Cover Story
Mehrdad Yousefi, head of debt advisory at largemortgageloans
Lending criteria and characteristics remain unchanged, with the average maximum loan-to-value ratio at 75% and an average minimum rental cover requirement of 125%. The arrears rate on buy-to-let lending edged up in line with the mainstream mortgage market. At the end of March, 1.62% of buy-to-let loans with no receiver of rent in place were in arrears of three months. The proportion of buy-to-let properties taken into possession remained higher than in the mainstream market, as has been the case for a while, primarily reflecting the additional efforts in the owner-occupied sector to keep borrowers in their homes (as opposed to landlords whose properties may be empty, for example). Overall, demand for rental property remains strong and one would expect to s ee an increase in buy-to-let lending in the period ahead, as more funding becomes available.
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Lea Karasavvas, director at Prolific Mortgage Finance
The buy-to-let market has suffered in the last few years, with a diluted product range, larger arrangement fees and larger deposits common place. However the last few months have seen a return of competition for the less complicated private landlord with Aldermore, NatWest, Clydesdale, Godiva, Skipton and Northern Rock all showing signs that they are ready to take on business again. The more complex investor with three or more properties is still the one worse hit by the product reduction. Competition at this level is minimal and we are in desperate need of a big lender to take the bull by the horns and embrace this type of lending again. Whilst there are still clients willing to invest in the market, many have their hands tied due to the restrictions placed by the number of properties they can hold. We expect a few more lenders to return to the fold later in the year but anticipate a gentle introduction once again with high deposits
and average rates. That said there is definitely a marked improvement in the number of products available and hopefully it will continue. Funding remains an issue for these lenders as it has done for a while but at Mortgage Force, we are definitely seeing a little more appetite from our clients to return to a market that has been lying almost dormant of late. What seems to be more of an issue is the levels of stock available to investors. Finding the right properties with good yields of 6% plus is almost more of a challenge than funding them.
Mike Fitzgerald, sales director at Brentchase Financial
From a slow start some 15 years ago the buy-to-let market has grown steadily and indeed shows no sign of abating. More lenders are now offering buy-to- let mortgages and there is now a great choice of schemes for clients and brokers to consider. From being a niche product buy-to-let mortgages have grown in popularity as more first-time landlords came on the
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