Small landlords 'under mounting pressure'

Posted: 07 Oct 2008 14:16:07 GMT

With the property prices plummeting and mortgages vanishing from the market at an alarming rate, the buy-to-let boom appears to have finally come to an end.

According to Terry Balfour, director of debt product comparison website IVA.com, there are now storms on the horizon for smaller, cash-strapped buy-to-let investors.

He warned: "Plummeting property prices and the effects of the global financial crisis are having disastrous effects on property market investors at the lower end of the scale."

Just a few years ago, property prices were reaching unprecedented highs and cheap finance meant that second properties were an affordable investment for ordinary people looking to save for the future.

"Since living costs have gone through the roof and mortgage lenders have battened down the hatches in the wake of the credit crunch, this plan has backfired for many," said Mr Balfour.

The buy-to-let mortgage market is rapidly shrinking. Currently there are just 481 different products available, down from 662 one week ago.

According to broker Mortgage Force, this reduction has largely been caused by the nationalisation of specialist provider Bradford & Bingley.

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