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Economic Tracker

B2L deserves more help from lenders

Anyone looking to make money in the current market must be looking at buy-to-let. The facts speak for themselves with research from Countrywide’s estate agency network suggesting that 18% of purchases are buy-to-let.

After suffering at the hands of house price increases between 2004 and 2007, rental yields are now riding high on the crest of a new wave of confidence.

So if around one in five house sales are buy-to-let, it worries me that I can count the number of lenders supporting this buoyant market on just one hand.

Sample research from our 200-strong lettings branch network has revealed that fresh enquiries for rental properties increased by 94% in January 2010 compared with December 2009 as demand continues to outstrip supply.

This doesn’t appear to be a temporary trend involving just professional investors. Small-scale landlords have recognised that the returns are improving and many are looking to grow their portfolio with a long-term outlook.

At a time when millions of people are suffering pension shortfalls and poor investment returns on savings, rental yields are going from strength to strength.

Part of this boom period for renting is due to the lack of available stock, which isn’t helped by the contraction of new-build and buy-to-let lending.
Our mortgage broker network has noted that there has been an 85% increase in the number of mortgage products available compared to January 2009. But while some lenders are showing an appetite for buy-to-let, we have yet to see any major uplift in available products for this market.

Some lenders have dipped their toes in the water but their lack of confidence is challenging for buy-to-let landlords looking to finance their next purchase.

Failing to support buy-to-let affects not just landlords but the thousands of tenants suffering through lack of supply, which will impact the next generation of would-be home owners and the value of bank portfolios.




Broker banned for false applications

The Financial Services Authority has banned a London-based broker for submitting false applications. Walthamstow mortgage broker Kevin Byrne lacked the integrity and competence to prevent his business being targeted by fraudsters, according to the regulator. An investigation by the FSA revealed that Byrne accepted mortgage referrals from an introducer but failed to undertake due diligence […]


More lenders are offering drop-lock loans but these could catch clients out when they eventually move to a fixed rate. Meanwhile, Abbey is keeping fast-track but with tough requirements for proof of income

Lose small brokers to high fees and consumers suffer

I was shocked to learn that brokers can look forward to paying a minimum fee of 1,000 to be regulated by the FSA. As usual, nobody is standing up for the interests of small firms – the sector that keeps this country going. Because of the actions of big banks and other financial institutions that […]

MODS will raise capital without hitting mutual status

Building societies have come up with a solution to the sector’s capital-raising problems that does not involve sacrificing their mutual status. Societies are developing a instrument called Mutual Ordinary Deferred Shares that allows them to recapitalise but is also loss absor-bing. ODS act like bonds but societies reserve the right not to pay out on […]

Finance is only one hurdle for small developers

The housebuilding market in its current form simply isn’t working. We are completely over-reliant on the biggest players in the industry – the largest nine are responsible for more than 50 per cent of the new homes built in the UK. But there is a reluctance to do more, particularly in this uncertain post-Brexit world. And with […]


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