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Buy-to-let loans plummet 65% in a year

Statistics from the Council of Mortgage Lenders also show that the number of new buy-to-let mortgages dropped 56% in the same period.

There were just 37,000 new buy-to-let loans in the last three months of 2008, worth £3.9bn, a 19% fall by value compared with the previous quarter.

Buy-to-let arrears also rose and at the end of 2008, 2.32% of buy-to-let mortgages were over three months in arrears, higher than in the mainstream mortgage market.The CML said one of the reasons for the rise in arrears was fraud.

Last year, HMRC announced a new initiative to get information from lettings agents to reveal records, potentially showing landlords who have been hiding rental income and capital gains from the taxman.But Keshav Thukaram, managing director of Smartlandlord, a website for landlords, said one of the main reasons for the rise in arrears was tenants’ increasing failure to pay their rents.He went on: “It is also no surprise that the number of people taking out buy-to-let loans has shrunk – there are no lenders left in the market to provide them. “

Providers of buy-to-let loans are either nationalised and throwing landlords off their books, or sitting on their loan books waiting for the securitisation markets to open again.

Landlords, like the next generation of aspiring homeowners, can’t get mortgages. And with only a negligible social sector to pick up the slack, this begs the question, where are people going to live? “

Unless the Government puts pressure on banks to lend, the UK will find itself in a housing crisis.”


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