It has been an interesting few years for the Buy To Let market. In the aftermath of the Credit Crunch we saw lenders pull away from this sector with breathtaking speed, leaving only two large lenders, BM Solutions and The Mortgage Works, plus a smattering of smaller lenders to pick and choose where they would lend.
Rates rose and fees seemed to spiral higher as the lending market jerked backwards in response to the number of issues that were being uncovered in this sector.
For the most part however, lenders that had sensibly supported the buy to let market found that arrears were broadly similar to the residential market and therefore lenders saw the higher prices and fees being charged for little extra risk as being very profitable.
As the market has started to return we have seen more lenders re-entering the Buy To Let sector, or even enter into it for the first time, with a view that this area of the market will become more and more significant once more.
As rental yields have continued to remain strong and demand for rented accommodation increased due to issues with first time buyers getting on to the housing ladder themselves, it seems the stage is finally set for a rebirth of this market.
On the back of the Funding for Lending Scheme, which has sent mortgage rates tumbling in the residential sector, the Buy To Let market now looks to be the latest beneficiary. This is good news for both those looking to keep their existing property and buy somewhere else, the “Let To Buy” sector, as well as professional landlords looking to increase their portfolios.
You can now obtain a Buy To Let product fixed at just 3.18% for 2 years, (5.3% APR), with fees that have also come down recently, at £1,995. This is a marked difference from just a couple of years ago and shows the growing importance that lenders are putting on the Buy To Let Sector this year.
There are now a plethora of lenders offering competitive Buy to Let options and we are already seeing landlord enquiries increase as they feel the time is right to extend their portfolios further.
It is not just product rates and fees that are changing either; lenders are also beginning to tweak their criteria, with on the one hand, for example, increasing Loan-To-Value bandings whilst on the other producing different underlying income requirements.
In this market, the use of an independent and suitably qualified expert who understands this area of the market is imperative, especially if you are looking at building a portfolio or remortgaging your existing properties. Choosing the right lending partners early on can really make all the difference.
So whether the goal is to move without selling a property, supplement income in retirement or to build a large property empire, it seems that the time is once again right for Buy To Let.