Latest research published in the annual Moore Blatch 2010 repossessions report, compiling the views of lenders and asset managers, reveals that 65% of mortgage lenders are worried about an increase in buy-to-let repossessions if rental yields reduce.
61% are worried about an increase if there is a downward correction in house prices, and 56% are worried about an increase if there were to be an increase in interest rates.
These worried attitudes were uncovered despite figures published by the Council of Mortgage Lenders showing encouraging signs of growth in gross lending for the buy-to-let market towards the end of 2009,
Paul Walshe, head of lender services, Moore Blatch, commented: “The fact that mortgage lenders are worrying for the future of the buy-to-let market is hardly surprising. The reduced cost of borrowing is a double edged sword; whilst it is true that it is cheaper for landlords, it also means that competition is greater, tenants may consider buying and, ultimately, rates will go up.
“All of this is common sense, but sadly this has been in short supply in the property market over the last couple of years. This is why we are still calling for FSA investment-style risk warnings for all buy-to-let loans.”
His comments are at odds with recent reactions to the potential FSA regulation of the buy to let sector. Organisations such as the Council of Mortgage Lenders (CML), the Building Societies Association (BSA) and the National Association of Commercial Finance Brokers (NACFB) have all been outspoken in their criticism of the proposals.
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