Tuesday, September 30, 2008

Amongst the gloom some GOOD news

The day when buy-to-let died

The collapse of Bradford & Bingley sounds the death knell for buy-to-let. More than 1.1million British investors put their money into property for rent, borrowing against the value of their family homes. The hope was that the rental income would cover the mortgages, while they would cash in from the supposedly inevitable rise in house prices. However, the market has now been hit by a double-whammy which threatens mass repossessions and an even bigger property market collapse than the 1990s bust.

Posted by sold out @ 12:41 PM (713 views)
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2 thoughts on “Amongst the gloom some GOOD news

  • I just ran a few numbers on this, and it’s really dire for the BTLers. Adding fees into the rates, it looks like most will be lucky to renew their mortgage fixes for much less than 7.5% now.

    A house in my own locality that was worth £200k at the peak of the market, can be rented for £800 pm. After voids, fees and expenses, that leaves the owner with a net income of about £500 pm

    If the house is 80% mortgaged, the interest on that loan will now be £1,000 pm – double the net rental income..

    If the landlord has a large portfolio to deal with, he’s going to be staring into the abyss now, even he avoided the lure of the overpriced and un-lettable city flats.

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  • Goooooood.

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