Northern Rock 'should have been a clue'

Despite the credit crunch, solicitors in Belfast and Northern Ireland have still seen buy-to-let investors taking out mortgages, but one expert says perhaps they have been unwise.

Solicitors will remember the chaos that was caused in the Northern Rock collapse and an expert says that the event should have been a hint to property investors in Belfast and Northern Ireland that all was not well in financial markets.

Paul Holmes, chief executive officer of Firstrung, suggests that investors themselves are to blame for the fact that the buy-to-let market in Belfast and Northern Ireland has been allowed to continue.

Solicitors in Belfast and Northern Ireland will have seen most buy-to-let investors putting down a deposit of at least 15 per cent after the credit crunch.

Mr Holmes said: "In my humble opinion, lenders should have shut the door on buy-to-let completely from October onwards.

"But I'm also saying to a buy-to-let investor, we had Northern Rock with people queuing up, we had the credit markets freeze, we had house price data beginning to say that house prices were static. The list was endless about bad property news, and they kept on investing.

"Quite frankly, people queuing up for Northern Rock should have been a warning.

"So if and when it decouples and newbie buy-to-let investors find themselves in problems, then they may kick and scream with the lender but they only have themselves to blame."

Solicitors in Belfast and Northern Ireland could be forced to pursue more people for debt if the bottom falls out of buy-to-let investments.

Visit our residential property services page
 

News Categories