A majority (65%) of lenders are worried about an increase in buy-to-let repossessions if rental yields reduce, according to the annual Moore Blatch 2010 repossessions report.
The research from the solicitor firm, which compiled the views of lenders and asset managers, reveals that 61% are worried about an increase if there is a downward correction in house prices. 6% believe there will be an increase in repossessions if interest rates rise.
Paul Walshe, head of lender services, Moore Blatch, commented: “The reduced cost of borrowing is a double edged sword. Whilst it is true that it is cheaper for landlords, it also means that competition is greater, tenants may consider buying and, ultimately, rates will go up. We are still calling for FSA investment-style risk warnings for all buy-to-let loans.”
