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Friday, October 17, 2008

Landlords Could be Hiding a Monstrous Problem that might Continue to Bite at House Prices

The true size of the monster is unclear, and is difficult to calculate. But be sure, it exists.

We see glimpses of it through emails from landlord users, looking for help on what to do next. We hear glimpses in the press, and logic determines that it is out there.

But will we ever feel it's full force, or will this buy-to-let monster be kept submerged in the darkness?

The buy-to-let monster I talk of is the many landlords who are struggling to 'make ends meet'.

These shy animals are embarrassed and shameful of their situation. These landlords do not like to come forward into the light because they feel inadequate and daft.

They are currently funding rental losses using savings or other income. This may or may not be able to be sustained by many landlords. But for some landlords this house of cards will come crashing down and these monsters will lurch towards the light.

With an individual bankruptcy, a single residential property will land on the repossession pile. But with landlords it could be 3, 4 or 10 or 20 properties monster that is dropped onto the banks lap as the keys are posted back and the monster is unleashed.

Repossession could be swelled rapidly if numbers of landlords with property portfolios start giving up.

As recession rises on the horizon, many landlords 'other incomes' could be reduced or even halted thanks to the prospects of mass redundancies in the jobs market.

As house prices continue to fall then so could the tipping point for other landlords come to pass, adding to the repossessions, onwards it could spiral down. Euuugghhhh!!! Further house price crashes!

The more positive outlook for landlords is the possibly of another 1.5% cut in interest rates over the coming months which could help reduce rental losses. This might end up as the monster's saviour and keep it hidden in the depths.

Too late for Grant Bovey and his Imagine Homes property investment company.

My advice to landlords suffering rental loss is to stand tall, seek advice, cut costs on loans and try to save on lettings costs by self - managing property.

"Whats that coming over the hill?"

Landlords look at a ever shrinking buy-to-let mortgage market place.Try our multi buy-to-let mortgage enquiry form to get 4 major brokers to help secure you the best BTL mortgage product in difficult times.

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