Rise of buy-to-let-back market
Published: 21-Jun-2007
More and more landlords are targeting homeowners who are struggling with mortgage repayments, offering to buy the property and then renting it back to the original occupier, reports suggest.
Letting News reports that the number of companies looking for 'buy-to-let-back' opportunities has increased significantly in recent months as more people struggle with higher mortgage payments after interest rate increases.
Typically, the landlord buys a property from a person in financial difficulty for between 70 and 80 per cent of its value and pays all the associated costs and debt. The seller then rents back the property for less than their monthly mortgage cost was.
A spokesman for one of these companies told the website: "There's a growing level of debt in this country. People are using their houses like a blank cheque and we're at the receiving end.
"A year ago, we had about 20 to 25 competitors in this sector. Now we have more than 200."
Recent data fromBradford & Bingley showed that the buy-to-let market remained buoyant in the first half of 2007, despite steadily rising interest rates and house prices.
