The Council of Mortgage Lenders says the 17% boom in buy-to-let in the first half of 2006 is a sign of a buoyant rental market.The trade body last week rel- eased figures for the first half of this year showing lenders advancing 152,500 buy-to-let loans worth 17.5bn – an increase of 17% by volume and 20% by value compared with the second half of 2005. Michael Coogan, director-general of the CML, says: “Investors have shown that they are quick to adjust to changing market conditions so the view that interest rates are now firmly on an upward trend is likely to slow down the growth in buy-to-let investment in the coming months. “But the rental market remains fundamentally sound and is likely to continue to offer good long-term prospects for astute investors.” However, Milan Khatri, chief economist at the Royal Institution of Chartered Surveyors, says that house prices rising and renting becoming more expensive is bad news for first-time-buyers. And Ray Boulger, senior technical manager at John Charcol, says the plight of first-time buyers will benefit buy-to-let investors, and there is no sign that this will change in the short term. He adds: “This month’s base rate rise and fears of another later this year are likely to deter some potential first-time buyers from taking the plunge into the property market at the moment.” The CML also says that typical underwriting criteria in the buy-to- let market remains unchanged, with an average maximum LTV ratio of 85% and lenders requiring rental income to exceed mortgage repayments by at least 25%. But Boulger disagrees and says underwriting criteria have changed, with many lenders realising that lending to investors is not as risky as was once perceived. The CML’s figures show that the proportion of buy-to-let mortgages three months in arrears has risen from 0.68% to 0.73%.
- Top trends
The Financial Services Authority will be consulting on the impact on depolarisation and its disclosure documents in October.The move is part of the FSA’s consulation on the Markets in Financial Instruments.Within this, the regulator is proposing to maintain the Menu and the Initial Disclosure Document while it continues to undertake the post-implementation review of the […]
Tory Leader David Cameron plans to revolutionise the Right to Buy market by allowing every council tenant the right to have their rent payments converted into mortgage repayments. Should the Conservatives be elected and implement this proposal it would give a considerable boost to the already buoyant Right to Buy market.Cameron says: “Right to Buy […]
Alliance & Leicester Mortgages has launched a fast-track guarantee service for its prime residential mortgage range. The system allows brokers to speed up the mortgage process, bypassing the need for additional paper income verification. It is available to prime residential second-time buyers and also to remortgage customers. To qualify for the fast-track system, clients must […]
Northern Ireland Co-Ownership Housing is now making it easier for potential first-time buyers, vendors and estate agents to access information on co-ownership through the launch of a range of new online information services. Alan Crowe, chief executive at the Co-Ownership Housing Association, believes the new website will be a valuable resource for all those in […]
As part of its commitment to help even more companies improve employee wellness and productivity, award-winning health cash plan and wellbeing provider Health Shield has announced a raft of new and improved health benefits. From early diagnostics, detection and screening services to rehabilitation and the extension of home care support to parents, Health Shield’s range […]
News and expert analysis straight to your inboxSign up