The Council of Mortgage Lenders has indicated that new buy-to let mortgages have fallen to a five year low.
Figures just out show that 37,000 buy to let loans were taken out in the fourth quarter of last year, worth a combined total of 3.9bn pounds, this represents a drop of nearly one fifth in value while volume was down twelve percent.
It is believed that this has occurred at least in part because of a rise in the excess supply of rental properties.
This is also believed to be the cause of the rising number of payment problems with some landlords faced with long periods where their properties are without tenants. The number of properties that are more than three months in arrears has risen from 1.88 percent to 2.3 in the last quarter.
There is some good news, however with many landlords paying significantly less on their mortgages than they were when they first took them out due to falling interest rates.
A lot of people are undoubtedly having it pretty tough though and Ed Stansfield, of Capital Economics, an economic research consultancy, said: “The buy-to-let sector faces a very tough 2009.
Not only will it have to deal with growing payment problems among landlords, but the recession will keep mortgage demand very subdued.”
A sobering thought.
