Buy to let goes from strength to strength
Yet more data has been released from the Council of Mortgage Lenders which underlines the strength of the private rented sector and the belief which landlords have in it. The number of loans advanced rose by 10% in March compared to February, representing a huge 56% increase on March 2013. This corresponds well with data from the Intermediary Mortgage Lenders Association (IMLA), who are predicting that over half of UK homes will be rented by 2032, given current trends and assuming no major shift in policy to address the housing shortage.
The growing demand for rental properties and the availability of buy-to-let mortgages with easier eligibility criteria and low rates has proven key to the success of this vital part of the UK economy. And with a lack of new housing stock entering the market and many investors seeing property as a better bet than the traditional investment alternatives, the buy-to-let sector looks set to be in good health for some time to come.
New Mortgage Options
A recent overview of buy to let mortgages suggests rates are staying steady in the wake of the Mortgage Market Review. There was some speculation that the new, stricter requirements for residential mortgages might also be brought into the buy to let market by cautious lenders. But this does not seem to be the case. Consequently, 45% of landlords are looking to remortgage in the next 3 to 6 months, according to broker Mortgages for Business. This is partly a reflection of the attractive deals on offer in the mortgage market, especially with confirmation from Mark Carney Governor of the Bank of England that interest rates are not set for an early increase.
Fixed-rate mortgages are the most popular, according to Paragon Mortgages, accounting for 77% of buy to let repayments. This makes sense given that rates will rise in the mid- to long-term.
NatWest has launched 12 (yes, 12!) new buy to let mortgages, cutting rates by up to 0.64% across a range of different loans to value (LTVs) and fixed rate terms for two, three and five years. The full details can be seen here.
Finally, Mortgage Solutions have a good overview of some of the other current deals available out there. Please always consult an expert, independent broker to find the right buy to let mortgage for your finances and circumstances.
Tip of the Week
The Tenancy Deposit Scheme has revealed that the number one cause of landlord-tenant disputes since 2007 has been cleaning, which accounts for 56% of deposit disputes brought to the company.
Of course, there will always be room for interpretation over cleaning but do as much as possible to ensure landlord and tenant cleaning responsibilities are clear in the tenancy agreement or tenant instructions.‘Cleaning Up’ by Marcin Wicary is licensed under CC BY 2.0