 Buy to Let: the horror still to come
Buy to let loans fuelled the upward spiral in property prices, and they will play a central role in sending them down again. The buy to let speculators saw only the chance to make money, not to lose it. Now losing is not only a real possibility, it is a near certainty for anyone who is not in it for the long-term, which could mean 10-15 years.
There are now officially one million buy-to-let mortgages. Unless the people who burdened themselves with these loans know what they're doing, and few buy-to-let punters really do, the most sensible thing to do in the face of continuing rising interest rates and falling property values, is head for the exit. Sooner rather than later. Trouble is the price they will get for their 'investment' will be whatever someone is prepared to pay in the present climate. That could be painful enough. But the longer they wait to sell, and the further values continue to fall, the more likely we are to see a panic.
It's a classic crash scenario. |