Response to figures released by the Council of Mortgage Lenders which show that buy-to-let landlords are losing their properties at over three times the rate of other homeowners.
Colette Murphy, Director at Braemore Property Management, said: “There’s no question that buy-to-let landlords are currently suffering from the economic conditions – particularly if they invested in property over the last few years with the minimum of down payment.
“Buy-to-let investing has usually relied on capital growth to make the investment profitable, as the rental yields were relatively low. However, as house prices have been falling over the past year or so, investors who purchased properties during the peak time in 2007 now have an asset that is actually worth less than they paid for it.
“The rental market has also recently been swelled by extra properties over the past six months or so and this has led to rents decreasing as landlords started to compete more fiercely for tenants. Anyone who bought prior to the property slump is now feeling the squeeze and, in some exceptional cases, this can lead to repossession – although, over the past 24 months, we have only seen four instances of this happening across the 850 properties on our books.
“However, it’s important to note that buy-to-let investing is not dead. There are more affordable property prices available on the market, record low interest rates and banks that are willing to lend to people who have sufficient funds in place for a deposit – so it is still a smart move to invest in bricks and mortar if you can afford to do so.
“As experts are predicting an eventual rise in property prices at some point in the future, it’s likely that anyone investing now will be able to make a gain in the long run.”
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- The Landlord & Buy to Let Show – 17 – 18 November 2010 (myfirsthomeblog.com)
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