The tide is turning for the buy-to-let market

Andy Young, chief executive at TBMC, the buy-to-let and commercial mortgage specialist comments on the latest developments in the buy-to-let mortgage market

Related topics:  Specialist Lending
Millie Dyson
10th February 2011
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He says:

"Since the credit crisis impacted the buy-to-let market in 2007, many landlords have experienced difficulty obtaining mortgage finance in order to purchase residential rental properties. However, the buy-to-let mortgage market has now stabilised and is starting to show positive signs of recovery.

"During the last 12 months we have seen new lenders entering and existing lenders returning to the buy-to-let mortgage market, including Paragon Mortgages, the specialist buy-to-let lender. It is highly likely that more lenders will enter in 2011, bringing increased competition to the market and resulting in more attractive deals for landlords.’

"Lending criteria is also starting to ease somewhat and there is now a choice of products available for limited companies, light refurbishments and houses in multiple occupation. Loan-to-values have also increased and just this week we have seen the return of the 85% loan-to-value buy-to-let mortgage.

"Landlords have been faced with providing much larger deposits during the last couple of years so this is great news for residential property investors in the UK.

"Although the tide is certainly turning for the buy-to-let mortgage market, lending levels are still relatively low and it is likely to be a while before the market returns to normal.

"Lenders have displayed a conservative attitude toward risk over the last couple of years, despite the high performance of buy-to-let mortgages compared with the wider mortgage market, but there is evidence that confidence in providing buy-to-let finance is returning.

"I expect to see continued growth in the buy-to-let mortgage market over the next 12 months with lenders showing a bigger appetite to lend and greater product innovation."
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