Buy-to-let market 'blooming'
Posted by Lucy Wooldridge
The buy-to-let market is currently "in bloom" with more mortgage products now available than at any time since the recession, new data from Moneyfacts.co.uk has revealed.
There are now 486 different mortgage products available for investors in UK buy-to-let properties, exactly double the number on the market just two years ago and a hundred more than at the same time last year.
"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," said Louise Holmes, spokesperson for Moneyfacts.co.uk.
"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 property has made buy-to-let an increasingly attractive investment opportunity, which in turn has attracted more lenders back to the market.
A wider range of products has also resulted in increased competitiveness, meaning those investing in buy-to-let in London and elsewhere in the UK can now benefit from lower rates than in recent years.
The average interest rate for a buy-to-let mortgage is now 4.79 per cent, Moneyfacts.co.uk found, down from five per cent 12 months ago and 5.31 per cent the year before that.
"These latest figures, particularly a reduction in the average rate, should make pleasing and encouraging reading for landlords and property investors," Ms Holmes added.
It follows recent data released by Mortgage Flow, a mortgage sourcing tool from Mortgages for Business, which revealed that there are now six UK lenders offering buy-to-let mortgages at a loan-to-value (LTV) of 80 per cent or higher, representing a vast improvement in comparison to the years following the 2008 recession.
Between December 2008 and May 2010 not a single lender offered an LTV of above 75 per cent.
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