Buy to Let Mortgage Lending Market Seeing Higher Demand

Buy to Let Mortgage Lending Market Seeing Higher Demand as Landlords Add to Portfolios and New Landlords Enter the Rental Property Business

Buy to Let Mortgage Lending Market Seeing Higher Demand

The buy to let (BTL) mortgage market has been seeing a surge in the past year as more and more households find it hard to acquire property.  They then turn to rental property and demand has been high.  Landlords have found the market favourable for adding to their portfolios and new landlords are finding it a good time to enter the property investment sector.  The buy-to-let market is busy.

A recent report by Paragon Mortgages showed that twenty-one per cent of their mortgages is bought to let mortgages.  Of the buy to let mortgages forty-five per cent the mortgages were for experienced landlords choosing to expand their portfolios, thirty-four per cent were for buy to let remortgaging, and eighteen per cent were for first time buyer landlords.  This data shows clearly that the buy to let market is becoming a major sector in the mortgage lending market.

Lenders have been keen on the fact that the buy to let market is growing and have started bringing more products to market geared to the landlord.  Some products are focused on the new buy to let landlord while others are geared to support lending for those adding to their portfolio.  It is important that these products continue to come to market as the demand for rental property is high and without private rental properties on the market, there are fewer choices for households.

John Heron, Director of Paragon Mortgages, said: “Buy-to-let is an important source of business for the broker community and, given the growth in tenant demand and expected expansion of the private rented sector, it can play an even greater role.

“It is forecast that nearly one in five households will live in privately rented accommodation by 2015, an increase from the current one in seven, and the sector will obviously require BTL finance to facilitate that growth.”

There are many looking for rental homes due to the inability of finding lending, however, for some, the choice of a rental property is the first choice.  The underconfidence in today’s economy has led many to wait before taking on more debt.  The loss of a purchased home is much more of an emotional fear than having to downgrade a rental or break a lease.  This has led many to withhold buying and choose to rent instead.

There are those that are being forced to rent for housing but there are just as many that are choosing the rental property as a life choice in an economy filled with rising inflation, government public spending cuts, and rising unemployment.  The demand on buy to let is expected to remain high for many years.  The buy to let mortgage lending market will do well to bring products to market geared toward the success of the landlord for it benefits the buy to let market, the housing market and those seeking rental properties.

Leave a Comment