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Reinhard's Letter in the Financial Times

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It's been moved to the subscription only part, but here is the letter in full

Fantasy figures in the buy-to-let market

By Reinhard Schu

Published: August 4 2005 02:00 | Last updated: August 4 2005 02:00

From Mr Reinhard Schu.


Sir, In your front-page report (July 30) you expose the practice of avoiding lenders' deposit requirements for buy-to-let investors by overstating the value of the property. We have been warning about this and other fraudulent practices for a long time.

The Council of Mortgage Lenders and other lenders' organisations merrily continue to publish fantasy figures of allegedly low loan-to-value ratios of buy-to-let investors, when the reality looks very different. Members on our website, many of whom are industry insiders, report that mortgage fraud in the buy-to-let industry is rampant.

Apart from the practices described in your article, buy-to-let speculators are also known to have raised "deposits" on nil per cent credit cards or by remortgaging existing properties, thereby financing their "investments" often by 100 per cent.

The lenders, meanwhile, have their heads in the sand. This worked while the housing market was rising. Now that it has started to fall, the buy-to-let house of cards will soon come crashing down, with dire consequences.

Reinhard Schu,


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  • 301 Brexit, House prices and Summer 2020

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