Sunday, April 15, 2007
interest rates have yet to peak.
"A buy-to-let mortgage is not that dissimilar from a private equity buy-out," says Mike Lenhoff, chief strategist at Brewin Dolphin Securities. "Both are leveraged instruments. With any leveraged deal, if your income is not covering the cost of the debt taken on, then that's clearly not a good position to be in. If interest rates rise, the situation gets worse. It all comes down to cashflow. And the message coming out from central banks all over the world appears to be that interest rates have yet to peak."