After a glut of fairly positive stories regarding the state of the buy to let market, landlordexpert.co.uk chose to bring us back down to earth with a thump with an article outlining just how difficult things still are in the property market.
They point out that Council of Mortgage Lenders figures show 1,700 buy-to-let properties were repossessed by lenders in the first three months of this year. This looks even worse when you take into account the fact that the figure increases to 4,100 properties when cases of lenders appointing a receiver of rent are included.
The article points out that a lot of the trouble still stems from the almost manic rush on property that was taking place in the last few years of the boom period. Real estate agents report that during this period people were committing to places they had never seen or, in extreme cases, that had not even been built yet in order to get into the property action. In many, many cases they paid far too much for these properties. When the recession hit, things got extremely tricky for these investors.
The article also cites the fact that banks have halted the stream of buy to let mortgages and now what is on offer is better described as a trickle. If the current trend of buy to let mortgages continues for the year then there would be an estimated total of 89,600 new buy to let mortgages being taken out in 2009. This figure is in stark contrast to 2007 when when 346,000 buy to let mortgages were snapped up.
Sometimes it is good to be reminded of the reality of the situation.
