Mortgages -
Robust Demand for Buy to Let Mortgages - 22/04/2008
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Bradford and Bingley claim that they have enough funds to last through until 2009, denying rumours that it would have to sell new shares to its investors in order to raise money.
As with other high street bank they have raised their prices in recent weeks and tightened up on lending. Interest rates have been put up and higher deposits are being demanded for mortgages.
The bank released this statement: “We have repriced our mortgage products in recent weeks which has widened new business margins considerably, more than compensating for the higher cost of funds on these most recent loans”
However, the bank did admit that they are charging new borrowers higher levels of interest than they are paying on the financial market. They have struggled with high arrears, prompting rumours that the bank is in trouble.
As many customers fail to keep up with their repayments the bank is suffering as arrears rise. More and more customers are struggling to keep up loan and mortgage repayments as the economic slowdown hits. In recent weeks there has been an increase in those falling into arrears.
Despite this, the bank says that the buy to let market is doing well. With high tenant demand and an increase in rent prices, the buy to let market remains profitable.
“Demand for buy-to-let remains robust, with landlords reporting continuing tenant demand and rising rents,” the bank said.
“Arrears levels have continued to rise in the first quarter, reflecting increasing payment strain,” it added.
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