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Buy to let continues to progress nicely in 2012

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image The buy-to-let market is booming again as lenders offer more and better mortgage deals, research showed today.

As young home-hunters continue to struggle to get on the property ladder, property owners with an eye on the rental market have a vastly greater choice of mortgage deals at signifcantly lower rates than last year, according to Moneyfacts.

 

The financial information website said there are 100 more deals on offer now than a year ago - 486 buy-to-let mortgages compared to 386 last February.

The heightened competition among lenders to attract landlords has also seen the average buy-to-let rate drop from 5 per cent this time last year to 4.79 per cent.

Lenders, who might previously have seen this area as more high risk, have been expanding their ranges to reflect the increased interest in the market.

Meanwhile, the housing market generally has remained flat, with Nationwide reporting today that prices dipped by 0.2 per cent in January and highlighting the lack of buyer demand as people struggle to raise a deposit.

 

Would-be buyers could face an even tougher time trying to raise a mortgage in the coming months as lenders are expected to tighten their borrowing criteria amid weak economic conditions.

 

Louise Holmes, spokeswoman for Moneyfacts, said the buy-to-let area is 'blooming' with a widened choice for landlords.

 

She said: 'During the peak of the credit crisis the number of buy-to-let deals shrank considerably as lenders saw it as a high risk area of the market.

'Many aspiring homeowners have had their property dreams dashed due to strict lending criteria and large deposits, meaning the only option left is to rent.

'This increase in demand for rental properties has resulted in a degree of competition returning to the buy-to-let sector, giving it a well-needed boost.

'These latest figures, particularly a reduction in the average rate, should make pleasing and encouraging reading for landlords and property investors.'

Last month, Yorkshire Building Society announced plans to expand buy-to-let lending across England and Wales.

 

The lender entered the buy-to-let market in August, offering products through Accord Mortgages, its intermediary lending subsidiary, initially in London and the South East.

 

The Co-operative Bank's broker lender has also promised to up its mortgage lending in the buy-to-let sector by a third.

Platform, the dedicated intermediary lender of the Co-operative Bank, said it would lend at least £600million in buy-to-let loans in 2012, as uncertainty in the wider housing market was fuelling rental demand.

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