26.11.09 by Andrew Montlake
Landlords To The Rescue?
Amongst the whispers and tentative movements of lenders we monitor daily, there have been some interesting signs in recent weeks of an increase in activity in the much-maligned buy-to-let market with products available with rates as low as 3.49% up to 60% loan-to-value, (5.00% APR) and 4.70% to 75% loan-to-value, (4.40% APR), and lenders such as Paragon poised to re-enter the market once again.
What is even more intriguing, and downright worrying for some, is the seemingly growing view from the political corridors of power that in order to control the economy effectively going forward, the housing market must be tamed. This means not only keeping prices in check, but also a change in the view that buying your own property early is the thing to do. If more people rented initially, and then bought property much later in life, the market may not be so dynamic.
Whilst this may sound slightly outlandish, watch out for some subtle changes in the way our politicians’ view home ownership and renting. Could it be that they see a new breed of savvy landlords as the answer to smoothing out the economic ills?
Whether you agree this is the way forward or not, personally I do not, the good news for landlords is that not only is demand for rental properties increasing, but lenders are beginning to come out of the shadows and offer a few interesting new deals, although do not expect these at high loan-to-values.
Coventry today launched some enticing deals up to 65% Loan-To-Value including a flexible product at 4.69% with a free remortgage service. Products like this are looking particularly attractive at present, whilst there are also other lenders whose products are useful for those looking to let their existing property out and purchase a new main residence.
For those landlords looking to purchase an investment property in need of a little work, The Mortgage Works have come back into the light refurbishment space with a tidy suite of products up to 70% Loan-To-Value, with rates starting at 4.04%, (5.00% APR). Whilst the Arrangement fees on the lower rates can be 3.5% of the loan amount, for the right property this can easily make financial sense. Light refurbishment is classified as a Buy to Let rental property which will benefit from minor improvements such as a new kitchen or bathroom.
There is also a similar product that enables those professional landlords who may be purchasing slightly under value to borrow 85% of purchase price as long as this is no more than 70% of the market value.
With the amount of products available for Buy-to-Let properties increasing, although loan-to-values are likely to stay at the 75% level, it does look as if next year this sector could make an unexpected early recovery, especially on the purchase side.
Monty’s Mortgage Blog
29.07.10
House Prices & Lending To Individuals
The frustration felt by many individuals that banks still do not seem to be lending in sufficient quantities is still evident in the latest Lending To Individuals figures from the Bank of England, which explains the frustration felt by many would-be borrowers.
Coreco
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