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 Buy-to-let landlords across the country are bracing themselves for a substantial repayment problem as lenders raise their rates and arrears seemingly grow.
Britain's biggest buy-to-let lender, Bradford & Bingley, increased rates on three and five-year fixed rate loans by 0.55 per cent on Friday amidst fears that payments could fall by up to a half.
Indeed, recent figures suggest that the number of borrowers missing three or more payments between the end of last year and April has shot up by 36 per cent.
John Postlethwaite at Punter Southall Financial Management told The Times: "Private landlords are faced with a stark choice. Increase the rent, pay more or sell the property.
"The worry is if large numbers of landlords are trying to offload properties at the same time, prices will fall even further and faster than they are now."
The malaise has not been helped by the global liquidity crisis, although the Bank of England's monetary policy committee (MPC) voted to keep interest rates at five per cent at the end of last week.
Fears are now spreading that the current plight of the buy-to-let sector could drag the entire market down further, with Halifax reporting average falls of 2.4 per cent during May.
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