Buy-to-let lending set to increase
Posted by Jayne Codling
UK property investment could become increasingly affordable for landlords thanks to a rise in lending by mortgage companies.
With property management agents and landlords seeing increasing demand for rented property from tenants, which in turn is leading to greater rental yields, buy-to-let is becoming an evermore popular investment.
As such, there has been a number of mortgage lenders entering the buy-to-let market or increasing the number of products they offer, meaning landlords can benefit from more options and better rates.
And according to Gavin Elley, relationship manager at Mortgages for Business, this trend is set to continue.
Speaking at the Landlord & Letting Show in Birmingham last week, he explained that buy-to-let actually represents less risk to lenders than the owner-occupier sector.
"You have got the covenant of the borrower and you have also got the covenant of the tenant in there as well, so in terms of risk it is actually better for them," said Mr Elley.
"More lenders are now starting to move in to the buy-to-let market and that trend is going to continue. Lenders are looking to lend in this area."
He went on to explain that a number of factors have led to greater demand for rented accommodation, and that a continuation of rising tenant demand is likely to be another factor tempting mortgage lenders to the buy-to-let market.
"There is competition for rental property. First-time buyers who traditionally would have bought a property, are now looking to rent. That has skewed lenders' thinking in terms of buy-to-let. Going forward, we will see more lenders entering the market. That is a very positive thing for a landlord," said Mr Elley.
It follows the recent announcement by mortgage firm Platform that it is extending its Options and Cashback buy-to-let ranges with the launch of two new tracker products for brokers.
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