The End of an Era for Bradford & Bingley and Self Cert Mortgages
The nationalisation of Bradford & Bingley, just as Northern Rock was, spells the end of self cert mortgages and buy-to-let.
Bradford & Bingley were the leading provider of self cert mortgages and buy-to-let mortgages and it looks as if we will see these two mortgage products being phased out with B&B’s nationalisation.
Over the next couple of years B&B’s mortgages will be slowly run down and it is highly unlikely that the government will want to use taxpayer’s money for new self cert mortgages or buy-to-let mortgages.
This means that we will be looking at the end of an era for self cert mortgages and buy-to-let mortgages, as many of the other banks are loathe to offer these kinds of mortgages, noting the risk that they pose in today’s volatile climate.
The removal of both self cert mortgages and buy-to-let mortgages, will mean more pressure on house prices and on those who have buy-to-let mortgages that are going to need refinancing.
Self cert mortgages raised too much money too cheaply on global money markets, which, although helped people onto the property ladder, has landed the economy, and other people hoping to buy, in hot water.
Let’s hope that the B&B nationalisation is the last serious crisis for UK banking, but perhaps this is just optimistic. Many speculate that the worst is yet to come, but are they just scare mongering. Although we could be looking at the temporary shelving of self cert, this surely cannot be the end of a mortgage product that gives opportunity to those who cannot prove their income. Within this in mind, perhaps the Government and FSA should just be reassessing this type of mortgage and bring in tighter rules and regs to govern these types of mortgages.
