A SPECIALIST buy-to-let expert claims landlords are pulling out of the market over fears that their properties could be repossessed. Karen Ward, author of a recent HSBC report, predicts repossessions among landlords could trigger a sharp slowdown in construction and consumer spending. But Paragon, the specialist buy-to-let lender whose own prospects are threatened by the credit crunch, claims rents are still rising – averaging £11,066 in October, 10.2% up on a year ago. John Heron, from the buy-to-let lender, said: “There is solid and growing demand for decent, affordable rented homes in all areas, providing landlords purchase property that meets tenants’ needs and expectations.” The strength of the HSBC case might hinge on whether most landlords are in for a quick killing or the long-haul as an alternative pension. Lee Grandin, from Landlord Mortgages, gave his response. He said: “It’s manic, because many traditional lenders in buy-to-let have pulled out. “Landlords are remortgaging into a Woolwich tracker at 0.69% over base rate (currently 6.44%) with no redemption charges, no legal fees, no broker fees and only a £295 arrangement fee. “I think experienced landlords are remortgaging to 75% of current value – to release cash in 2008 to grab bargains from distressed sellers.” But Mr Grandin warns novice landlords who recently took on sub-prime mortgages face huge problems in 2008 when discounted rate loans expire. He said: “They will struggle to get funding elsewhere, and could find themselves paying an extra 3% on their mortgage.” Mr Grandin added that the danger is serious because professional landlords turned much more selective after December 2005; many entering the sector since then are novices and some of their properties could end up in auction rooms. | 
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