(1888PressRelease)
May 25, 2007 - According to the National Institute of Economic and Social Research (NIESR), buy-to-let is "probably the weakest link" in the mortgage market.
This outlook is based on a fall in the rate of house price growth and a decline in approval rates.
As a result, NIESR is advising potential buy-to-let investors to reconsider their decision to enter the market, or at least be cautious in their approach.
"Multiple buy-to-let holdings create potential for instability," NIESR director Martin Weale told the Business.
"Anyone with a large mortgage, especially for buy-to-let, is taking a big risk."
This opinion is contrary to the one expressed by buy-to-let landlords themselves, 50 per cent of whom admitted in a poll by Paragon Mortgages earlier this month that they considered the sector to be stable.
Quick sale property leaders National Homebuyers notes that a reduction in the number of buy-to-let investors could see house prices fall as a result of reduced demand. Director Julian King says: "The market is not growing as fast as most would expect, so this is largely false confidence.
"The inability of would-be landlords to sustain their income through buy-to-let mortgages will add to the growing number of incidents that will lead to a property crash."
The homebuying firm has been claiming for a number of months that the compounding influence of interest rate rises, probable introduction of Hips, lack of first-time buyers and ability to borrow up to eight times salary will cause a downturn in the market.
Selling property to National Homebuyers allows the fast purchase of any property, often within days.
For more information,
please log onto www.nationalhomebuyers.co.uk/index.asp
or call 0870 979 8118.
