Tuesday, Apr 22, 2008
Bradford & Bingley in the doo-doo
FT Alphaville: Bad news, BTL demand remains strong
B&B is the market leader in Buy-to-Let mortgages which offer customers 100-1000% gearing into a declining asset class where none of the risks of leverage have been explained.
BTL also offers investors a huge negative carry trade with average net property yields in the UK being 3.75% and mortgage finance now coming at almost double that.
Self Certified mortgages (liar loans as the Americans appropriately call them) where B&B takes no income verification at all are at best going to see the income of the borrower be at its weakest when the collateral value is at its weakest as overtime and bonuses diminish with a weakening economy.
Posted by little professor @ 10:24 AM (344 views) Add Comment
4 Comments
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1. jack c said...
LP - Virgin Money rumoured to be in bid approach for B&B - I'll put up a seperate post.
2. This comment has been removed as it was found to be in breach of our Blog Policies.
3. Icarus said...
B&B - what's that? Broon & Badger? Sounds like their business model.
4. letthemfall said...
Not sure how demand can be that robust, unless the investors are happy to lose money. Or maybe the "landlords" are one of these dubious property agents.