(1888PressRelease)
June 12, 2009 - In the first quarter of this year, there were 1,700 buy-to-let repossessions (compared with 12,800 repossessions across the market as a whole, including buy-to-let), accounting for 0.15% of all buy-to-let mortgages. This was up from 1,300 in the last quarter of 2008 and 900 in that year’s first quarter.
With the economic downturn continuing to bite, more receivers of rent are being appointed by landlords. In such cases, the receiver maintains the property and collects rent from tenants, to pass on to the lender, allowing the tenant to remain in a property instead of losing their home. In the first quarter of 2009 there were 2,400 cases where lenders appointed a receiver of rent on buy-to-let mortgages more than three months in arrears (0.2% of all buy-to-let mortgages), up from 1,800 in the last quarter of 2008 and 100 in the first quarter of 2008.
Compared to a repossession rate of 0.11% among owner occupied properties, buy-to-let repossessions were around three times as many (0.35%). In many cases, landlords had overspeculated, paying too much for buy-to-let flats, which sometimes hadn’t been seen in advance or hadn’t even been built yet. Then, as the property market crumbled, landlords were unable to achieve the rents they expected, and were left struggling to pay the mortgage; nor could they sell as property prices plummetted.
Buy-to-let lending fell for the sixth consecutive quarter in the first three months of 2009, from 12% of all mortage lending a year ago to 6%. In comparison to some 3,662 different buy-to-let mortgages available at the peak of the boom in September 2007, there were just 218 last month (a decrease of 94%).
Borrowers now need a 25% deposit if they hope to get a buy-to-let mortgage, compared to 15% at the start of 2008. In the first quarter of 2009, there were 22,400 new buy-to-let mortgages – if this figure were projected over the rest of the year, assuming no further decline, it would mean 22,400 new buy-to-let mortgages taken out in 2009; compared to the 346,000 buy-to-let mortgages taken out in just 12 months at the height of the boom two years ago, the dramatic fall in the sector is apparent.
For press enquiries, please contact Phil Rendall on 020 7099 9026
Email: phil ( @ ) dhbuyers dot co dot uk
Web: www.decisionhomebuyers.co.uk
News provided by Decision Homebuyers, a leading UK property company offering a quick and simple solution for selling your home, no matter what the condition.
Decision Homebuyers carries out daily surveys of the national media to provide up-to-date news and commentary on the UK property market.
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