Wednesday, Jun 20, 2007
BTL Exit Turns from Trickle to Gush
themovechannel.com: Global threat to house prices
survey from the Royal Institute of Chartered Surveyors shows that more than five percent of buy-to-let investors threw in the towel in the first quarter of this year, the highest proportion in two years.
This trickle could turn into a gush in the coming months as the cheap fixed-rate mortgage deals expire.
"A large number of people will be remortgaging in a rising interest rate environment," said a spokesman at the CML. "We expect this will contribute to a slowing housing market."
Posted by cash_buyer @ 01:06 PM (268 views) Add Comment
1 Comment
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1. Orwell said...
1. Fixed-rate deals are typically more than a percentage point higher than there were two years ago,"
2. U.S. Treasury yields rose to five-year highs last week while those on British government bonds have hit levels last seen in 1998. Two-year swap rates -- a benchmark for fixed-rate mortgages -- have gone up around 175 basis points in the last 18 months, meaning a dwindling number of lenders are prepared to offer fixed-rate loans at less than 6 percent.
3. Bank of England Governor Mervyn King warned people last week not to borrow on the assumption that repayments would stay the same.
4. The Council of Mortgage Lenders (CML) believe more than two million fixed-rate loans will come to an end over the next 18 months, with most borrowers facing mortgage rate increases of between 75 and 150 basis points. Almost 70 percent of new mortgages taken out since mid-2005 have been on fixed rates compared with an average of just 40 percent since 1993. But the pain for these borrowers has only been postponed.
Ouch!
Said Drew Wotherspoon at independent mortgage adviser John Charcoal. "Mortgaging to the hilt is not something we would advise."
Now they are telling these people. Methinks I feel a law suit coming on.