by Calculated Risk on 5/31/2008 10:32:00 PM

From The Times: Bradford & Bingley to issue profit warning

BRITAIN’s biggest lender of buy-to-let mortgages, Bradford & Bingley ... will stun the City this week with a profit warning and the departure of its embattled chief executive, Steven Crawshaw.

The announcement will trigger widespread concern that British banks are sitting on a time-bomb of rising mortgage arrears and mounting bad debt. It will also reignite fears about the viability of some of our top financial institutions.
...
Profits for this financial year will be significantly lower than analysts’ forecasts. The bank has been hit hard by mounting arrears from borrowers and squeezed margins.

"Buy-to-let" is lending to investors for the purpose of renting the property. Some of these investors were really speculators buying for appreciation.

In some areas - like London - investors accounted for a majority of new home purchases in recent years (from a 2007 article):

According to London Development Research, two-thirds of all new homes built in the capital are being bought by investors.

Now, with house prices falling in the U.K., the speculators (and their lenders) will be hit hard just like in the U.S.