According to Paragon's Financial Adviser Confidence Tracker report, a panel-based survey of mortgage brokers, 43% of brokers stated that the availability of mortgage finance improved in the three months to the end of September. The period coincided with Paragon Mortgages' return to the buy-to-let market, an improvement in the number of products available and an easing of criteria.
Paragon's research showed that 38% of brokers said buy-to-let mortgage finance availability remained unchanged during the third quarter, whilst 19% said that it had worsened.
Looking forward, a significantly higher proportion of intermediaries believe buy-to-let mortgage availability will improve further during the next quarter (35%) than deteriorate (7%). However, the majority (58%) believe it will remain at current levels.
Moneyfacts recently reported that there are approximately 300 buy-to-let mortgage products available, with the number of lenders rising to 54 from 45 a year previously. In terms of loan-to-values (LTV), there are currently 99 products with a LTV of 75% compared to 65 last year.1
John Heron, Paragon Mortgages' managing director, says:
"The number of buy-to-let mortgages has been rising in recent months as lenders come back to the market or new lenders are launched, and criteria has also improved slightly. This is reflected in intermediaries' view of availability of buy-to-let finance, with more than double the number of brokers saying that it has improved rather than deteriorated.
"However, the market is still significantly below its July 2007 peak and access to finance remains difficult for professional landlords in particular. This is why Paragon's return to the sector is significant for this market as our service is designed to specifically cater for professional landlords."
Simon Tyler, owner of Surrey-based mortgage adviser Tyler Mortgage Management, says:
"On the one hand a number of new lenders have started to be active in the buy-to-let arena, which is encouraging, as of course is the return to lending of Paragon. There is still however a long way to go before we reach a more normal market. Landlords will need better pricing and more generous criteria in order to build their portfolios to match demand and this will still take some time to deliver."
