Good debt management solutions required for buy-to-let investors
Good debt management solutions required for buy-to-let investors
Tuesday 5th May 2009
A personal finance expert has said this market is no longer for the faint-hearted and anyone getting into it will find an entirely different environment to that one that existed in 2007.
The buy-to-let mortgage market has been impacted upon by the recession, perhaps for the better, according to Andrew Hagger of Moneynet.co.uk, who has said many found themselves in debt because of rush investment decisions.
Now things have changed and despite the fact that house values have fallen within reach of many and the base lending rate lowered to 0.5 per cent, "lenders no longer have an appetite for this type of business".
"Whilst buy-to-let can still prove to be a profitable medium to long term form of investment, we are now seeing a more realistic financing requirement," Mr Hagger said of the current lenders, who are stricter with their finances.
He added: "Too many people got carried away with hearing how others were raking in the monthly rental income but without appreciating the potential pitfalls or having the financial back up to cope when things didn't go according to plan."
Such things include being left with hefty mortgages to pay as a result of tenants drying up or having to sell up in a depressed market, which can still leave investors in debt.
Mr Hagger's views come as the latest figures from debt charity Credit Action - published in May - show that average household debt in the UK, including mortgages now stands at £58,350.
News article brought to you by Debt1 – UK debt management specialists.
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