Mortgage rates hit buy-to-let borrowers

News Category: Industry News

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Research by fund management firm Managing Partners Limited (MPL) has shown that many buy-to-let mortgage borrowers were affected by rising mortgage rates and falling property prices following the onset of the economic crisis in the UK.

MPL figures show that the number of properties owned by buy-to-let holders which were repossessed between March 2007 and June 2008 increased by 302 per cent.

Jeremy Leach, managing director at the organisation, said: "More landlords have been finding it difficult to make their payments or ensure that their property portfolio is a viable business option."

However, figures published in the Association of Residential Letting Agents' (Arla's) latest quarterly report suggest that some landlords have been able to utilise growing tenant demand to their advantage amid the economic downturn.

Difficulties in obtaining mortgage finance have led many would-be homebuyers to switch to rented accommodation - to the benefit of letting agents and buy-to-let mortgage holders.

Furthermore, Arla statistics showed that 88 per cent of landlords are not planning to sell any of their properties in the next 12 months.


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