We’re almost through the second month of 2012, and what is abundantly clear is that lenders are really keen to develop their buy to let mortgage business this year. This isn’t of course too surprising as there were a number of signs at the end of 2011 that this would be the case.
Data from the Council of Mortgage Lenders (CML) confirmed there were 84,000 more properties bought with a buy to let mortgage in 2011 than in 2010, and buy to let mortgages now account for 13% by value of all mortgages in the UK.
Demand for rental property has undoubtedly been fuelled by the number of would be first time buyers forced to rent rather than buy as they just can’t secure a mortgage to make their first move onto the housing ladder. However, it’s not just people at the bottom end of the market renting as there are many more mature households that also need the flexibility and mobility that private renting provides.
There has been a marked increase in lender activity in the buy to let sector. Abbey for Intermediaries launched their buy to let offering in mid December and Accord mortgages widened distribution of its range a month later in January. Woolwich have made further strides in buy to let with the relaunch of their 75% Loan to Value (LTV) range, and specialist buy to let lender Paragon launched a wide ranging portfolio in January accompanied by an improvement in the rental income required to cover their mortgages. Encouragingly there is also a greater number of buy to let mortgages available up to 80% LTV.
This is all good news for landlords – whilst property prices remain low, and demand for rental property high, it is an excellent time to purchase a buy to let property or expand an existing portfolio. L&C has useful buy to let calculators to help potential and existing landlords assess how much they can borrow on a buy to let mortgage and how much rent they need to charge.