Amateur landlords hit in credit crunch

May 14 2008 by Richard Globe, Liverpool Daily Post

ANYONE either intending to become a first-time property landlady or landlord investor this year must take heed of the following warning.

Due to the current credit crunch, many would-be amateur landladies and landlords will now find that banks are effectively refusing to lend to new entrants, especially within the buy-to-let market. Thousands of existing landladies and landlords right across Merseyside and Wirral also face huge increases in the cost of remortgaging.

First-time landlords, including parents eager to buy for their student children, will now find it almost impossible to enter the housing market.

Building society lenders have stopped offering buy-to-let loans or severely tightened their lending criteria form prospective landladies and landlords and many of the existing 1m buy-to-let mortgage holders approaching the end of their terms.

Chris Wood, of the National Association of Estate Agents, said: “It is the amateur investors who are feeling the pinch.”

With lenders worried about falling house prices, prospective borrowers without a substantial deposit will find it very tough to get a buy-to-let loan.

* Richard Globe, Freeland Property Letting Consultant