Landlords struggling to pay the mortgage Thursday, 14th May 2009

Landlords are struggling to meet their mortgage repayments in thier thousands as the economic downturn devastates the buy-to-let market.

Many are months behind with mortgage payments and repossessions of buy-to-let loans had also risen.

According to the Council of Mortgage Lenders there are about a million buy-to-let landlords in the UK.


There is a concern thatsern that that the buy-to-let market may produce significantly higher arrears and defaults than the owner-occupier segment.

On another front is the era of self-certification mortgages coming to an end. Self-cert loans, in which homeowners were not required to provide proof of income, were aimed at self-employed borrowers but were open to abuse. About 45 per cent of loans were approved in 2007 without a check on the borrowers’ income.

There is evidence of irresponsible self-cert lending that it would address by requiring all applications to be accompanied by proof of income.

Figures suggested that the pace of house price falls could be easing. House prices fell by 1.3 per cent in March, after a sharper drop of 2.8 per cent in February, figures from the Department for Communities and Local Government show.However, the annual decline in house prices widened to 13.6 per cent from 12.3 per cent. The figures, which are based on a sample of completed sales from 60 lenders, show that flat-owners were the hardest hit, seeing the value of their property falling by 1.9 per cent in March. Terraced houses held their value the best, falling by only 1.1 per cent during the month.Prime London asking prices have edged up for the fourth time in five months in April, suggesting that sellers are confident that buyers are returning to the market. The average asking price in prime London rose by £4,462, according to primelocation.com, the property website, an increase of 0.34 per cent. South West London showed the biggest improvement, with a monthly increase of 1.36 per cent. Wimbledon prices have risen by 4.4 per cent since March.
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