Helping landlords fill the housing gap

26 July 2010

The Association of Residential Lettings Agents says there is a widening gap between the amount of private rented property available and the number of tenants looking for a place to rent.

This is supported by a number of indices showing that rental yields have been firming up for a few months. The underlying causes are a lack of buy-to-let mortgages and the fact that many individuals cannot get a mortgage and are being forced to rent.

Buy-to-let lending has dropped from a peak of £44bn a year to just £8bn this year - the last time we saw gross lending this low was in the 1990s.

So the UK has a growing army of people who have no choice but to rent, and a dearth of lenders with funding allocated to buy-to-let.

This is great news for landlords as they can see rental yields rising which will compensate for slower capital growth. But it’s going to be hard to
This, in turn, is good news for brokers. It’s unlikely that buy-to-let mortgages will take off in lenders’ branches so if a landlord wants a loan they must go to a broker.

I imagine many landlords think they can’t get new finance at the moment so it’s up to brokers to identify suitable customers and show them that it is available.

There aren’t many buy-to-let products around but that does not mean that no lender wants to offer them. There’s a strong appetite for buy-to-let loans and the liquidity to fund them. But it’s first come, first served.

 

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