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Inside Out explores buy-to-let meltdown
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There are more than a million buy-to-let mortgages in the UK.
But, as the credit crunch bites, many owners are struggling and some may face repossession and even bankruptcy as this week's Inside Out on BBC One West Midlands discovers.
Broadcaster and journalist Bill Buckley thought it would make
sound financial sense to buy a slice of Birmingham's iconic
Rotunda building.
So, with the help of a buy-to-let mortgage,
he invested £286,000 on one of its luxury flats in 2007.
When the former That's Life! presenter became worried for his
investment by the effects of the credit crunch he went to see
Tony McKeon, the director of Residential Lettings Group, to
find out about the state of the market.
Tony says: "Five years ago mortgages were quite low and the interest rate
on a mortgage was around 4.2 per cent, but now you're more
likely to pay up to 6.9 per cent."
He adds: "Your honeymoon period is over, interest rates have gone up,
so obviously you're forking out of your pocket to cover the
mortgage on the property that you had bought."
Tony McKeon believes Bill's flat is now worth £215,000 – so in
just one year Bill may have lost £60,000.
And Bill isn't the only landlord that has lost money.
Christopher Miller is a Midlands landlord who bought 31 flats
on buy-to-let mortgages.
When his mortgage repayments started
to outweigh his rental income he tried to borrow more – but
the banks refused.
Christopher's properties were repossessed
and he lost £3million.
"Stoke is really the worst example I have," says
Christopher.
"I had six units in Stoke and I paid about
£110,000 for the cheapest and £137,000 for a two-bedroom
flat.
"Three of them sold at auction and they got between £50,000
and £55,000 each."
Christopher now believes that the flats were overvalued and is
one of many landlords trying to sue their valuers.
Also in this week's Inside Out
 Birmingham Blaze, the city's gay-friendly football team, are featured as the programme looks back on Justin Fashanu's life,
10 years after the sport's only openly gay player committed
suicide.
Former UB40 frontman Ali Campbell considers another kind of
division: in his home city of Birmingham which, he believes,
is becoming increasingly segregated with people sticking to
their own "type".
Notes to Editors
Inside Out is also available online via
bbc.co.uk/insideout for seven days from 8.00pm,
Wednesday 22 October.
Inside Out, BBC One West Midlands, 7.30pm, Wednesday 22 October 2008
BBC Birmingham Press Office
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