Buy-to-let investors face a tough 2008

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by Gill Montia

Speaking on Radio 4’s Today Programme, Michael Bolton, the managing director of mortgage broker Edeus, has warned of serious consequences for the buy-to-let sector, unless further action is taken to ease the credit crisis.

Mr Bolton believes that the prosperity of the UK property rental market is dependent upon politicians and bankers accepting the “severity of the grip” of the problems in the financial markets.

He is not convinced that certain key individuals fully comprehend the impact the credit squeeze is having on the buy-to-let industry.

In the medium to long-term Mr Bolton believes the sector is “as sustainable as it’s always been” but he warns that “the buy-to-let investor face a tough 2008″.

Mr Bolton’s comments are similar to those made recently by Jeremy Leaf, spokesman for the Royal Institution of Chartered Surveyors.

He also believes that “landlords should be getting more choice from the financial markets” and describes the situation as “a mess” because there is currently strong demand for rented property.

Tighter lending criteria could leave some landlords unable to finance their rental portfolios and according to Mr Leaf, this is “inevitably going to have an effect on the housing market and the wider economy”.