Popularity of buy-to-let mortgages increasing
An increasing number of investors could soon be seeking property management services as the popularity of buy-to-let continues to rise.
According to figures from the National Landlords Association (NLA), demand for buy-to-let mortgages is increasing as investors look to take advantage of rising rental yields.
This is causing lenders to expand their buy-to-let mortgage offerings and approve a higher number of loans and at greater values.
A survey by the NLA's mortgage broker division found that the number of buy-to-let schemes provided during the second quarter of 2011 grew by 25 per cent when compared to the first three months of the year.
Meanwhile, average loan sizes increased by £2,166 to £138,525.80, representing a growth of 6.4 per cent since January.
The NLA said this growth was largely down to the greater number of lenders offering higher loan-to-value (LTV) mortgages and the availability of finance for Houses of Multiple Occupation.
The figures revealed that over 50 per cent of buy-to-let offers processed by NLA Mortgages were for loans over 70 per cent LTV - resulting in an average LTV of 67 per cent for the quarter.
"These findings by NLA Mortgages are very positive. Landlords provide a valuable source of housing at a time when tenants are finding it increasingly difficult to find properties to rent," said NLA chairman David Salusbury.
"Any mortgage products that encourage greater investment in the private-rented sector should be encouraged," he added.
With interest rates still at record lows and predicted to stay that way for some time, variable rate mortgages were the most popular among landlords, comprising 59 per cent of all applications to lenders.
Meanwhile, this week saw both Leeds and Yorkshire building societies revamp their buy-to-let mortgage ranges to offer better rates for borrowers.
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