Expert comments on CML data - buy to let mortgages

24 November 2008

The outlook for many with buy to let mortgages may have deteriorated, an expert has suggested.

Managing director of buy to let investment site Smartlandlord.co.uk Keshav Thukaram made the comments after observing the latest data from the Council of Mortgage Lenders (CML) on arrears and repossessions, which suggested that an increasing number of landlords were among those struggling with repayments.

He commented: "The reduction in asset values due to falling property prices is putting pressure on landlords to ensure that their return on investment is covered predominantly from rental yields."

Only self-management of assets could avoid "slim" profit yields being eaten away, Mr Thukaram added.

However, he concluded, it is the unwise investors who took up mortgages of 90 per cent loan-to-value or higher who are in trouble, while there are still "pockets" around the country where rental yields are strong.

The CML figures showed that 1.44 per cent of all mortgages were in arrears of three months or more at the end of September.