Buy-to-let mortgages should carry warnings
Those investing in buy-to-let mortgages should be provided with the same mandatory risk warnings as other investment product, an expert has recommended.
Repossession specialist Moore Blatch has said that falling rent and high interest rates have increased the risk of the UK’s estimated 900,000 buy-to-let landlords losing money.
The company argues that although mortgages are not an investment per se, a buy-to-let property is and as such should carry sufficient warnings.
Paul Walshe, head of lender services at Moore Blatch told Channel Four News that a fall in rental yields endangers mortgage payment coverage and buy-to-let investors “may see capital erosion” as a result.
“People should be aware of the risks involved when investing any sum of money, and buy-to-let is no exception,” he explained.
This news comes as financial comparison site Moneygate.co.uk announced that the recent credit crunch will help buy-to-let landlords, who benefit from more consumers choosing to rent over taking out a mortgage.
