Loan squeeze hits buy-to-let investors
By Harry Wallop
Daily Telegraph
Last Updated: 1:53am GMT 06/03/2008
The credit crunch has started to hit buy-to-let landlords, with mortgages
for investors looking to rent out properties beginning to "dry up",
research
has shown.
The Royal Institution of Chartered Surveyors (Rics) said it was becoming
increasingly difficult for would-be landlords to enter the market.
As part of its monthly survey of letting agents, Rics asks agents whether
they are seeing more or fewer landlords entering the market and renting
out
their properties.
For the first time since it started its survey in 1998, more surveyors
re****ted a fall in new landlord instructions than a rise.
Experts said this was the most worrying sign yet that the buy-to-let boom
is
coming to an end.
In the past decade, buy-to-let has taken off, with many investors seeing
it
as a way of supplementing faltering pensions.
There are now more than one million buy-to-let mortgages outstanding.
However, banks and building societies have increasingly stopped offering
such mortgages.
Last week, the Council of Mortgage Lenders said the number of landlords
struggling to pay mortgages increased by 25 per cent to 7,600 in the final
quarter of the year.
Buy-to-let investors can still expect rising income with 27 per cent more
surveyors saying rents were rising than those who re****ted falls.
Rics spokesman Barry Hall said: "Established investors continue to reap
the
benefits of the current uncertainty in the housing market, but new
investors
are struggling to get the necessary finance to enjoy this buoyant sector."
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