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Buy to let self certified funding under threat

Despite the fact that the buy to let market was, at least in the 80s and 90s, a hive of activity in the UK, with many landlords obtaining mortgage funding using so-called "self certified" income statements, this particular avenue is under threat for the future. Buy to let mortgages may now be pulled under the watch of the Financial Services Authority in a move to bring everything under one roof and ensure that regulations are consistent across the board.

There is no doubt that a number of buy to let landlords have overstretched themselves in the short to medium term and indeed many have fallen behind with their mortgages and have seen some of their assets repossessed. Due to the way in which many people built their property portfolios, using older assets to cover new investments, a domino effect has been encountered by many and seen some property portfolios literally collapse to the ground.

Bradford & Bingley is one company in particular which make good money in the buy to let market, when the property sector was riding high, but was hit hard when the sector began to fall away. As we saw, the company was bailed out by the UK government with the authorities taking on the riskier mortgage asset book and the branches being sold off to a third party. One thing is for sure, the UK buy to let market will never be the same again!

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