Buy to let mortgage market is stuck in a rutMake Text Bigger
Buy to let mortgage availability is seemingly not improving despite the best efforts of property professionals to talk up the market.
The latest insight comes from mortgage brokers – with half reporting no change in business with landlords during the three months ending May 31, while the other half said business was up.
On average, mortgage brokers and financial advisers considered their buy to let mortgage business was up 5.4% in the period, which represents a modest increase despite an influx of new buy to let mortgage products and three new lenders in the market.
The data is from a sentiment survey by specialist buy to let lender Paragon Mortgages – a sentiment survey is based on opinion rather than statistical information.
Paragon claims buy to let financing improved in the second quarter of 2011, which was backed by almost two thirds of intermediaries (64%), although 8% felt the market had worsened.
Tellingly, out of every 10 mortgages arranged by a broker, only two were for buy to let while seven were for residential customers.
Paragon also found that 47% of broker buy-to-let mortgages were for landlords looking to extend their current portfolios – up from 43% in the first quarter.
Mortgages for first-time landlords added up to 21% of the total, up from 18% in the first quarter.
Remortgages fell during the second quarter to 28% compared with 35% of the total in the first quarter.
John Heron, Paragon Mortgages managing director, said: “Government statistics just released indicate that more than 17% of English property is now in the private rented sector. All of the market indicators, however, suggest that there is still not enough property for new tenants.
“Better availability of buy-to-let finance, particularly for professional landlords, is critical to the expansion of the supply of rental property. It’s therefore, good to see that this is starting to come through.”
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