Oooh, lufflee! Thanks, TUG.
Top-ups are smallest in terms of value, but I guess value is relative - a â‚¬30,000 top up is small compared to a â‚¬540,000 ftb or mover mortgage.
It’s still an extra â‚¬30,000 (+interest) you’ve whacked onto your borrowings, and while that’s all well and good if you are going to invest it wisely, and make it work to generate a better return for you, I suspect many people do not.
I would love to know the amount of people who are topping-up or remortgaging just to cover current expenditure. The banks have made this so easy up to now, and it’s encouraged a sort of blind spending spree for the consumer ‘stuff’ the Joneses have - the 42" plasma screens, the SUVs, the holidays, the spa days, etc., and the banks are still whacking the bejaysus out of the top-up/re-mortgage/mewing markets with their trader-upper packages.
I believe that the Central Bank is mumbling some pleas to people not to get in too deep, and it’s a long time now since IFSRA published their warning on remortgaging, but we’re a nation of bloody peasants, intoxicated by our new money (AKA easily accessible credit ).
The exposure doesn’t look so bad, but as I said, I think it might be relative. While there are certainly a lot of ‘career investors’ who will possibly be savvy enough to have legged it with their booty in time, but in answer to your question, I’d say there’s a huge portion of people who’ve only bought into the whole investment property game in the last year or two, and I reckon these are the bulk of residential property investors.
These people probably bought a btl because all their friends did it, and many of these guys will not get out on time, and even if they do, it will not have been worth their while to have bought, say 12 months ago, let it out for a year, and now can’t afford to hold onto it (yields crap, interest rates, service/agency charges rising…).
There certainly seems to be a lot of exposure out there alright…