"While low interest rates are driving the growth in the first time buyer market, buy-to-let landlords are facing numerous financial challenges in 2017"
Buy-to-let mortgages are also holding up with the number of loans and the amount borrowed up 11% by value and up 12% by volume, month by month. However, much of this lending has been driven by buy-to-let remortgaging.
However, further CML figures show that the number of loans advanced for house purchases in January was at its lowest monthly level since February 2015 and at a near two year low. Home buyers borrowed £8.4 billion in the first month of the year, down 28% on December and unchanged on January 2016.
While low interest rates are driving the growth in the first time buyer market, buy-to-let landlords are facing numerous financial challenges in 2017, including increased taxation and stricter mortgage lending criteria. Although, there is always a seasonal market slow down during the winter months, the economic uncertainty around Brexit and rising house prices is slowing the mortgage market.
So what can be done to boost the housing market? Lenders need to keep supporting potential buyers with products that are both accessible and affordable, especially for the self-employed, landlords, first time buyers and the retired, as this will help to drive growth. We have seen lenders bringing out new products and loosening their criteria to try to maintain market share and this is to be applauded.
For example, Bank of Ireland UK has announced that it has introduced a new offering for contractors to further support self-employed borrowers. The Bank will now consider applications from professional self-employed contractors, who have been trading for at least 12 months and will use the current contract for the purpose of verifying income.
We have also seen lenders such as the Tipton, offer 100% mortgages to First time buyers. As you would expect, this comes with a few T&Cs such as taking a charge on the parents’ property. It is refreshing to see lenders looking to be creative with a sensible approach.
