New EICR to cover any changes made by outgoing tenant?10:00 AM, 4th May 2021
About 2 weeks ago 96
Buy to let pundits fill acres of space online and in the media talking up property investment – but most of them have a vested interest in pushing products on landlords.
The main offenders are mortgage lenders forever talking up the market in surveys and house price reports – and including sly details of their buy to let mortgage deals at the same time.
The standard ‘buy to let is booming’ story relies on a survey showing tenant demand is high and highlights the profits landlords can make from rising rents.
The chart is from Google Trends based on searches for the term ‘buy to let mortgages’ – and this suggests landlords have a different agenda than the industry pundits who live off their fees and commissions.
Looking at the search volumes, it’s easy to see that buy to let mortgage queries follow an annual trend, with regular peaks and troughs around the same time of the year.
The figures do not show the full story until mortgage searches are compared to the number of buy to let properties according to the government’s Office of National Statistics figures.
These figures show a steady growth in the number of homes to let until the market peaked in 2006-07.
Since the late 1990s, the number of buy to let properties in England has almost doubled from around 2.1 million to around 3.8 million, with most added by 2007.
Lately, the demand for buy to let property from tenants has not increased the number of properties or mortgages pro rata, which suggests the majority of buy to let mortgage activity over recent months is for refinancing rather than purchase, aborted deals or rejected loans.
That makes sense in the current market.
Few landlords are buying. Many would like to but cannot raise the finance, while savvy investors can remortgage their buy to lets, and in many cases claw back their investment while setting the mortgage interest off against rental profits.
At the same time, they can build a cash fund or pay down their own mortgage to save money.
The chart also shows that despite a booming buy to let market, the underlying search activity for loans by landlords is significantly below the level at the top of the market – and is hanging around at the lowest level since the credit crunch, discounting the annual low each Christmas.
Source: Google Trends
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