Commercial
finance Self
Build Mortgage Buy
to Let Property
Portfolio
Is
the Buy-to-let Boom Over?
The
restrictions on mortgage lending to would-be letting
landlords are already impacting on the UK’s buy-to-let
market. A survey recently released by the Royal Institution
of Chartered Surveyors (RICS)
shows that the number of new instructions from landlords
fell towards the end of last year for the first time
since 1998.
“Access
to the buy-to-let market become harder for would-be
landlords as mortgage products become scarce,”
says the report by RICS. “One per cent more chartered
surveyors reported a fall than a rise in landlord instructions.
The credit crunch has restricted the number of buy-to-let
mortgages approved, as well as the number of mortgages
available to investors.”
However, the report counteracted claims from the Council
of Mortgage Lenders that in fact the number of buy-to-let
loans went up by a quarter last year, taking the
number of such mortgages existing up to 1,038,000.
The CML
said that lending had in fact picked up in the second
half of the year.
“Our
figures are based on just the last quarter of the year,
by which time we believe mortgage lenders had started
to tighten their lending criteria,” said a RICS
spokesman in response to the report last month. However,
the RICS report made it clear that the letting market
in the UK is still buoyant.
“While
banks remain cautious about offering loans, demand for
rental property will continue to increase, with many
would-be buyers unable to make the jump to home ownership,”
it said. “Established investors continue to reap
the benefits of the current uncertainty in the housing
market and have been enjoying the fruits of rising rents.”
Other signs indicate that the buy-to-let boom is not
over quite yet. Paragon recently reported that rents
were rising at their fastest rate on record –
8 per cent in the last quarter alone – and buy-to-let
specialist Bradford
and Bingley explained this as a result of demand
from students and immigrants. They also said that first-time
buyers who are holding off because they fear a crash
or because they are no longer eligible for a competitive
mortgage deal are boosting the buy-to-let market.
With prices falling, the UK may soon be a more favourable
market for buyers. Although short-term investors may
be deterred by rumours of a property market crash, landlords
who are in it for the long-haul are likely to benefit
when prices have fallen sufficiently. If you’re
planning on getting into the market, then take a look
at buy
to let mortgages from Alliance and Leicester –
they also have a useful mortgage
calculator so you can easily work out what to afford.
Some
Buy to let mortgage are not regulated by the Financial
Services Authority. For
information regarding a landlord's mortgage on a buy
to let property, a mortgage broker may help you now,
so please contact us
or call 0800 781 0414 for friendly assistance.
