15:21 PM, 24th May 2012, About 10 years ago
Buy to let mortgage borrowing is expected to increase even more as lenders switch funds away from movers and first time buyers to landlords.
Several key lenders have already pledged more funds for buy to let – including the Co-op Bank and The Mortgage Works, the property investment subsidiary of the Nationwide Building Society.
A survey by the Nationwide also revealed three out of four brokers expect demand for buy to let borrowing to rise.
Ian Andrew, managing director of group intermediary sales at The Mortgage Works, said: “While the volume of buy to let lending is nowhere near the volumes seen before the credit crisis began in 2007, last year’s buy to let lending reached more than £14 billion. This is an increase of 40% from the previous year and we expect it to rise again in 2012.”
Meanwhile, lenders are flooding the market with new deals with low headline rates to lure borrowers to switch to them.
Skipton Building Society has three new mortgages following strong demand from property investors, including a two-year fixed rate package at 60% loan to value (LTV) at 3.89%, with a £245 application fee and £2,250 completion fee.
Other options are available at higher LTVs, including a 4.19% Bank of England base rate tracker (Base rate plus 3.69%) and 75% LTV tracker at base rate plus 4.09%.
Platform, the Co-operative Bank’s buy to let arm, has cut landlord mortgage rates.
The lender is offering a dozen deals after trimming back rates – they include tracker and fixed-rate mortgages from 3.29% at 60% LTV.
The Coventry Building Society subsidiary Godiva has issued a buy to let capped tracker mortgage over two years at 3.80% (Base rate plus 3.3%), capped at 5.3% until 2014 up to 65% LTV too.
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