Growth of the buy-to-let market may have destabilised the housing market enough to create a housing ‘bubble' suggests a Durlacher report, as a significant number of buy-to-let investments are highly geared against other remortgaged property.
Despite the small number of buy-to-let properties held in the UK, the investment research firm suggests optimism for the future of the housing market is now overinflated, because at least 40% of buy-to-let properties were purchased on the back of remortgages for existing properties. Moreover, David Parrell, analyst at Durlacher argues the housing market in fact peaked in 2001, but continued to climb as a result of the high gearing of buy-to-let properties and the growth of self-certification mortgages. As a result of pending FSA mortgage regulation and the tightening of mortgage lende...
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