Options narrowing for overstreched borrowers, says IVA.com
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The debt solution comparison site says the recent crisis is prompting people to sell their investment properties but that they are faced with plummeting asking prices and difficulty selling.
Terry Balfour, director of IVA.com, says: “A couple of years ago when buy-to-let mortgages were stack ‘em high, sell ‘em cheap and property values were soaring, a second property was an affordable way for ordinary working people to try to build a nest egg for the future.
“But since living costs have gone through the roof and mortgage lenders have battened down the hatches in the wake of the credit crunch, this plan has backfired for many.”
IVA.com says it is hearing from people with quite modest incomes who just didn’t have the margins to cope with a downturn in the economy.
“The immediate obvious solution would be to sell up but with the state of the housing market right now that’s easier said than done.”
He adds: “Owning a second property was a dream come true for a great many people and so letting go of that is difficult in more ways than one, particularly if they are now in negative equity and face making a loss on top of their growing debts.
”But if they already have debts, the problem can snowball very quickly and become unmanageable. The sums just don’t add up anymore.”
