A recent report has indicated that following the collapse and part nationalisation of the lender Bradford & Bingley, which dealt primarily with buy to let mortgages, many landlords could find themselves faced with the prospect of either selling their properties or being repossessed. Many landlords that are coming to the end of special deals such as fixed rate mortgages will find that they are unable to get another affordable mortgage, and could find their repayments rising by hundreds of pounds a month.

One industry official stated: “Those who have bought a new-build flat in the past couple of years will be in for a shock.”

Another said: Many of those affected will be smaller, novice landlords, who went into the buy-to-let business as a way of augmenting their pensions. This kind of market is not for the faint-hearted and the landlords who may be struggling may well be the more recent entrants with more highly geared portfolios.”

Since the Labour government came into power the number of buy to let mortgages has soared from fewer than thirty thousand to more than one million. At present around 10% of all mortgages are buy to let mortgages, and in total landlords owe around £132 billion on their mortgages. One official said that already many buy to let properties that had been repossessed were being sold at auction.

He said: “Repossessions are already going up quite dramatically, and a lot of these are buy-to-let. There were also some people taking out mortgages and clouding the issue as to whether they were for them or for buy-to-let purposes. These have all gone wrong too.”

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