Look Out For Property Bargains Among the Panic - (It Will Help If You Have a Good Credit Rating and Lots of Cash!)
Once the BOE had to step in to help Northern Rock, there was always going to be more than a whiff of panic in the financial system
At least with retail price inflation coming down the BOE could hold the base rate at 5.75%.
But now, the whole world seems spooked because along with expected mortgage rate rises, the stock market has been hit hard – especially the banks and in particular the lenders reliant on the money markets to raise money for mortgage finance. Stand up Paragon and B&B - who also all have a a fair bit of buy to let lending
What a change from earlier in the year!
Only yesterday, lenders had been busy relaxing their lending criteria with general borrowers getting higher multiples of earnings, higher loan to value ratios and landlord borrrowers getting softer rent to interest calculations.
Now, it looks like this laxer lending regime has ended – at least as long as the credit crunch lasts
The crunch has also come at a really awful time, because back in late 2005, according to the Council for Mortgage Lenders (CML), over a half milion people took out fixed-rate mortgages, mostly for two years, at an average interest rate of just over 4.5 per cent.
Since then the Bank of England has raised base rates five times. If you add the effect of rises in rates due to the currrent crunch onto all that and you can see how people may really suffer over the next month or two.
Are there any silver linings for property investors and home buyers?
Yes. This will all mean that there could be a lot of “distressed property sellers” out there over the Autumn.
So perhaps this is an opportunity for people to buy property cheaply and more people will decide to return to renting or put off buying a house – thus pushing up rents.
The only trouble is, mortgage finance will be hard to come by, so those with a cash pile to invest and snap up property will do well, while those with none and / or with blemished credit records will be ruing their highly leveraged or bad credit position.
If you need advice on buy to let mortgages ask me.
I’m David Lawrenson from property investment mentoring company Letting Focus. I’m the author of “Successful Property Letting – How to Make Money in Buy to Let” the UK’s top selling buy to let book.
I’m a property investment expert , I contribute to newspapers and a host of property websites, write a property investment blog and run a buy to let advice service
You can read more of my property blog and details of my networking, advice, property advice and mentoring programme and property consulting at my website www.lettingfocus.com.
My next London property networking meeting is in November. Click here for details: Property Seminar Event and I am also speaking at the property investors show in London on 22nd September. I will also be a panellist at a debate in the afternoon at the show. Details here: http://www.propertyinvestor.co.uk/london/seminar.asp
What’s unique about lettingfocus.com is that we are unbiased and independent, because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.
If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2007. This blog is updated at least twice a week
At least with retail price inflation coming down the BOE could hold the base rate at 5.75%.
But now, the whole world seems spooked because along with expected mortgage rate rises, the stock market has been hit hard – especially the banks and in particular the lenders reliant on the money markets to raise money for mortgage finance. Stand up Paragon and B&B - who also all have a a fair bit of buy to let lending
What a change from earlier in the year!
Only yesterday, lenders had been busy relaxing their lending criteria with general borrowers getting higher multiples of earnings, higher loan to value ratios and landlord borrrowers getting softer rent to interest calculations.
Now, it looks like this laxer lending regime has ended – at least as long as the credit crunch lasts
The crunch has also come at a really awful time, because back in late 2005, according to the Council for Mortgage Lenders (CML), over a half milion people took out fixed-rate mortgages, mostly for two years, at an average interest rate of just over 4.5 per cent.
Since then the Bank of England has raised base rates five times. If you add the effect of rises in rates due to the currrent crunch onto all that and you can see how people may really suffer over the next month or two.
Are there any silver linings for property investors and home buyers?
Yes. This will all mean that there could be a lot of “distressed property sellers” out there over the Autumn.
So perhaps this is an opportunity for people to buy property cheaply and more people will decide to return to renting or put off buying a house – thus pushing up rents.
The only trouble is, mortgage finance will be hard to come by, so those with a cash pile to invest and snap up property will do well, while those with none and / or with blemished credit records will be ruing their highly leveraged or bad credit position.
If you need advice on buy to let mortgages ask me.
I’m David Lawrenson from property investment mentoring company Letting Focus. I’m the author of “Successful Property Letting – How to Make Money in Buy to Let” the UK’s top selling buy to let book.
I’m a property investment expert , I contribute to newspapers and a host of property websites, write a property investment blog and run a buy to let advice service
You can read more of my property blog and details of my networking, advice, property advice and mentoring programme and property consulting at my website www.lettingfocus.com.
My next London property networking meeting is in November. Click here for details: Property Seminar Event and I am also speaking at the property investors show in London on 22nd September. I will also be a panellist at a debate in the afternoon at the show. Details here: http://www.propertyinvestor.co.uk/london/seminar.asp
What’s unique about lettingfocus.com is that we are unbiased and independent, because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.
If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2007. This blog is updated at least twice a week
This entry was posted by lettingfocus, on
Monday, September 17, 2007.
