A lot of clients had been sucked in to buying off plan or were offered spectacular discounts and incentives to purchase on certain developments with the promise of high rental returns and capital growth. The truth is that the incentives were built into the purchase price and in most city centers there is a massive over supply of apartments. The drop in value of some of the new build flats and apartments has in some cases been 50% over a 12-18 month period.

As you can imagine lenders are very wary about any new build property, but if you have cash there are some fantastic bargains to be had.

Lenders are far more cautious in the current market and are cherry picking on what they want to lend on. Loans to value have dropped from a maximum of 90% LTV down to 75% LTV, and the rental income test against the mortgage interest payments have tightened up with lenders following a notional rate rather than the actual BOE base rate. However if you have a 25% deposit what better time is there to purchase when property prices are on the floor.

Buy to let mortgages in the credit crunch are a little harder to find as some lenders, particularly those who hold a high proportion of new build in their portfolio are experiencing arrears and repossessions way beyond the normal expectations.