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Buy-to-let market stages fight back

Buy-to-let market stages fight back

Category: Mortgages

Updated: 18/05/2010
First Published: 18/05/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The buy-to-let (BTL) sector is beginning to stage a fight back, research conducted by Moneyfacts.co.uk has revealed.

The credit crisis dealt a severe blow to the BTL market, which at its lowest point in September last year had seen its size diminish by 95% when compared with its peak in August 2007.

However, since that trough, the market has expanded by 70%, with product numbers rising from 179 to 304 last week. Perhaps more importantly, a number of these products are in high loan-to-value (LTV) tiers.

Figures also show that lenders are beginning to return to the market, while average rates have fallen. In September, products with a maximum LTV of 80% comprised just 1.40% of the entire market; this has increased to 4.24%.

In addition 75% and 70% LTV products now make up 29.07% and 25.82% of the sector, comfortably more than in September last year.

The average two year fixed buy-to-let mortgage rate has fallen in the same time, from 5.96% to 5.66%, as have two year trackers, from 4.59% to 4.49%.

"Competition has returned to the market, as lenders actively make cuts to their new borrowing rates," said Darren Cook, spokesperson for Moneyfacts.co.uk.

"Saffron and Melton Mowbray Building Societies have returned to the market during the past month, while new lender Bank of China continues to successfully find its niche.

"Both are signs that this market is starting to become a more viable and safer option for lenders."

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