Despite a tough year in the buy-to-let market, there are signs that there has been improvement in this property sector.
The number of products available to buy-to-let investors rose to 239 in October, increasing from the record low of 179 in September. Despite this increase, the figure is nowhere near the peak of August 2007, when they number of these loans on the market hit an astonishing 3,662.
Many economists are attributing the recent recovery in the UK housing market as the trigger for lenders to launch new products for borrowers. Paul Samter, economist at the Council of Mortgage Lenders, stated: “We have seen some positive signs from the buy-to-let market in recent months with a considerable improvement in arrears and an increase in products and lending activity.”
There are still doubts that this improvement can continue as activity is still decreased and landlords continue to face trouble in securing a competitive deal.
“Numerous buy-to-let lenders have pulled out of the sector, while many of the remaining lenders restricting the number of deals on offer, making it harder than ever for landlords to find a competitive mortgage,” said Michelle Slade of Moneyfacts.co.uk.
The buy-to-let sector hit its peak around five years ago when financing was more flexible and landlords interested in making extra income would mortgage a property to lease to other tenants. However, the economic fallout experienced in the UK over the past two years has seen this ‘bubble’ burst, with falling house prices reducing the equity in these properties, leaving landlords with a damaged market.
Source: Financial Times
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