suddenly go to 4.79%. Do these idiots read anything? I am shocked. I assumed a novice BTLer may have been caught with 3 or 4 properties, but over 100?
What on earth were the lenders doing? Clearly not any due diligence. Though on a a £50k BTL, I am not surprised they just write the business without any checks.
Stunned. 100 properties, £6 million in borrowings on a £20 k income.
We are fvcked on Friday when the banking stress test results are in.
Errr, his income is a lot more than £20k!!! What on earth were the lenders doing? Clearly not any due diligence. Though on a a £50k BTL, I am not surprised they just write the business without any checks.
Stunned. 100 properties, £6 million in borrowings on a £20 k income.
We are fvcked on Friday when the banking stress test results are in.
I'd the rents don't cover the interest increases then he's in trouble and thus he got it wrong.
Edited by Dracoro on Wednesday 21st July 01:52
johnfm said:
It gets worse!
Trainee solicitor with £60k of debt (£25 k student loan, £17k other professional fees)
he earns £17 k!!
Jeez!
Trainee solicitor with £60k of debt (£25 k student loan, £17k other professional fees)
he earns £17 k!!
Jeez!
but he does have high future earnings so nothing insurmountable. If he had an average job where salary wasn't gong to up much then yes he'd be an idiot.
Dracoro said:
johnfm said:
The show featured a buy to let lanlord. A clock maker claims to be on about £20k a year. Has over 100 btls, owing about £6 million. He seems surprised that the .59% introductory rate can suddenly go to 4.79%. Do these idiots read anything? I am shocked. I assumed a novice BTLer may have been caught with 3 or 4 properties, but over 100?
What on earth were the lenders doing? Clearly not any due diligence. Though on a a £50k BTL, I am not surprised they just write the business without any checks.
Stunned. 100 properties, £6 million in borrowings on a £20 k income.
We are fvcked on Friday when the banking stress test results are in.
Errr, his income is a lot more than £20k!!! What on earth were the lenders doing? Clearly not any due diligence. Though on a a £50k BTL, I am not surprised they just write the business without any checks.
Stunned. 100 properties, £6 million in borrowings on a £20 k income.
We are fvcked on Friday when the banking stress test results are in.
I'd the rents don't cover the interest increases then he's in trouble and thus he got it wrong.
Yes, I am aware that projected rental incomes 'should' be greater than £20k. They should have been 130% of his repayments, but no doubt his model was interest only, and keep buying.
The fact remains, he was never in a position to cover shortfalls with his own income if things got sticky.
Edited by Dracoro on Wednesday 21st July 01:52
johnfm said:
Dracoro
if he is a trainee on just £17k, he will be at a high street law firm doing PI or family or conveyancing. Future earnings may touch £50k if he is lucky.
Oh quite, but I assumed (maybe wrongly) that if he has paid £17k in professional fees (I assume as part of his training?) then he'd be onto earning a fair whack in future.if he is a trainee on just £17k, he will be at a high street law firm doing PI or family or conveyancing. Future earnings may touch £50k if he is lucky.
johnfm said:
Dracoro said:
johnfm said:
The show featured a buy to let lanlord. A clock maker claims to be on about £20k a year. Has over 100 btls, owing about £6 million. He seems surprised that the .59% introductory rate can suddenly go to 4.79%. Do these idiots read anything? I am shocked. I assumed a novice BTLer may have been caught with 3 or 4 properties, but over 100?
What on earth were the lenders doing? Clearly not any due diligence. Though on a a £50k BTL, I am not surprised they just write the business without any checks.
Stunned. 100 properties, £6 million in borrowings on a £20 k income.
We are fvcked on Friday when the banking stress test results are in.
Errr, his income is a lot more than £20k!!! What on earth were the lenders doing? Clearly not any due diligence. Though on a a £50k BTL, I am not surprised they just write the business without any checks.
Stunned. 100 properties, £6 million in borrowings on a £20 k income.
We are fvcked on Friday when the banking stress test results are in.
I'd the rents don't cover the interest increases then he's in trouble and thus he got it wrong.
The fact remains, he was never in a position to cover shortfalls with his own income if things got sticky.
That said, a lot of people (this guy as well maybe) may well be finding that their rental income is lower than their repayments (by a fair amount in many cases) and will have to sell up (if they can). This will end up over supplying the sale market. Many BTLs are the lower end of the market (flats etc.) where there is a lack of FTB who don't have large deposits and can't get large mortgages anymore. I suspect a crash is coming soon but we'll see, no one "knows" until after the fact.
Edited by Dracoro on Wednesday 21st July 08:50
Dracoro said:
johnfm said:
It gets worse!
Trainee solicitor with £60k of debt (£25 k student loan, £17k other professional fees)
he earns £17 k!!
Jeez!
