Matthews IFA Ltd
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Surge in buy to let!

The number of products on the market to service the growing interest in buy to let mortgages in the UK has risen to highs not seen since 2008, new research reveals.

The research by Moneyfacts shows that the number of buy to let products on offer in July 2013 increased to 466, but now the number has risen by 42.7% to 665.

At the same time, average interest rates charged for both fixed and variable deals have fallen to the lowest levels ever at 4.17% for the average fixed rate and 4.03% for the average variable rate.

Lender interest in the buy to let market may be fuelled by the knowledge that it falls outside of the recent Mortgage Market Review (MMR) which makes getting a loan more rigorous, according to Sylvia Waycot, Moneyfacts editor. ‘This makes the process of granting any buy to let mortgage quicker and simpler as it is not subject to the new affordability criteria that is starting to clog up the mainstream mortgage market,’ she explained.

‘In addition, the new pension regime means that retirees could consider buy to let as a way of supplementing their income instead of purchasing an annuity,’ she added.

She also pointed out that Help to Buy is attracting potential borrowers into the housing market, but the advent of MMR is acting almost like a contradiction, putting the brakes on the process, and the funding element, although sensible, is making it harder for some to get onto the housing ladder.

‘Ultimately this all points to the buy to let market being here to stay and to remain attractive to lenders, hence the surge in products on offer for landlords who seem assured of a healthy supply of tenants,’ Waycot concluded.

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