Buy to Let Borrowers Offered More Mortgage Options
Housing-Market / Buy to Let Oct 11, 2010 - 09:28 AM GMTBy: MoneyFacts
Today there are 306 mortgages available to buy-to-let (BTL) landlords, which is just one tenth of what it was at its peak (3,648) in July 2007, but at its worst just over a year ago the number of mortgages available had fallen by 95%.
Although the market remains difficult for BTL investors, we are seeing real signs of improvement with rates falling and the number of lenders and products increasing.
Aldermore has made a big splash since entering the BTL market, while The Mortgage Works continues to offer the widest choice for borrowers.
This time last year there were 45 active lenders in the BTL sector, today there are 54. In the last month alone both Darlington BS and Paragon have returned to the sector.
The number of mortgages available continues to grow. Noticeably, the deals for landlords with a 20% deposit have seen a threefold increase in the last year, after dwindling away to virtually nothing the year before.
LTV |
October 2009 |
October 2010 |
Increase |
60% |
68 |
82 |
20.6% |
65% |
29 |
57 |
96.6% |
75% |
65 |
99 |
52.3% |
80% |
4 |
12 |
200.0% |
Source: Moneyfacts.co.uk 8.10.10 |
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BTL landlords looking to fix their mortgage repayments have seen a noticeable drop in rate, but rates have increased for anyone looking for a new variable deal.
Deal |
October 2009 |
October 2010 |
Change |
Fixed |
6.01% |
5.49% |
-0.52% |
Variable |
4.50% |
4.74% |
+0.24% |
Source: Moneyfacts.co.uk 8.10.10 |
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Michelle Slade, spokesperson for Moneyfacts.co.uk, commented:
“The BTL market has taken a big hit in the last few years, but it is slowly starting to fight back.
“Lenders are returning to the market, bringing much needed competition back to the sector.
“The best deals will continue to be offered to those with a sizable deposit, but those with just a 20% deposit are starting to see more options available.
“Rental income and tenant demand continue to rise due to an increase in people opting or needing to rent rather than buy.
“The market has seen a rise in the number of accidental landlords, as some borrowers are forced to rent out their properties in order to meet mortgage repayments.
“Affordability remains a key issue in the BTL market for both landlords and lenders alike.
“Rental income does not move with base rate and lenders are concerned that borrowers on variable rate deals may not be able to meet repayments when rates rise.
“Lenders are trying to deter landlords from taking a variable rate deal, preferring them to opt for a fixed rate deal instead.
“The BTL market still has a long way to go, but the signs are there that it may have finally turned a corner.”
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