Tag Archives: Buy to let mortgages

Buy to let borrowing eases as lenders revamp deals Latest Articles

Buy to let mortgage restrictions are relaxing as more lenders announce a return to the market.

Aldermore Bank is stretching its comfort zone to take on a little more risk by allowing landlords to have loans on three rather than two properties, subject to a total loan value of £1 million and rent cover of 125%. Continue reading Buy to let borrowing eases as lenders revamp deals

Revealed – how property was crippled by the recession Latest Articles

New figures from the government show how the banking crisis and recession crippled the housing market.

In 2008/09 – the latest figures available from the Office of National Statistics (ONS) – only 9% of all households in England (2.0 million) had moved to their current homes within the previous 12 months, the lowest number since records began in 1994/95.

Between 2007 and 2008 the number of property sales over £40,000 in the UK fell by 44% from 1.6 million to 900,000 due to the recession.

The picture was similar across England and Wales with property transactions falling by between 42% and 48%. Transactions in Scotland fell by less (33%), while in Northern Ireland they fell by more (61%).

In 2009, the average price paid for a home was £194,235, down 8.1% on 2008.

Changes in the average price paid for homes varied little between England and Wales, at 8.4% and 8.2% respectively. Scotland saw a smaller decrease (2.6%), while Northern Ireland a much larger one (15.7%).

British Bankers’ Association figures show that in the last 12 years the number of loans approved for house purchase peaked in March 2002 at 92,912.

The number of loans approved in July 2007, the month before the credit freeze began was 62,363. Approvals fell rapidly to reach a low of 17,421 in November 2008.

The average value of mortgages for house purchase peaked in June 2007 in the UK at £159,600 before decreasing to a low of £116,100 in December 2008.

The number of repossessions reached its peak in 1991 when 75,500 properties were repossessed.

Repossessions then fell to reach a low in 2004 of 8,200. Since 2004 repossessions have increased nearly six-fold to 47,900 in 2009.

Jen Beaumont, from the ONS, said: “In the recent recession we have seen a large rise in repossessions, but not to the same extent as in the previous recession of the 1990’s. This could in part be due to lower interest rates and unemployment this time round.”

The Council of Mortgage Lenders confirms 36,300 repossessions were made in 2010 – 24% lower than in 2009.

Buy to let market expanded by 7% in 2010 Latest Articles

The truth is finally out about how the buy to let market performed in 2010 as the Council of Mortgage Lenders (CML) has released the latest loan figures for property investors.

The figures confirm the market expanded by 7%, with about 1.3 million buy to let mortgages worth £152 billion on the books of the UK’s major banks and building societies.

The buy to let sector accounts for around 12% of the UK’s total residential mortgages by number and value.

Lending in 2010 was £10.4 billion, up 22% from 2009, and the total number of  new loans  was 102,000, which was 10% higher than the previous year.

In the last three months of 2010,  28,600 new buy to let loans worth £3 billion were advanced.

Landlord mortgage arrears also fell back during the year.

The general CML view is that buy to let arrears have dropped in line with residential mortgage arrears, after running at a higher rate.

Lenders expect surging rental demand to continue

Low interest rates are a key driver of this narrowing of the gap, since most buy to let loans are interest only and gain a greater benefit from lower interest payments than capital-and-interest rates paid by other homeowners.

The CML expects strong rental demand to remain throughout 2011, mainly due to high deposits needed by first time buyers. Banks and building societies do not expect this to change in the foreseeable future.

CML director general Michael Coogan said: “Funding remains a key constraint on growth in buy-to-let lending, but demand seems to be resilient and loan performance has improved.

“Looking ahead, loan performance could potentially be adversely affected by rising rent arrears or interest rate rises, but at present there is no indication of these pressures materialising in practice.

“There is also a strong counterbalancing growth influence on the buy-to-let market, as tenant demand seems set to remain high in the face of continuing deposit constraints to entering the owner-occupier market.”

Buy to let mortgage deals hot up for landlords Latest Articles

New lenders are eyeing buy-to-let as others are shaping up their deals to give landlords a wider choice of rates and products.

Yorkshire Building Society has indicated a move in to the market before July on the back of the merger with Chelsea Building Society, which had a large property investment lending book. Continue reading Buy to let mortgage deals hot up for landlords

Mortgage lending slumps to lowest level for a decade Latest Articles

Graph signifying house price decreasesMortgage lending has slumped to the lowest level for a decade as banks and building societies tighten their grip on the housing market.

Mortgages and remortgage advances added up to £136 billion in 2010 – the lowest total since 2000 and almost a fifth (18%) lower than 2009. Continue reading Mortgage lending slumps to lowest level for a decade

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