How many lenders are really open for buy to let business?Make Text Bigger
So few lenders are actually handing over cash to borrowers that the Council of Mortgage Lenders has had trouble finding enough firms to fill the slots in a top 30 lender’s table.
Despite this revelation, about 100 or so banks, building societies, and finance houses have thousands of mortgages advertised on line.
The Council of Mortgage Lenders (CML) director general Michael Coogan claims more lenders will shut up shop if the government’s controversial mortgage market review (MMR) is imposed on the industry.
The MMR’s proposed changes to the market include:
- Banning self-cert loans and requiring income verification for all mortgages
- Holding lenders responsible for making sure borrowers can afford loans
- Tightening arrears rules and banning firms from penalising borrowers who have an agreed repayment arrangement
- Protecting property investors by regulating buy to let lending in the same way as residential mortgages.
Mr Coogan also suggests buy to let will be one of the sectors hardest hit by MMR.
Despite the claims of the CML, 43% of mortgage brokers report an improvement in the availability of buy to let mortgages during the third quarter of 2010, according to the latest research by Paragon Mortgages.
But 38% of brokers said availability remained unchanged during the third quarter, whilst 19% said that it had worsened.
Looking forward, a significantly higher proportion of intermediaries believe buy to let mortgage availability will improve further during the next quarter (35%) than deteriorate (7%). However, the majority (58%) believe it will remain at current levels.
Moneyfacts recently reported that there are approximately 300 buy to let mortgage products available, with the number of lenders rising to 54 from 45 a year previously.
In terms of loan to values (LTV’s), there are currently 99 products with a LTV of 75% compared to 65 last year.
BM Solutions has two special buy to let mortgage deals at 75% loan to value available until Friday November 5 at 8pm. The deals include a two-year tracker at 3.75% and a two-year fixed at 4.25%.
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