Although many had hoped that the buy to let mortgage market would be able to weather the economic crisis, it appears as though signs of trouble are appearing. Many experts are concerned that the buy to let mortgage market will soon undergo the same issues facing the subprime market at this time. For landlords struggling to pay their high rate buy to let mortgages, this is little comfort. The true test will come over the next few months to see whether or not these mortgages will go the same route as the subprime mortgages or whether they will be able to pull through. The economic impact from this fallout could be just as bad as the current housing crisis, particularly if renters lose their homes as a result of these problems.
“Those landlords wishing to remortgage buy to let properties will find it difficult, with lenders demanding sizeable deposits or charging higher rates,” stated Louis Cumings of MoneySupermarket,
“This could force landlords to re-evaluate whether it is worthwhile staying in the sector in the current climate.
“With property prices falling though, there may well be many landlords having to sell their investment at a loss.”
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