Landlords were able to significantly expand their portfolios in the third quarter of 2013, largely thanks to the wider availability and improved choice of buy-to-let mortgage products on the market.
According to the latest Mortgages for Business Complex Buy To Let Index, landlords made use of more purchase finance than in previous quarters, with Q3 showing an increase in new purchases in every sector of the BTL mortgage market (except semi-commercial investments) which would indicate a rapid acceleration of BTL residential property investment.
This has been no doubt helped by the number of BTL mortgage products increasing for the second quarter in a row – Q3 saw 484 products on the market, up 19 on Q2 and indicating a 4% increase, despite the number of lenders staying the same.
Yields are consistently high and in fact rose in the third quarter for all property types (again excluding semi-commercial properties), being good news for landlords who can still generate a decent return despite rising house prices.
David Whittaker, MD of Mortgages for Business, commented:
"It's encouraging to see a sustained improvement in the choice of different mortgage products for landlords – and that competition should help drive cheaper deals too. Rates remain low, and yields are consistently high, which is encouraging landlords to increase activity.
"Confidence is generally high … which is sparking even more growth in the sector [and] we're expecting this surge of interest to continue. Fundamentally, demand from tenants is as healthy as ever, and will remain so for the foreseeable future."
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