EllsBellsWells
Chatty Member
She’s been mentioned a lot in Alexandra Stedman/The Frugality’s thread a lot recently. She currently only has a rave thread so this one may offer an alternative for us to discuss.
Katherine Ormerod
- Thread starter EllsBellsWells
- Start date
1
uberoblique
Chatty Member
If she’s doing everything properly with a buy to let mortgage & has a high LTV then she’s probably in the red after costs each month as you can’t deduct mortgage interest in full anymore. A high LTV would also explain why they can’t sell it as they must be wiping out their equity.
jaymie
VIP Member
This was in 2021 before the interest rate hike but I am surprised that her rental income didn’t cover her mortgage payments
amianinfluenceryet
Active member
I think they bought at the peak of the market - I remember going to look at 2 beds near us at the same time that are now on the market for £100k less.
Dependent on your bank/situation if you flip your mortgage to a let to buy, you need to be able to guarantee that the rental income is 125% - something which, if memory serves me, Kath has openly admitted to previously isn’t the case - stating they have to pay to top up their mortgage payments on top of the rent.
The flat itself is lovely, in a good area and not a new build, so no cladding issues. I think they were just unlucky buying when the prices were wild and the likelihood is they won’t achieve that price now so have been renting it out, waiting for the market to improve. Which, as we all know, it hasn’t.
I do feel for her in this situation, an additional £900 a month on a property that you’re not even living in must sting like hell.
Dependent on your bank/situation if you flip your mortgage to a let to buy, you need to be able to guarantee that the rental income is 125% - something which, if memory serves me, Kath has openly admitted to previously isn’t the case - stating they have to pay to top up their mortgage payments on top of the rent.
The flat itself is lovely, in a good area and not a new build, so no cladding issues. I think they were just unlucky buying when the prices were wild and the likelihood is they won’t achieve that price now so have been renting it out, waiting for the market to improve. Which, as we all know, it hasn’t.
I do feel for her in this situation, an additional £900 a month on a property that you’re not even living in must sting like hell.
uberoblique
Chatty Member
Buy to let mortgages are more expensive than home owner mortgages & then there’s agency fees of about 10% of rent, insurance, repairs etc - for new landlords it’s not particularly profitable now you can’t deduct mortgage interest cost.
amianinfluenceryet
Active member
If you read my post, I was clearly talking about a let to buy mortgage - we had to do this last year when our sale fell through in order to complete on our house. Essentially, it’s a mortgage that allows you to release equity from a property in order to buy another, hence LET to BUY rather than BUY to LET, the latter is an investment whereas the former is usually a solution.
When it comes to renting out a property, you don’t have to use an agency, you can choose to let your property privately, although an agency often makes it far easier in regards to tenant quibbles, licenses etc. However, this is why banks insist that the rent is 125% - in order to cover both the mortgage repayment and additional costs.
jaymie
VIP Member
May I ask how much LTV do you need in order for them to offer you a let to buy mortgage?
EllsBellsWells
Chatty Member
I’ve done Let to Buy (similar situation to yours) but the first one was still a BTL. I have little sympathy for her tbh- nothing stopping her selling it as far as I can tell, she’s just choosing to try and make more money by holding on to it. Understandable if she’s made a loss but I feel she’s not telling the whole story. She cut could her losses at any time and reduce it to sell but she’s obviously choosing not to.
jaymie
VIP Member
What I find it very annoying is the fact that she is the poster girl for renting. She has a home, albeit a flat, is very different from people who stuck in rental because they cannot afford to save up for a deposit due to raising rent and cost of living. They are different, for her is a choice
uberoblique
Chatty Member
She hasn’t done that though. She hasn’t bought another house.
She may/may not be using an agency but I’m simply pointing out that the numbers don’t necessarily stack up for landlords particularly as she’ll also have to pay tax on part of the rental income.
amianinfluenceryet
Active member
I absolutely agree, I think that it’s better to cut your losses in this situation. From my own experience, we decided to grit our teeth and take the hit, particularly as our LTB mortgage was due for renewal early next year and with rates as they are, there was no way we could afford to pay the top up.
I guess business can’t be that bad for KO if she can afford the extra fees every month, most people can’t.
Glad she has a thread now. The moaning about renting has really annoyed me. I have 2 sons similar age to hers and live in London. We live in a 2 bed flat, but decent size with a garden. We are in a nice area but nowhere near as nice as Chiswick, probably about 2/3 of the price for property here. And when we decide we need a 3 bedroom house, we’ll move to a cheaper area - probably just outside London. Her narrative of being forced to rent just isn’t true, it’s only because they want to live in one of the most expensive parts or the most expensive city in the UK!
Also the property market has been good here recently, everyone I know with a flat on the market has sold in days so hers must be so overpriced.
Also the property market has been good here recently, everyone I know with a flat on the market has sold in days so hers must be so overpriced.
jaymie
VIP Member
Yea Plus her flat is not a new build, is a period property idk how it takes so long to sell. They probably priced it too high and aren’t motivated to sell.
No idea why is everyone thinking that you cannot raise kids in a flat. A lot of people doing it in mainland Europe.
EllsBellsWells
Chatty Member
Does anyone know why they’re not living in the flat? Is it too small?
Apparently it's very small and doesn't have two proper bedrooms.
In addition to the points everyone else has made, the new house is HUGE! I couldn't get over the tour - she even forgot to include a room downstairs as there's so many
. I can't imagine how much it costs to rent a house like that in Chiswick, even if it's not in tip top condition...Apparently it's very small and doesn't have two proper bedrooms.
In addition to the points everyone else has made, the new house is HUGE! I couldn't get over the tour - she even forgot to include a room downstairs as there's so many
I knew it was big when she said they are using the downstairs bathroom for bike storage
Totally agree re raising kids in a flat! I love it. I think we’ll only end up moving when the kids are desperate for their own rooms and I’m desperate for another bathroom! Plus secondary schools here not great. I much prefer being central ish with less space. Wouldn’t say no to a huge house in Chiswick though!