Buy-to-let market 'will see a glut of repossessions'
News Category: Industry News
Published: 12-May-2008
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With the impact of the credit crunch continuing to take effect in the UK, the buy-to-let market is likely to experience a large number of repossessions.
That is according to Paul Holmes, operations director of Firstrung, who claimed that there will be "an absolute glut of repossessions" in the private rented sector.
He said that many buy-to-let landlords had failed to consider fundamental aspects when entering the market and were now facing higher mortgage payments.
Mr Holmes explained: "If a landlord suddenly sees his property falling in value, he's got rental voids, his mortgage has gone up and he can't increase his rent to match his mortgage, he's going to make a cold calculated business decision and hopefully throw his keys back to the lender and walk away."
The first quarter of this year saw the number of mortgage possession claims increase by 16 per cent, recent figures from the Ministry of Justice have shown.
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