Trainee solicitor with £60k of debt (£25 k student loan, £17k other professional fees)
he earns £17 k!!
Jeez!
but he does have high future earnings so nothing insurmountable. If he had an average job where salary wasn't gong to up much then yes he'd be an idiot.
The £17K professional fees loan may also be on very competitive terms, possibly interest free, from his employer rather than a bank.
Not sure where the other £18k of debt is?
Still, not ideal to have that amount of debt at his age, but it's not quite the same as racking up £60K on a credit card, which is what is seemed to be implied.
Unfortunately, TV is never interested in giving straight, parctical, financial advice to "normal" people. All it wants to do is portray extreme situations so that the viewing public can be shocked/amazed/disgusted etc etc at the individual's predicament.
I deliberately avoided this programme because I had a feeling that it would have a "Wow, weren't these people incredibly stupid" format rather than straight, sensible sdvice.
If you want sensible financial advice from the media, the only really worthwhile place to go is BBC Radio 4 (Money Box, Money Box Live and You and Yours).
I deliberately avoided this programme because I had a feeling that it would have a "Wow, weren't these people incredibly stupid" format rather than straight, sensible sdvice.
If you want sensible financial advice from the media, the only really worthwhile place to go is BBC Radio 4 (Money Box, Money Box Live and You and Yours).
musclecarmad said:
the trainee on 17k will be at a small law firm as it's near the law society minimum wage. he will be a trainee for 2 years. he will then qualify and his earnings may go up to between £24-£29k in my experience and stay there for quite some time.
student loans charge 9% on anything you earn over £15,000 and is based on rpi. it was low but in september the loan rate will be up over 5% per year so for his £25k it will be about £1250 per year interest. If he ever does get to earn £40k his loan repayments will be about £175 per month - that will take an eternity to pay off that loan so he will be paying this for most of his working life.
his earnings will never touch £50k in my experience unless he is made a partner which is unlikely in most instances - even partners at small firms don't sometimes make £50k and don't forget they can go under as they share the risk.
his student loan will be rising at the moment as he will barely be paying anything off it as he is barely earning over £15k.
his professional studies loan will be fixed or variable prob variable and likely with hsbc or nat west. he won't have it via a firm as it's only a small firm if they pay him £17k. The repayments on that may be between 2%-7% depending on when he took the loan out.
The guy is in a whole load of doo doo but as with most I see they are interested in financing themselves up to the hilt.
Needless to say his state pension age is age 68 and he will not have started contributing to a pension.
Poor chap.
Poor Soovy. Can barely keep the wolves away from his door the poor lamb. No wonder he had to sell the 996.student loans charge 9% on anything you earn over £15,000 and is based on rpi. it was low but in september the loan rate will be up over 5% per year so for his £25k it will be about £1250 per year interest. If he ever does get to earn £40k his loan repayments will be about £175 per month - that will take an eternity to pay off that loan so he will be paying this for most of his working life.
his earnings will never touch £50k in my experience unless he is made a partner which is unlikely in most instances - even partners at small firms don't sometimes make £50k and don't forget they can go under as they share the risk.
his student loan will be rising at the moment as he will barely be paying anything off it as he is barely earning over £15k.
his professional studies loan will be fixed or variable prob variable and likely with hsbc or nat west. he won't have it via a firm as it's only a small firm if they pay him £17k. The repayments on that may be between 2%-7% depending on when he took the loan out.
The guy is in a whole load of doo doo but as with most I see they are interested in financing themselves up to the hilt.
Needless to say his state pension age is age 68 and he will not have started contributing to a pension.
Poor chap.
musclecarmad said:
student loans charge 9% on anything you earn over £15,000 and is based on rpi. it was low but in september the loan rate will be up over 5% per year so for his £25k it will be about £1250 per year interest. If he ever does get to earn £40k his loan repayments will be about £175 per month - that will take an eternity to pay off that loan so he will be paying this for most of his working life.
The March RPI rate was 4.4% so that's the max. However, there's also the bank rate + 1% clause, which if rates stay as they're will be 1.5%. Of course, the government may rip up the rules yet again.Depending where and when he graduated, the outstanding debt may be wiped after 25 years.
SLC said:
The Student Loans Company will apply 0% interest rate from 1 September 2009 – 31 August 2010 across the UK.
Seems he's actually doing well by not repaying his loan! Source: http://www.slc.co.uk/statistics/facts_figures.html
fbrs said:
johnfm said:
£25 k student loan
how the hell do you rack up 25k as a student?Edited by was8v on Wednesday 21st July 13:55
was8v said:
fbrs said:
johnfm said:
£25 k student loan
how the hell do you rack up 25k as a student?Edited by was8v on Wednesday 21st July 13:55
Edited by youngsyr on Wednesday 21st July 14:18
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