Unemployment could create buy-to-let lending problems
News Category: Industry News
Published: 31-Oct-2008
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If more Britons are made redundant as a result of the credit crunch and tenants’ rent payments begin to dry up, the buy-to-let industry could experience problems, an expert has warned.
Aaron Turner, chief executive officer at industry website Look4aProperty.com, said many landlords rely on tenants’ money to pay for their buy-to-let mortgages and lending problems could emerge if unemployment rises rapidly next year.
His comments come after unemployment rose by 0.5 per cent in the third quarter of 2008, with 1.79 million people out of work, according to Office for National Statistics figures reported this month.
Mr Turner said nobody can predict whether the mortgage market will pick up, but noted that the government has pledged to spend large amounts of money to pull the UK economy out of recession.
"It will all depend on how the interbank lending markets react to thepublic money coming in to them from various state bailout and where the economy goes generally," he added.
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