Many face ruin from buy-to-let

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by Kay Murchie

Many people have been left disappointed by the buy-to-let market lately. Many have been tempted over the last few years by increasing property prices and the convenience of mortgages custom-made for buy-to-let investors.

In a buoyant market, many see buy-to-let as a get-rich-quick-scheme. However, 5 interest rate hikes since August 2006, falling property prices and those who have over-stretched themselves are finding that they are unable to pay the mortgage and being forced to hand back the keys to the bank.

There are 900,000 buy-to-let landlords in Britain, it is advised that these people set aside money to cover periods when the property is empty.

Kate Barker, the Bank of England housing guru, said last week increasing property prices have left the UK in danger of a considerable property downturn. She added that the buy-to-let market is heading for a slump and small-time property investors were ‘vulnerable’.

She also hinted that it is unlikely that the Bank of England will cut interest rates to help the market recover.

This is disappointing news for Britain’s buy-to-let owners. Some of these are ordinary people hoping to invest in their future or have a nest-egg for their retirement.