How Has the Credit Crunch Affected the UK Mortgage Market? | George Martin Jr

Due to the current credit crunch, various buy to let mortgage lenders are making it a Herculean task for newcomers in the buy to let market to obtain mortgages.Lenders are feeling very strongly about this credit crunch and for this reason they are passing some of the stress to the buy to let landlords. Available records show that the number of mortgage products which are currently available has decreased by more than 75% since April 2007 and it is quite clear that the decrease won’t come to a halt anytime soon.HBOS is the owner of a collection of lenders such as big names like the Bank of Scotland and Halifax and it has just taken measures to exit funding the buy to let market. With such a notable institution making such moves, other big lenders are bound to tag along and cause a domino like effect with a rush to much safer havens of investment.The bottom line is that the buy to let property investor may be abandoned, by certain lenders, until the property market reverses its current trend.One more indicator of the current situation is the rates which are currently being offered to UK buy to let landlords, these rates are looking so unattractive that many investors are trying to cash our of the market and are seeking those willing to buy out their existing property portfolios.Other buy to let investors suffering the credit crunch have decided to hold but are not making any new purchases. Others still are looking for means of refinancing their existing portfolios in order to be able to weather the storm.Also due to the credit crunch, banks seem to have colluded in order to make the market decidedly uncomfortable and unbearable for novice buy to let investors. This is being done by asking for much larger deposits and increasing rates to an extent that newcomers and novices find no profit in investing in the property market.What Can Investors Do? A lot of investors are seeking to buy property overseas. Some investors are retaining their existing properties and not making any new purchases or refinancing their portfolios until the current economic situation has changed. Investors are moving into areas such as parts of London and Scotland as well as other areas where some form of stability is evident despite the credit crunch. Investors are diversifying into other investments which may have a higher potential for rewards such as venture capitalism. A number of investors are moving beyond their local communities in order to seek out certain undervalued properties which are still available in other parts of the UK. These people are availing themselves of the best available mortgage deals and waiting until the current trend reverses, then they can refinance for better rates and gain some equity back.So what is the Good News?Seasoned UK buy to let landlords with an excess in available cash can still cope with the credit crunch and avail themselves of bargains in the market.The competition in the market is much less at the moment and what this means is that investors who have the money as well as the intellect to cope under these circumstances are in a rather fortified position.People with homes to sell are finding it hard to get buyers; this is driving down the prices of various properties.Currently surveyors are unaware of the real and current market value of property and this lack of knowledge and uncertainty can open up opportunities for the savvy investor hoping to get bargains.To cope with the credit crunch, all property investors, first time investors included, must be willing to do twice the work in order to make gains and must be ready to remain in the current situation with the available higher mortgage rates. Bailing out of the buy to let market should not be considered an option. Then in a couple of years when they refinance they should be able to tap into huge profits.The summary of the entire story is that while analysts and others in their bandwagon are predicting doom and disaster, others will beat the credit crunch and thrive in this situation.What all investors, seasoned and unseasoned alike will have to ask themselves, is whether they view the market as replete with opportunity or devoid of the proverbial light at the end of the tunnel. If they don’t see the light, the approaching months may be rather difficult but if they feel positive then they may be among the few seasoned investors who thrive under such situations and weather the storms of uncertainty rather well. **Nothing on this website should be confused with financial or legal advice. If you need this, or any other type of advice, please seek the help of a competent professional. In addition, because real estate laws change all the time and differ from state to state, and even city to city in the same state, everything in these pages should be considered general marketing advice and ideas. Please see link to full Disclaimer at the bottom of this page.

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