Tuesday, Jun 05, 2007
FSA reveals BTL house of cards
Home.co.uk News: No disguising BTL 'scrap-heap'
Research by the Financial Services Authority (FSA) has revealed the extent of buy-to-let repossessions, prompting issues of repayment, regulation and lending...This is body-blow for the buy-to-let lobby and a wake-up call for intermediaries, as It looks like buy-to-let chickens are finally coming home to roost. More investors who bought new properties from developers at over-inflated prices are unable to cover mortgage payments with the rental income, have seen little or no capital appreciation, and are simply walking away.
Posted by tinecu @ 11:28 AM (191 views) Add Comment
4 Comments
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1. confused76 said...
Very interesting, i recommend reading it
2. sold 2 rent 1 said...
3 good paragraphs
Unsurprisingly, many of the repossessed properties were new flats, many purchased direct from the developer with supposed discounts or rental guarantee periods. Curiously, many borrowers had disguised their buy-to-let property as an ordinary owner-occupier loan presumably to obtain a larger loan-to-value.
Cummings goes on to say, one of the things that concerns me is the downward drift in lending criteria generally not just in buy-to-let. Lenders chasing business are relaxing their lending criteria just as mortgage rates are rising. When a major mortgage lender says it is ignoring county court judgement s on its prime mortgage lending I think we should be concerned.
Lenders and mortgage intermediaries should remind themselves what is happening in the US where lenders all but abandoned all reasonable lending criteria with disastrous results.
3. Ash4781 said...
And they said there wasn't any subprime!
4. Orwell said...
The City Wire article is more interesting:
Mortgages: We're up to our arrears in debt