Buy to let remortgage?

Here is a prediction for you. It will become more and more difficult to remortgage your buy to let property. Banks have been burnt big time by mortgages in the USA and are tighteing their loan requirements. If you are borrowing at 40 or 50% loan to value no problems but 80 or 85% thanks but no thanks. This means as the introductory rate on aklmost all mortgages ends borrowers will end up paying standard rates which could be 2% higher.

So lets take an example you bought a 200K flat for 170K with a 170K mortgage through one of the many buy to let clubs. You flat is now worth 17)K though many have a 200K price tag but no one is buying at that level. Your mortgage was at 5% fixed and you are coming to the end of your deal. Your rental is £750 a month (though your real rent is less 10% agent fees 1 months vacant per year and say £250 of repairs a year which works out as a real rent of £666 per month.)

Your reversion rate on your interest only mortgage is 7.5% so your mortgage goes up from £708 a month to £1063. You have moved from a position of roughly break even to subsidising your tenant to around £300 a month.

You cant remortgage. No one will have you. What do you do. Do you hang in there. Losing 3.5K a year. You might if prices are expected to rise. But what if they are expected to stay flat or even drop?

If you put the property on the market you are losing £1063 a month as you won't sell it easily with a tenant in (or not for full value.) You get an offer for £150K (still 30K more than you might get in a repossesion)

You then say Oh F*** and decline the word. I'm F***ed, your F***ed we are all F***ed

What do you do?