Would-be landlords edged out of the market

Permalink: Would-be landlords edged out of the market
by Gill Montia

Financial website, Moneyfacts.co.uk, has taken a further look at recent figures from the Council of Mortgage Lenders that show a rise in the number of approved buy-to-let loans during 2007.

While the lending figures support an optimistic outlook for the buy-to-let sector, it is now difficult for first-time landlords to enter the market.

Senior analyst at Moneyfacts.co.uk, Alan Harper, says: “Nearly half of all buy-to-let mortgage lenders won’t lend at all to first-time buyers, leaving 80% less products than in the residential market.”

In addition, the average buy-to-let loan-to-value (LTV) has decreased to 80.1%, compared with 82.8% this time last year.

This rise means that the average contribution from a would-be landlord has increased from of £32,542 in February 2007, to £38,063.

Moneyfacts also found that while 13 buy-to-let lenders were offering 90% LTV in May 2007, only five lenders will currently lend on such terms.

Since last September, 90% LTV products have been withdrawn by edeus, Bank of Ireland Mortgages, The Mortgage Works, Wave, Kensington Mortgages, Platform, Scarborough Specialist Mortgages and CHL Mortgages.

Bradford and Bingley is still marketing seven 90% LTV products, while Bristol and West Mortgages, The Mortgage Business and First Trust Bank (NI) all offer two. Mortgage Express stands out with 14.

Meanwhile, the percentage of the market offering 75% LTV or less has grown strongly in the past 12 months, indicating a safer approach to lending.