Properties used as a future pension are facing trouble
Investors, who bought at the peak of the market and were planning on using the property as their pension, could be facing serious trouble in the next year or two.
With house prices already down 9 per cent from their peak, those landlords that took out a high loan to value loans could already be seeing their original deposit disappearing.
The 183,000 buy to let mortgages, about 18 per cent of all outstanding BTL mortgages, that were taken out in 2007 when the market peaked are the most at risk.
This would represent those investors with a significant paper loss only materialising when the properties are sold.
The idea with an investment property is that it is held for the long term.
However with many investors coming off the introductory rate mortgages in the next year or two, or who can’t remortgage to the same loan to value, then the number being forced to sell prematurely and realise a loss could dramatically increase.
August 14th 2008
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- Small falls in rates won’t help the housing market
- Let property investors benefiting from the credit crunch
- Investigation into Instant Access Properties Ltd (IAP)
- Housebuilders desperate, but not that desperate it seems
- Merger creates largest landlord association in the UK
- B and B still to pay for unsuccessful deal
- Prudence is the key for buy to let investors