NLA calls for buy-to-let 'sustainability'
Mortgages for buy-to-let properties must be sustainable and should take the long term into consideration, the National Landlords Association (NLA) has said.
The organisation noted that there has been an increase in buy-to-let mortgage products coming on to the market in recent weeks.
It questioned whether this would result in landlords being encouraged to grow their portfolios and let further properties out to tenants.
Richard Price, director of operations at the NLA, said that the organisation "believes that the private rental sector will continue to play a crucial role in the coming years".
"Competition for quality rented accommodation is currently very high; it is likely that before the end of this decade one in five households will rent privately," he added.
"As a result, there is great demand for landlords to provide the UK population with quality housing."
The comments come after several finance providers launched new mortgage products aimed at people looking to invest in buy-to-let properties.
Just this week, Leeds Building Society reduced its fixed rates on buy-to-let mortgages and earlier this month Coventry Building Society expanded its buy-to-let range.
Meanwhile, the Co-operative Bank cut its buy-to-let mortgage rates by 20 bps.
"At the market's height, we witnessed the growth of mortgage offers, which for some investors with underachieving portfolios proved to be unsustainable. But early signs are that the market has learned from the past," Mr Price explained.
He concluded: "Any buy-to-let products that enter into the market to support this need must be sustainable with consideration for the longer term."
Recent figures from the NLA show that 49 per cent of landlords experienced an increase in tenant demand in the first three months of 2011 and a similar proportion expect this trend to continue.
The study also found that almost three-quarters (71 per cent) of landlords believed more buy-to-let mortgage products and greater competition between lenders would be beneficial for the market.
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