It would have to be the understatement of the decade to say that the mortgage market has seen somewhat of a change in the last few months. What was recently a rolling unstoppable machine has been well and truly stopped dead in its tracks, and now the business of giving and getting mortgages seems to have ground to a shuddering halt.



As a result of this tightening of the credit markets, lenders have decided what type of business they want and more importantly what type of business they don't want. As a result, self certification is all but a Dodo and extinct, a high loan to value mortgage is considered 80%. On that note if you say 100% mortgage to anyone in the industry they will say wow I remember those didn't they come with flared trousers and some very dubious music ha-ha. But seriously the main business area that has suffered and suffered in a big way is Buy to Lets.

The area of buy to let has undoubtedly been one of the driving forces in pushing the housing market to its peak in recent years. Nevertheless, it has proven to be detrimental to both the economy and Joe Public. The reason why I say Joe Public is because it has been ordinary folk who have bought buy to lets in an effort to make an extra income, which may be the root of the problem.

Back in the 1980s, car auctions were primarily the domain of people from the motor trade, and to see an everyday member of the public there was a rare sight indeed. However, there began a trend for people going to these auctions in an attempt to buy a fixer upper, do a bit of work on it and sell it on for a bit of a profit. Suddenly every Tom, Dick and Harry was a car expert and the auctions were full of these people, all trying to turn a fast buck.

What really happened is that a lot of ill informed people ended up paying too much money for a heap of junk which they could do absolutely nothing with, and they ultimately lost their money which they thought they had so wisely spent. The reason for this analogy is that the same situation has arisen in the housing market. People with no real knowledge have been playing entrepreneur in the housing market, with a lot more money than it takes to buy a second hand car. Many people have paid far too much for properties, some without even seeing the house in question.

I have been buying property for over ten years professionally and I don't mean I bought my own home. I have bought quite a few buy to lets. Even with all this experience I would never buy any property without seeing it and I do not know any other professional landlord who would. So why oh why do ordinary people think they can step into this market and treat it with what can only be described as reckless neglect.

Unfortunately what has happened is as the saying goes; they have ruined it for the rest of us. The irresponsible borrowing and buying has put the lenders at risk as they are finding themselves flooded with customers who can't repay their loans, and as such, the lenders now don't want to lend to anyone. Loan to value for buy to lets has dropped recently from 85% to 75% and it is estimated that with falling property prices, this will drop even further.

What we are left with is a stagnant market in a state of utter chaos. What I would propose is that the lending institutions get together to create a buy to let product that would be applicable to landlords with ten or more properties. They would then already have the assurance that these landlords are in a position to honour the loans. It would also reap benefits for the public in general in that it would at least breathe some life into the bloated corpse of today's property market.