Speculative property investors hit by oversupply

The oversupply of flats will have the biggest impact upon those “who have just gone in for the speculative investment” says an industry expert.

Landlordzone.co.uk has said that while established landlords who invest in property as a business could profit from falls in house prices, “the people who have gone into this more recently” will be the ones “who suffer”.

Tom Entwistle, editor of www.landlordzone.co.uk said: “The problem now is that because people [landlords] are desperate, they will lower their expectations of tenants, and will go for a lower quality of tenant.”

“That has a snowball effect because it means people will struggle to let and that could destroy the quality of the whole development,” he added.

Consumers invested in property thinking prices were going to continue rising but this has not happened, concluded Mr Entwistle.

His comments arrive after the Royal Institution of Chartered Surveyors reported that the demand for flats has fallen due to “an oversupply in the market”.

Tags: rent, property investors, market, expert, landlordzone

Student mortgages remain popular

Despite the imminence of a market cool down, students are still looking to invest in property in their university town.

According to recent research by Abbey mortgages found that as many as 66,000 students already at university want to get a mortgage on their own place.

Furthermore, it found, 14 per cent of the student population hope to buy a house in their university town. This represents an impressive total of 154,000 students.

Nici Audhlam Gardiner, head of mortgages at Abbey, commented: “Britain’s student population continues to be a source of income for buy-to-let property investors, many of whom are parents of the students or the students themselves.”

He added that the most important issue to think about is affordability, especially when getting a buy-to-let mortgage.

Many students (44,000) have parents who are thinking of investing in property in a university town. The same amount hopes to invest with friends whilst at university.

With increased concern to find “green” financial products, the Co-operative bank has advised that there are many different options in this field from lenders and borrowers must shop around to find an option that best suits their needs.

Tags: Britain's student population, town, Subprime mortgage crisis, Nici Audhlam Gardiner, imminence, student, amount, property investors

Buy-to-let mortgage market affected by credit crunch

The UK’s buy-to-let mortgage market is being adversely affected by the recent credit crunch, according to a financial website.

Research from Moneyfacts.co.uk indicates that it is becoming increasingly difficult for potential property investors to obtain a buy-to-let mortgage as more and more lenders are raising the cost of taking out such a loan.

It is also thought that some lenders have decreased the number of products they have available for potential borrowers.

“The trend over recent years has been a falling rental income cover requirement, so with lenders reversing this trend, it’s a definite sign that some are taking a more cautious outlook,” commented Moneyfacts mortgage expert Julia Harris.

Nonetheless, she did note that while the buy-to-let market is “taking a battering at the moment” if you are prepared to look “there are still some very competitive deals to be found”.

“Perhaps lenders are just taking a breather, giving them time to evaluate the market and perhaps re-launch with re-priced products, which will more than likely be at a higher rate.”

Tags: property, moment, market, rate, borrowers, launch, property investors, outlook