Tenants at Risk as Homeowners Struggle With Buy to Let Mortgage Repayments
Tenants at Risk as Homeowners Struggle With Buy to Let Mortgage Repayments
New statistics issued by the Council of Mortgage Lenders (CML) have revealed despite many people struggling with mortgage repayments those who have buy to let mortgages have been hit the hardest by the credit crunch.
The figures show 176,500 new buy to let loans were issued in the second half of 2007, this has dropped significantly to 144,600 for the first half of 2008.
Housing and homelessness charity, Shelter have said they have seen repossessions and missed payments increase twice as fast as all mortgages in the buy to let sector, therefore tenants are at just as much risk of losing their residence as mortgage holders.
A closer look at the figures shows a 100 per cent increase in the number of homes being repossessed in the buy to let market when comparing the first half of 2007 to the first half of 2008. Repossessions across the rest of the mortgage market were 48 per cent more when comparing to the 2007 results.
Thousands of tenants aren’t aware of the risk they have of being evicted as the property owners struggle to meet mortgage repayments and only comes to light when the bailiffs start to bang on the door. Unfortunately tenants have very few rights if they do find themselves in this situation despite doing their part by paying rent on time.
Calls have been made from the charity for the mortgage lenders to take responsibility and ensure when repossessions occur both owners and tenants are made aware they will have to leave at least giving them some time to find new residence and sort out outstanding matters with the landlord.
Despite the worrying news, the CML the buy to let mortgage market is stable and the main problem, that is affecting the whole market, is the shortage of mortgage funding available because it is difficult to get your foot on the property ladder demand in the rental market is expected to remain strong as first time buyers are forced to continue renting for the foreseeable future.
The markets are showing signs of improvements and if you are looking to get on the property ladder or looking to remortgage you could benefit from the services of a mortgage broker . A good mortgage broker will search the whole market to ensure they are offering you the best mortgage deal available. You could save yourself a significant amount each month that can be used for other purposes or to ease the burden of large bills.
Category: Mortgage Quote
