Saturday, February 9, 2008

Fitch Ratings highlights the danger of the buy-to-let market

B2L in Fitch risk spotlight at RMBS conference

Fitch research reveals high regional concentration of buy-to-let loans which it says leaves such areas vulnerable if a recession occurs and results in mass selling. For example, London and the South East account for nearly 35% of all buy-to-let properties in the UK. If a sell off were to take place the value of properties in the region could plummet exacerbating existing house price issues and further affecting confidence and market deterioration.

Posted by jack c @ 04:34 PM (880 views)
Please complete the required fields.



6 thoughts on “Fitch Ratings highlights the danger of the buy-to-let market

  • From todays FT :-

    A survey this week found that lenders thought first-time buyers with high loan-to-values and buy-to-let investors who had suffered void periods were the most vulnerable to repossession.

    Paul Walshe, head of lender services at Moore Blatch, the law firm that conducted the research, expected repossessions of buy-to-let properties to rise faster than those of owner-occupied properties this year.

    One problem area is landlords who have bought overvalued new-build flats in city centres, failed to secure tenants and have been unable to afford the mortgage themselves. A glut of these properties has meant they have been hard to sell.

    Reply
    Please complete the required fields.



  • Many “convenient for station” flat developments are selling at an off-plan discount, however, that’s not what gets recorded on the Land Registry website.

    As I walk past the “buy to let specialists” of East London and M25 Essex, I see lots of flats advertised as investment properties. Special incentives like “deposits paid” and “solicitors costs covered” show the off-plan mortgagee as putting up capital, but in fact the lenders (A&L, B&B) are covering over 100% of the discounted costs. Much is made of not putting in your own cash (just taking rewards).

    If times get hard, I can see the BTLers sending the keys back.

    Reply
    Please complete the required fields.



  • it_is_going_with_a_bang says:

    “strong market fundamentals”
    what that the money is running out?

    Reply
    Please complete the required fields.



  • Last_days_of_disco says:

    How do you find out the percentage of the market that is BTLers. i.e. How much of an impact would the fact that 35% of BTL is in the Southeast have on making the house price drop in that area worse? I don’t know how to get hold of this sort of information or how to disambiguate it.

    Reply
    Please complete the required fields.



  • Either way, there is going to be a fairly substantial shake out – quite soon.

    Reply
    Please complete the required fields.



  • crash bandicoot says:

    “However, all insist that the sub-prime market and securitization will still be important in 2010.”

    I’m sure that they’e right – just not in the way that they mean.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>