Some Buy-to-Let landlords have been hardest hit by the current downturn in the economy and are losing properties by three times the rate of ordinary homeowners. Landlords saw the housing boom as an easy way to make money and many felt that the property boom would never end or so they thought. It seems that many amateur investors were caught out by paying too much for their investments.
Many of the investors are now seeing their investment properties being repossessed and between January and March this year 1,700 buy-to-let properties were repossessed; other statistics show that 2,400 had a receiver of rent appointed. This is where the mortgage lender takes over the property and the letting of the property and appoints a receiver of rent to collect the rent and look after the properties on their behalf.
At the start of this year it is estimated that landlords lost over 4,100 properties which is over double the number usually reported. When these figures were compared with the outstanding mortgages the true scale of the problem with buy-to-let properties became apparent. It seems that these property investors were three times as likely to lose a property as normal homeowners.
Investors in buy-to-let properties have become trapped after paying too much for their new properties and then they find that the rental income will not cover the monthly mortgage repayments. Falling house prices have made selling their properties more difficult and mortgage lenders have tightened all their lending criteria and this has lead to Buy-to-let bubble bursting.
Buy-to-let mortgage lending has fallen drastically since the start of the banking crisis and funding a mortgage is extremely challenging to say the least. If you are looking for a new mortgage for over 80% of the value of your property you will struggle to find a mortgage lender.
A recent report out from unbiased.co.uk suggests that nearly a third of people in the UK today believe that buy-to-let properties are going to make a loss in the current climate.
If you are considering buying a buy-to-let property or you are an existing investor looking to remortgage your property or you are struggling with paying your existing mortgage repayments then you need to talk to a mortgage adviser for the best possible advice for your current situation. Ideally you should talk to a mortgage adviser that has access to the ‘whole of the mortgage market’. Obtaining sound money saving advice is important when large sums of money are involved.
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