Buy-To-Let Landlords Hit Hard By Recession

(BBC) – NEW RESEARCH SHOWS that buy-to-let landlords are losing their properties at over three times the rate of other homeowners.

Council of Mortgage Lenders figures show 1,700 buy-to-let properties were repossessed by lenders in the first three months of this year; but landlords lost 4,100 properties when cases of lenders appointing a receiver of rent are included.

A receiver of rent collects rent on behalf of a lender when the landlord defaults on the mortgage.

The recession is also making buy-to-let mortgages much harder to come by.

As the downturn bites, lenders are appointing more receivers of rent. In this process, a tenant is allowed to remain in a property instead of losing their home. It also gives the lender time to decide what to do with the property, whilst offsetting the mortgage interest against the rent. That in turn can help reduce the arrears faced by the landlord.

In the first three months of 2008, there were just 300 receivers of rent appointed, compared with 900 repossessions.

In the first three months of this year 2,400 receivers of rent were appointed — an eight fold increase and far more than the number of buy-to-let repossessions.

… (Telegraph, 12/06/2009) – House prices: further falls look likely


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