Soaring numbers of buy to
let landlords are struggling to pay their loans or
having their properties repossessed. In the first half
of 2008, nearly 1,800 buy-to-let properties were repossessed,
twice as many as the same period last year.
The number of landlords who have failed to pay their
mortgage for the last three
months or more has also doubled. Many may have been relying
on the rent to fund their retirement. While tennats will
still need rental property, some landlords are finding
their rental income is not covering their mortgage payment.
The figures from the Council of Mortgage Lenders show
1.1 per cent, or 12,133, buy to let loans are in arrears,
compared with 0.63 per cent, or 5,837, in the same period
of last year.
Michael Coogan, director general of the Council of Mortgage
Lenders, said: 'The shortage of mortgage funding is creating
similar problems for buy-to-let landlords as it is for
other borrowers.
But he said the buy-to-let
landlord will benefit from the fact many people who
want to buy will be forced to keep on renting because
of the mortgage crisis. This increases the demand for
rental property, and avoids the expensive headache of
a 'rental void', when a property is unoccupied.
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