Mortgage Express/Bradford & Bingley

Husband_of_a_spendaholic

The media have been playing up the defaults on Buy to Lets, however on B&B's self originated mortgage book, which is mostly buy to let, the arrears are no worse than industry average.

On the loans acquired from GMAC and Kensington, arrears are much worse, however this portfolio is mostly residential self-cert and sub-prime.

Buy to Let is being made a scapegoat - I know, I have access to the figures!

opinions4u

But buy to let is a risk for a lender.

If you have 2 mortgages - one on your nice 4 bed suburban home, and another on a terrace that you rent out, which one would you prioritise when times are hard?

If you can only afford one of your two mortgages, you're not likely to protect the 'investment' property at the risk of losing your own home.

Unfortunately the wholesale funders say that is a risk they are not prepared to take with B&B. Game over.

Given that they've done the same to HBOS who have a much better balanced mortgage book, it's not a surprise.

Husband_of_a_spendaholic

I agree with you that the landlord would protect their own home first however, Bradford & Bingley appointed receivers who under the Law of Property Act, collected the rent directly from tenants. Providing a Buy to Let property was tenanted, it was easier to get the money to repay arrears on a Buy to Let then it would be on a residential mortgage.

Bradford & Bingley did not have a problem with Buy to Let arrears. The confidence in whether that would remain the case was the problem. (If rents reduced to a point where they wouldn't cover the mortgage payment)